Chapter 225
"The total floor space of the building in Sinsa Town is about 5,000 pyung . How much rent do they charge per pyung? Let's assume the rate of revenue as 6% of the investment amount . Since the building is located on the main road, it should be about that amount . "
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"Say, the investment amount is 200 billion won . 6% of it is 12 billion won . If I take a loan for 80%, I can use only 40 billion of my own cash won instead of 200 billion won . How much would I be paying for the loan interest then, assuming I borrow 160 billion won? If the interest rate is 3 . 5%, it's 5 . 6 billion won . If I subtract that amount from the potential annual revenue of 12 billion won, I will be left with 6 . 4 billion won . "
"Out of 6 . 4 billion won annual revenue, I need to subtract business expenses, taxes and labor fees and stuff . Given the size of the building, I will need a lot of people to maintain that building, like security guards, mechanics to repair and maintain furnace and electricity . Oh, I will need a cleaning crew as well, about 10 people . How much would be the profit then? 2 billion won? 3 billion won? It's still lucrative . Well, I have to consider the fact that my 40 billion won investment fund would be tied up in that building . It will still bring in profits . "
"Oh, shoot . I forgot to take into account the depreciation cost of the building . If I assume half of the building price, and if the depreciable life is 20 years, hmmm, I will end up losing money . "
Gun-Ho calculated based on several different scenarios around that building, and he figured that buying that building wouldn't bring that much profit to him at the end .
"Well, a person should use their own cash to make more money . If I take a loan from a bank, the bank will make a lot of money, not me . I will easily see this fact if I assume to borrow 50% or 30% of the building price rather than 80% of it . "
Gun-Ho felt a headache and wanted to get some fresh air . He tossed the papers he used for the calculation into a trash can and walked out of his office .
"Let's go to Asan Spavis and take a hot spring bath . "
Gun-Ho drove heading to Asan City .
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It was the first day of work for the new 30 workers in the production field . Most of them were in their 30s and they were all wearing a fresh and newly designed company uniform . They gathered in an auditorium with an ID card hanging around their necks . Most directors and managers were there already, including Manager Jong-Suk Park in the Production Department .
There was a large banner hanging on the wall in the auditorium .
It said, "Welcoming our new employees of 20xx to GH Mobile . "
The assistant manager of the general affairs department led the welcoming ceremony for new employees . After the Pledge of Allegiance, President Gun-Ho Goo's welcome speech ensued .
"Our company has recently moved to our current location from Asan City to Jiksan Town . Our factory in Jiksan Town is a newly constructed factory . We are highly delighted to have you all as our new family . If you devote your time and energy to the company and increase our productivity as a result, you will absolutely be rewarded . "
Gun-Ho tried to make the speech short . After Gun-Ho's welcoming speech, the representative of the new employees, who looked to be in his 30s came forward and took an oath in front of Gun-Ho .
After the oath, the managers and directors were introduced to the new workers . Gun-Ho then offered his hand to each of the 30 new workers for a handshake . He sometimes clapped their backs . There were 6 female workers among 30 .
Once the new workers were placed in their position, the production field seemed to exude different vibe . The young new workers were fast, dynamic and vibrant . The seasoned workers who came from Asan factory seemed to move faster than before to keep pace with the new workers .
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Gun-Ho received a call from his sister .
"The elementary school teacher you met the other day, she seemed to be interested in you . Would you like to meet with her one more time?"
"No, thank you . "
"Why don't you give one more chance to it? She is really a decent lady . "
"I am a decent man as well . "
"Well, yeah you got the point . You are more decent than her . "
"I am in a meeting right now . I'm busy . I will talk to you later . "
"Okay, Gun-Ho . If you happen to change your mind, just let me know any time, okay?"
The factory policy had been intensified after they moved to the new factory in Jiksan Town . It just happened that way . When Gun-Ho had acquired the factory in the first place, the total number of employees was 250, and now there were about 240 people working there, including the new 30 workers . The production output had increased while the number of workers stayed about the same . It made the labor cost lower in the production cost .
"Here is the current status of our labor cost . "
The general affairs manager brought a chart to Gun-Ho to give him a report .
"The labor-to-revenue ratio has reduced to below 25% . "
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"Hmm . "
The chart that the general affairs manager brought to Gun-Ho was about labor-to-revenue ratio and labor productivity . The chart wasn't of course made by the general affairs manager himself, but it was prepared by the staff in the general affairs department .
"It's getting better and better . Let's try to work harder . "
"Yes, sir . "
It was lunchtime, and Gun-Ho went down to the company cafeteria with the internal auditor . There was a long line of workers waiting for their turn to receive their meal, but Gun-Ho and the internal auditor could get their meal right away as the general affairs manager guided them . The meal provided by the company was Korean food with cooked rice and several various dishes .
"You are having lunch here today, sir . "
The plant manager came a bit late and joined Gun-Ho . Other workers who spotted Gun-Ho having lunch there tried to sit at a table as distant as possible .
Gun-Ho calculated the cost of the meal .
'240 workers are having lunch here every day . If adding the night shift workers, there will be more than 300 people eat here on a daily basis . If I assume a meal for one person cost 4,000 won, the daily cost of the meal will be 1 . 2 million won . There will be no rent for the place . So if I give this business to someone outside the company, they will make their living with it . Should I ask my sister and her husband to do this business? Nah . It's not a good idea to bring my own family or relatives into the company . Let's just directly manage the cafeteria for now . '
While Gun-Ho was thinking about the cafeteria business in his factory, someone came to the table where Gun-Ho was having lunch with the internal auditor and plant manager as he gave a cup of water to each person . That dispersed his thoughts .
Gun-Ho was taking a break in his office when he received a phone call from the branch manager of the major bank in Gangnam .
"President Goo, do you play golf?"
"I haven't been in the field for a while . Why are you asking?"
"We just received a ticket from our bank headquarters . They instructed us to meet with the presidents of the major companies that our bank is working with and have a round of golf . I'd like to invite you for it . "
"As you know already, we have recently moved to our new location, and I've been hectic since the first day of moving . I won't have time for golf . Instead, I'd like to meet with you . "
"Something happened?"
"I need to talk with you about a real estate matter . When will you be available?"
"You can come any time . We are always at the office . "
Gun-Ho made a document using Excel in his office by himself .
He made a chart about RiverStar building in Gangnam . It was about its land, the size, and the lien, etc .
He also attached the real estate registration and the cadaster of the building and the land to the excel chart . He also included the pictures of the building's exterior and interior that he took with his smartphone when he had visited the location .
"I should bring all these documents when I go see the bank branch manager tomorrow . I can't just go and talk with my mouth alone . "
Gun-Ho smiled as he stapled the document altogether .