Losing Money to Be a Tycoon c1-883

by Inebriation-seeking Blue Shirt, 青衫取醉

  “Bo Sha Gym’s Handong University branch was intended to be a high-end gym in the vicinity of Handong University. Its target audience was Handong University’s students and the white-collar workers in nearby office buildings. However, a problem soon surfaced.

  “There are too many gyms near Handong University. Many small gyms engaged in price wars and sold their memberships at very low prices. Nearly all the people who love exercise in the area have been divided up among them.

  “There’s even another Bo Sha Gym just over a kilometer from this place. That exacerbated the problem. The branch manager of this branch had already set his sights on the high-income group, and so the membership was quite expensive.

  “It was fine in the beginning. The gym’s environment attracted many high-income people. However, as they sold more and more cards, potential customers dwindled, and the revenue from membership sign-ups and personal training failed to cover the gym’s operating costs. At last, the gym failed to make ends meet and started incurring losses.

  “If you like this place, we have two options:

  “First, we could buy the entire place as it is, including the gym’s members and coaches. Of course, the branch manager would love it if we could do that, but we could use that as an excuse to negotiate a better price. We could even spend less than we budgeted. “The downside to doing that is that we would earn little to no revenue from membership sign-ups. That would only allow us to ask for a better price from the owners. Of course, we

  the existing members and personal training sessions.

  “Second, we could buy the shop space, and not retain the members or the coaches. We could even refuse to buy the equipment and ask the owners to empty the place. Then, we can renovate the gym from scratch. Since there’s another Bo Sha Gym nearby, we could ask the owners to transfer the members from this branch to that branch.

  “That would ease our burdens, but there are only so many people in the area who have the habit of going to the gym. It could cause us to fail to pull in members from the very start.”

  Fail to pull in members?

  That’s great!

  Pei Qian remained expressionless. “Alright, I understand. I’ll deal with the project from now on. You can focus on the procedural work.”

  Assistant Xin nodded. “Alright, Boss Pei.”

  Both of them walked towards Bo Sha Gym’s Handong University branch. The moment they entered, what looked like a thirty-year-old man dressed in a suit and leather shoes walked up and welcomed them.

  “Boss Pei! How are you? I’m the branch manager of this gym. My surname is Wei.”

  Obviously, Assistant Xin had told the branch manager about Pei Qian before. That was probably why he was being so hospitable. There were many heroic buyers in the world, but they could be split into different tiers!

  The extremely rich buyers would no longer be referred to as ‘heroic buyers’, but as ‘cash cows’!

  Once Branch Manager Wei heard that Tengda Corporation had set its sights on this branch, he beamed with excitement. This branch had been steadily incurring losses. Branch Manager Wei had already decided to transfer all the members to the branch next door, close down, and stop the bleeding.

  Now, Tengda Corporation had expressed interest in taking over the shop. Although Branch Manager Wei would still incur losses in the end, the problem would be minimized. Of course, he was over the moon.

  “Boss Pei, let me bring you around first.”

  Branch Manager Wei led Pei Qian around the gym, letting him see every corner of the area. The area was huge, and the renovations were well done. Among the gyms in Jingzhou, one could say that this gym had a better environment. However, there was no swimming pool, sauna, massages, or other fancy things.

  Pei Qian knew very well that, among all the high-end gyms, Bo Sha Gym would only be considered average.

  The more facilities there were in a traditional gym, the better. Gyms with fancy facilities like swimming pools and saunas often drew customers in better than other gyms.

  The reason was simple. Many noobs had the same mentality when it came to gyms: ‘it’s better to have excess than find myself lacking’. Even if they did not know how to swim, they would plan for the day that they felt like learning.

  Thus, if a gym had all the necessary facilities, even if it charged more for membership; people would still be willing to sign up.

  While this gym might look bad to others, it looked good to Pei Qian. The gym would look less attractive to others! Obviously, Branch Manager Wei did not tell Pei Qian about this. Instead, he boasted about superficial things like how much they had invested in the gym and how good its potential was.

  Pei Qian did not pay much attention to him. Instead, he barely processed Branch Manager Wei’s words. In any case, he could just send Assistant Xin to do the negotiating when the time came for it.

  After walking around the gym, Branch Manager Wei called all the gym trainers over. They formed two lines in front of Pei Qian. The gym trainers all had well-sculpted chests, and they looked to be full of energy.

  It was not easy to be a gym trainer in this day and age.

  If the gym closed down, all the gym trainers would have to apply for jobs in other gyms. Not all of them would succeed. Of course, they had to put on a show in front of someone who was potentially taking over the branch. It would be best if they could convince Boss Pei to retain them as he bought over the gym.

