The Industrial Giant Reborn

"Eric, are you going to reinvest in Home Depot?" Bernie asked.

"No, I already own 33% of the shares, which is enough. I'm talking about another cooperation model. Since Home Depot mainly adopts the franchise model, it's better to just let me join directly." Chen Zhiwen said with a smile. .

When investing in a company's shares, more is not always better. For example, after the emergence of the Internet in later generations, a large number of venture capital funds were also born. These venture investors held a large amount of capital, but generally did not ask for too many shares. Common angel rounds, Generally, it is 15-20%. Later, the amount will be gradually increased according to the situation, but generally it will not exceed 1/3 of the shares. Only some special cases will lead to higher investor equity. For example, Yahoo acquired 40% of Alibaba's shares and became a super-large shareholder. However, this later led to increasingly intensified conflicts between Alibaba's management and Yahoo's investors. In the end, Boss Ma played a trick and took back a large amount of equity. Of course, Yahoo's investment is still very profitable, but this is also a special case.

The logic here is very simple. If the investor owns too many shares, even up to half, then wouldn’t the entrepreneur become a part-time worker? This seems to be of high interest, but there is a high probability that the founder and team will leave, or even if they are still there, it is hard to say whether they will continue to work hard.

Investment also pursues a win-win situation, at least to ensure that the founders and related teams are well fed, otherwise, it is very likely that everyone will end up with nothing.

"You mean, you come to join and invest in the new store, and then Home Depot will manage it?" Bernie is also a smart person, and he understood it as soon as he heard it.

"Yes, Home Depot's current problem is that it lacks capital to expand. Even if it is a franchise, it still needs to find a suitable partner, plus investment in trust costs. These require a lot of money, but if you cooperate with me, you don't need to think so much. Yes, I'll pay for it, and you can choose the location and take care of the management behind it. It's convenient for everyone." Chen Zhiwen said with a smile.

In later generations, many netizens joke that doing business and franchising means giving money to others. You want to make customers' money, and the franchise company wants to make your money.

This sentence makes sense and is equally applicable in this era, but it also creates a problem. Most people are very cautious about this kind of franchise, which will also make it extremely difficult for franchise companies to find people to join.

There is no Internet in this era, and there is no ability to accurately deliver advertisements. It is also very expensive to advertise on a large scale in newspapers or even on TV. Only those very famous brands are more likely to succeed, such as McDonald's. You probably wouldn't have to think twice before joining, but its great reputation is also a unique advantage formed by years of investment.

For new brands, it is very difficult to attract people to join, especially Home Depot. It is not an ordinary store. The investment in any Home Depot store is at least several million US dollars, and a good location costs tens of millions. , the risk is too high for those who join. This also led to the fact that in the early stages of development, Home Depot's expansion rate was very slow even if it used the franchise model.

Instead, it will be easier to wait until later when you have grown up and many people have made money by joining the franchise and become famous. But you have to wait until then.

"If this is the case, it will indeed be a very good idea." Bernie nodded and asked: "Then Eric, are you sure to leave the management of the franchise stores to me, Home Depot?"

"Yes, except for financial monitoring, in principle we will not interfere in other aspects, as long as it does not affect our interests." Chen Zhiwen said. He didn't bother to get involved in professional matters, he just let the professionals make money for him.

"How many franchise stores do you need to open, Eric?" Bernie asked again.

When joining a franchise, the first difficulty is to find a suitable partner, and the second is follow-up management. Generally speaking, unless it is a big brand, such as an international-level hotel, you can manage it entirely by yourself, but the prerequisite is generally that you have enough Franchisees believe in this big brand, but small brands are definitely not acceptable. For a large investment, franchisees must have management rights or part of it, otherwise everyone will worry about whether your company will cheat them through various means. money.

This is also the reason why it is difficult for many brands to expand quickly even through franchising. The franchising model only saves money, but may consume more energy, such as financial disputes with franchisees, or some franchisees themselves break the rules. It deceives customers and affects your own brand, etc.

Therefore, a suitable dealer is very important to brand companies. Even McDonald's will choose those who have cooperated with it for a long time to expand and join.

In the early days of Home Depot's establishment, Chen Zhiwen invested in the company, providing sufficient funds, resources and a large number of talent help from Costco. It can be said that without Chen Zhiwen's investment, today's Home Depot would not be developing so smoothly.

And over the years, although Chen Zhiwen has followed Home Depot's multiple financings, he has never interfered in anything with Home Depot. Of course, it may also be because Chen Zhiwen himself has a large number of high-quality assets.

