Warnings in April 2012

We went to a restaurant the other day, and were awestruck over the low prices. I mean they had dishes on the menu for as little as 5RMB, and this place wasn’t some hole-in-the-wall joint. It was huge. It got us to thinking about how much money the dude who owns this place could make. Let’s say the average price on the menu was 20RMB, and after all is said and done, the owner makes, as little as, 1RMB per plate. The place easily seats one hundred and fifty people, and they have to turn their tables once for each meal. Okay here’s the easy part; everybody eats, on average, a dish and a half a piece. That’s 450 dishes in one meal, or 450RMB per meal put in the pocket of the owner. Times that by two meals per day, and we’ve got 900RMB profit, at least, per day. Now times that by the number of restaurants listed on the name card—seven. That’s right folks, if the guy makes 1RMB per plate he serves, he’s making 6,300RMB per day. I no longer wonder where the money for the BMWs comes from.

A recent report put out by the Bloomberg group said that Foxconn, the illustrious group that makes the iPhone, is in need of 20,000 employees. They currently employ just under 100,000 employees. Last year, according to Reuters, they had over 200 million dollars in losses. I’m stupid or naïve or both. [It's both. - Ed.] I mean if each employee only makes the company .07RMB per day, well then the “owners” at Foxconn should be richer than our previously discussed restaurant boss. I kept looking at the numbers to see if I was correct. That’s about 1 fen an hour per employee. Somebody in the accounting department should be shot.

Then again, as I went down to the end of the bar to do the calculations, somebody much wiser than I am reminded me how easy it is to lose money. “You get an employee demand for a 1 percent raise in income, and whoof, your profit is gone. The bigger you are, the easier it is to lose money.” The most employees I’ve ever managed was 38, if my memory serves me correctly, and I wasn’t that stupid, but I wasn’t that smart either because if I was smarter, I would be retired already.

And what would I do if I were retired? I would go to a French café every morning, and start the day with a double espresso, before wandering to a bar to have an afternoon drink to lubricate myself into a mood to write down my thoughts that, hopefully, somebody will read. Ideally, it would be under the sun in warm weather. Then later in the day, somebody would tell me how short-sighted I am, and I would wake up to another day. Another day like tomorrow. Welcome Spring!

By Tim Hoerle