  Branch Manager Wei’s intentions were clear. He was not hoping for Boss Pei to retain all the gym trainers. In fact, he would be satisfied if Boss Pei picked a few of the trainers and allowed them to remain in the gym.

  “Boss Pei, let me introduce to you a few of our gym’s most popular golden instructors—”.

  Pei Qian raised his hand, stopping Branch Manager Wei mid-sentence. Boss Pei trusted his own eyes more than Branch Manager Wei’s recommendations. He scanned the gym trainers at lightning speed and then filtered them one by one.

  He could not accept those with bad figures.

  Those people probably could only remain in the gym for so long because they could make a lot of sales. They were likely good and quick-thinking liars. If Pei Qian retained such business geniuses, he would possibly end up generating a lot of profit.

  He could not accept those whose eyes were filled with hope and who looked to be in a good mental state either.

  Such people were probably hard workers who were very enthusiastic in their work and who had probably been brain-washed by several other gyms before. They did not match Pei Qian’s requirements.

  Finally, Pei Qian skipped over the few gym trainers in the front row who had bulging muscles. He focused on the humble-looking coach at the back, who stood by the side with his head lowered.

  He was not tall, and he had glasses on. From his face, Pei Qian guessed that he was quite old. Since he hid behind the others, Pei Qian could not tell how fit he was.

  “You, the man with the spectacles. Step out.”

  Pei Qian wagged his finger.

  The gym trainers turned around one by one to look at the man with spectacles. He looked up, incredulous and confused, as he pointed to himself.

  Pei Qian nodded. “That’s right-it’s you. Step out.”

  The man walked through the middle of the front row and stepped in front of Pei Qian, still looking puzzled.

  Pei Qian looked at the small-looking man and instinctively thought of a scene in the movie ‘Kung Fu’. The man had looked so short before, and he had looked so unassuming behind the other gym trainers. Pei Qian could not tell that his muscles were so developed.

  “What’s your name?” Pei Qian asked.

  The personal trainer spoke in a low muffled voice. “Guo Licheng.”

  Pei Qian was stunned. “I’m asking for your real name, not your nickname.” Branch Manager Wei quickly explained, “Boss Pei, this trainer is called Guo Licheng. His surname is Guo, and ‘Licheng’ is his name. Licheng means rhetorical and honest.”

  Pei
Qian, “…I’m sorry, I’m uncultured. However, your name doesn’t sound very motivating to those who want to lose weight.”

  Branch Manager Wei walked towards Boss Pei and said, “Hehe, Boss Pei, I need to tell you something first. I’m not saying this trainer isn’t good, but he’s not very smart. He’s not very good at management, and he’s not very sociable either. In fact, he’s the worst at sales in the entire team.

  “Of course, if you only want him to be a personal trainer, there’ll be no issue. He’s very professional. However, if you want him to manage the gym, there’ll probably be issues…

  “What’s more, Coach Guo has been thinking about quitting the industry for some time.

  “I can recommend another man to you. He’s not worse off than Coach Guo, and he’s smart and bright. I promise that you’ll be satisfied!”

  Pei Qian shook his head. “There’s no need! I don’t want anyone but him.” “Er… alright.” Branch Manager Wei had intended to try harder at persuading Pei Qian, but he soon recalled that he was not related to the gym trainers in any way. Thus, he decided not to poke his nose into their business.

  Branch Manager Wei dismissed all the other trainers and asked Guo Licheng to remain behind and wait for Boss Pei’s instructions.

  Pei Qian left Assistant Xin with a few words. “Get rid of all the equipment in the gym. Sell them second-hand to other gyms. We’ll buy new ones.

  “Ask them to transfer their members to the other branch as well. We’ll not take them. We’ll only retain Coach Guo. I want to speak to him.

  “Pick out some problems and negotiate for a better price. Of course, don’t go overboard; just don’t let the branch manager take us for a ride.”

  Assistant Xin nodded and then proceeded to discuss the contract with Branch Manager Wei. At the same time, Pei Qian went to speak to Guo Licheng. Before he could say anything, Guo Licheng spoke. “Boss Pei! I’m very sorry, but I have something to clarify. I thought of leaving the industry for a long time. I apologize, but you’ll have to find another coach.”

  Pei Qian remained silent for a moment and then asked, “Are you sure you don’t want to hear how much I’m going to pay you first?”

  Chapter 477 - Let Me Change This Industry Then!

  The mysterious question stumped Guo Licheng at that moment. Pei Qian continued speaking. “What’s your base salary now?”

  Guo Licheng answered honestly, “1,500 yuan.” Pei Qian asked, “How do you earn commission?”