Cooperating with such people will indeed save worry and effort for Home Depot, and it can also save a lot of publicity costs. Even after there are more stores, it will be much more convenient to find other potential cooperative franchisees. After all, there are There are many successful examples.

"In terms of quantity, I will take whatever you can give me." Chen Zhiwen said with a smile: "But let's start with the big cities first. Although Home Depot has developed rapidly in recent years, its main force is still in the western United States, and there are so many in the eastern United States. It would be a waste not to invest in the city, and your company is not the only one in the home furnishing industry."

The future of Home Depot is to be the largest home furnishing retail company in the United States and even the world. However, there are many competitors at the same level. The combined scale of these competitors is still far greater than that of Home Depot. In other words, looking at this market alone, Home Depot is far from reaching the real level. upper limit.

In fact, it is normal. Even the invincible Wal-Mart cannot monopolize the retail industry. In the 1980s, Home Depot could not achieve rapid expansion even with the funds raised after going public. Moreover, before Home Depot, , furniture retail supermarkets already exist. Bernie's special creativity can reduce costs to the greatest extent, which is the reason why Home Depot can rise in a mature market. But in fact, merchants can also learn from this model. This is different from Wal-Mart or Costco. It is completely different. Even if others can learn from the latter two, they cannot reach the level of the pioneers.

Therefore, Chen Zhiwen needs to push again, but the shares have reached the upper limit, and he can only start from other places. In the past few years, Hisense Bank in Hong Kong has also issued loans to Home Depot many times, but even if he has funds, it does not mean that he can have unlimited funds. Expansion, so Chen Zhiwen decided to end it personally. He made a lot of money in the United States. Many of these funds were inconvenient to leave immediately, so he needed to continue investing in the United States, and investing in Home Depot's retail supermarkets was very good.

First, Chen Zhiwen knows the future of Home Depot. In terms of each store alone, it is definitely a very cost-effective investment. Second, Home Depot is now stuck in the initial expansion difficulties. Investing his own money to become a franchisee can also promote Home Depot's growth. Development, if Home Depot develops well in the end, then as the largest shareholder, he will make greater profits. Thirdly, the US real estate market will also develop well in the future. Although it is not as good as Hong Kong, in the long run, the returns will be considerable. Fourth, Chen Zhiwen’s current investment does not have to have sufficient income. If it can drive a large number of jobs, it is also possible. In the United States, pure manufacturing is already difficult, but the service industry does not matter. , the labor cost is high, and then it can be transferred to the consumer terminal.

"Eric, you suddenly made me don't know how to answer." Bernie was stunned for a moment and replied. It is estimated that countless entrepreneurs have never thought that they would encounter this kind of question.

"There's no rush. Even if we want to build a new Home Depot supermarket, it won't be possible to build it on a large scale in a short time, and your manpower won't be able to keep up." Chen Zhiwen said with a smile.

Doing retail is easy, but doing it well is very difficult. The most important thing is the talent team. Walton can become the largest in the future. Walton has at least half of the credit. Costco can develop because of Pierce. And the efforts of his entire team. Otherwise, even if Chen Zhiwen is worth 10 times more, he will not be able to build such a large supermarket. At most, he can play with Watsons in Asia and take advantage of the opportunities in the mainland to grow first, but it will be difficult to develop into a global super store. Large scale.

Home Depot has only been established for five years. Although it has help from Costco, the talent pool cannot keep up with Chen Zhiwen's capital investment. Just like Costco in the past, the only factor limiting expansion is the number of teams.

"Yes, but if we build new stores on a large scale in the eastern United States, we will need to re-build a logistics system there, and the capital investment in this area is also very high." Bernie said: "Before, we concentrated in the western United States, and the logistics cost consideration is the important reason.”

Everyone knows that priority should be given to the development of large cities, but large cities in the United States are scattered and far away from each other. If a store is built in each big city, there will be no way to rotate logistics. Therefore, even if Home Depot develops it first Some small cities in the west cannot develop in the east or central part. They even need to gradually develop from dots to circles. The same is true for various other retail supermarkets.

"Well, this area does require a lot of capital. Have you ever considered going public?" Chen Zhiwen asked.

"Not yet. There has been no shortage of funds before, so I want to wait until the development is better and the scale is larger, so that I can raise more funds by going public." Bernie replied.

"Well, in this way, Hisense, I can arrange to give you another loan to develop the logistics system in the eastern United States. I will also cooperate with you to build properties in cities as close as possible to each logistics center. This has the highest economic benefit and the lowest risk." Chen Zhiwen thought for a while and said: "If we make a large investment quickly in the short term, and then make it large-scale, we can prepare to go public, preferably within 3 years."

"Within 3 years? Okay." Bernie nodded and said, 3 years is enough for a company preparing to go public, and he himself does not object to the company going public. This is the inevitable route for all start-up companies, no After going public, how can those early investors cash out? Even so many companies around the world have gone public. In addition to the convenience of financing by going public, the needs of investors from all sides are also the most important reason.

"With the current trend of the U.S. stock market and the development speed of Home Depot, I think, Bernie, you will become a billionaire soon." Chen Zhiwen said with a smile.

Today, Home Depot has 36 furniture retail supermarkets of various sizes in the western United States, centered on Los Angeles and San Francisco. In the early days, Chen Zhiwen also reminded us to pay attention to personnel training. Today, the preparations in this area cannot be said to be perfect. But at least it can support rapid expansion in a short period of time. Besides, you can also poach people from other similar companies. With your own capital and loans from Hisense, there should be no problem in replicating 36 more companies in the western United States within three years. After all, every Home Depot store is far inferior to Costco or even Wal-Mart in terms of scale and operational difficulty. With sufficient funds, the expansion speed is relatively fast.

With more than 70 retail stores, it is already profitable. If investment banks tout it, and the stock market peaked in 1987, it should not be difficult to obtain a market value of nearly US$1 billion after going public. As the founder, Bernie has gone through two rounds of financing. , but there are still 30% of the shares, so it is not difficult to become a billionaire.

"Haha, becoming a rich man means nothing to me. Even if Home Depot pays me an annual salary of hundreds of thousands of dollars, I basically can't use it all." Bernie said with a shrug.

"Billionaires have the lifestyle of billionaires, you will know it later." Chen Zhiwen said with a smile.

People who succeed in starting a business often need a period of time to adapt to the changes in their net worth, and most of them are as busy as dogs in the early days. For example, Dong Ge from JD.com, who was later said to have spent almost half of his nights in the company for several consecutive years, Even though JD.com was valued at over 100 million at that time, there was no time to enjoy it. It was not until JD.com was almost developed that his boss began to relax.

"Not necessarily. My goal is to turn Home Depot into the largest home furnishing supermarket in the United States. As for me personally, as long as I don't lack money." Bernie said.

"Yes, they are just numbers to us anyway." Chen Zhiwen nodded and said, some people may really live a mediocre life even if they have money. Maybe Bernie is such a person. In the original history, Chen Zhiwen didn't know what kind of character this person was.

After staying in the United States for nearly a month, in addition to visiting the Olympic Games, Chen Zhiwen also focused on Disney and Costco. A few other things, such as acquiring KFC and visiting Home Depot, were just minor things.

With the official business almost completed, Chen Zhiwen took a group of people to Wagoner, the largest farm in the United States. This farm, which covers an area of ​​more than 2,000 square kilometers, has changed a bit from before.

"There are so many cows." On the helicopter in the sky, Liu Xiaoli was wearing a telescope and kept looking into the distance. The same was true for Chen Zhiwen on the side, who was carrying a telescope.

The entire Wagner Farm is too big, and there are no official roads. If you drive, you can't see much in a day, but a helicopter is much more convenient. Flying to a high place, you can see ten miles away at a glance.

"This is already the largest free-range cattle base in the United States." Chen Zhiwen said with a smile. After buying such a large farm and with complete infrastructure, Chen Zhiwen invested a little money and hired professional people to raise free-range cattle here. Lots of beef cattle.

Naturally, a small part of the beef produced is mainly supplied to nearby Costco, Wal-Mart and even Celtic supermarkets. Most of it is transported to various parts of the United States through Costco's refrigerated transport trucks. When sales and logistics are opened up, , the income of Wagner Farm has also become much more impressive than before.

After the helicopter circled around the farm, everyone got down. The current owner of the farm, Varner, arranged for several people to hunt for the boss and others, killing several small animals and fishing some from the nearby reservoir. Fish, everyone is having the most primitive barbecue on the grassland.

After a while, the aroma of several kinds of barbecue wafted out, and Chen Zhiwen, who had been tired all morning, also had a great appetite.

However, Liu Xiaoli, who was on the side, didn't look very good and seemed to be a little nauseous. (End of chapter)