  Guo Licheng: “It varies from trainer to trainer. On average, we get thirty percent as commission and two hundred yuan per personal training session.”

  The personal training sessions cost as much as Pei Qian remembered. That was the price he was paying for his employees’ personal training as well. Of course, in ten years, this would look cheap. In fact, it looked like peanuts.

  Pei Qian quickly calculated in his head. “If you teach three sessions per day on average and don’t rest for the entire month, you would earn 5,400 yuan from commission. In addition to your basic salary, that would be 6,900 yuan.”

  At the moment, that income was not considered bad in Jingzhou.

  Guo Licheng hesitated. “In reality, I don’t earn that much. Many customers that I teach were transferred to me by other trainers. That means I have to split my commission with them. Each month, I only earn about five to six thousand yuan.”

  Pei Qian nodded. The man lived up to his name. He was very forthcoming and honest with all of his answers.

  For personal trainers, the main competition was in selling training sessions. The more one sold, the more commission one earned. Many personal trainers in large cities could earn thirty to forty thousand yuan per month from selling training sessions alone. However, those kinds of marketing geniuses were rare.

  Naturally, personal trainers like Guo Lichengwho were inarticulate, quiet, honest, and forthcoming-would not be able to bluff many students into buying his training sessions. On the other hand, personal trainers who were good at sales and bluffing sold more personal training sessions than they could handle. Thus, they could transfer some customers to trainers with more time on their hands, like Guo Licheng.

  However, they would not have transferred customers over for free, unless they were extremely close.

  Pei Qian nodded. “I’ll give you a basic salary of eight thousand yuan. There’ll be no commission, but we’ll provide food and lodging allowance and various other benefits like regular physical examinations.”

  Guo Licheng was shocked. “Er, Boss Pei… it’s not the basic salary that’s the problem. I want to leave the industry because—”.

  “I’ll make it ten thousand yuan and give you more benefits, but there still won’t be commission.”

  Guo Licheng, “…”

  He was moved. A basic salary of ten thousand yuan… even if he left the fitness industry, he would not be able to draw a salary like that.

  What’s more, Guo Licheng really liked the fitness industry. He had only wanted to leave because he felt disappointed in its current situation. A basic salary of ten thousand yuan was ridiculously high, but the words ‘no commission’ were even more shocking.

  Boss Pei’s sincerity had moved him.

  However, it also caused Guo Licheng to worry about Boss Pei. He did not want such a genuine man to become a pushover in the industry and end up losing everything after taking over the gym.

  Guo Licheng hesitated and then asked, “Boss Pei, you don’t understand the fitness industry very well, do you?” Pei Qian answered frankly, “No.”

  Guo Licheng looked like he had expected the answer. “To tell you the truth, you have an overly simplistic view. Your proposal sounds very tempting to me, and having ‘no commission’ is a good thing. However, it would not be in the gym’s interests!

  “Trainers would only try to sell memberships and training sessions if they would be paid a commission. That’s how the gym would generate revenue and profit. If you don’t pay your trainers commission, they would not make sales enthusiastically. Who would pay the gym, then?”

  Pei Qian laughed. “Nobody has to. Our gym can just do away with personal training.”

  Guo Licheng, “Huh?” Pei Qian found Guo Licheng’s confused expression very interesting. He briefly explained various aspects of his plan for Deposit Fitness to the latter.

  Guo Licheng’s expression changed from confusion to shock, to doubt, to bewilderment, and then to pity. Once Pei Qian was done speaking, Guo Licheng sighed softly. “Boss Pei, I can now confirm that you don’t understand the fitness industry at all! Honestly, gyms with a conscience would not last long in this industry.

  “If you want to run your gym this way, you would not achieve either of your goals. You would neither have a good reputation nor be able to generate profits.”

  Oh?

  Pei Qian was elated. It seemed like his own plan had been validated by an experienced insider of the industry! It was a good sign.

  Still, he had to bury his joy deep in his heart as he asked, “What do you mean?”

  Guo Licheng cleared his throat and then glanced at Assistant Xin and Branch Manager Wei who were negotiating the contract at that moment. He whispered, “I’ll tell you the truth, Boss Pei. The fitness industry is now a gambling den. “The trainees are betting that they would go to the gym every day upon signing a membership, while the gym is betting that they would not.

  “Often, the gym wins.

  “Still, local gyms are closing down and winding up in batches. Some people don’t visit the gym for several months, even after signing up for a membership. When they finally decide to go, they realize that the gym has closed down. That’s very common.

  “That’s why I say that this is an industry where bad money drives out the good. It’s… very similar to other industries that eagerly push people to sign up for things and then run away.

  “You can only earn profits if you have a dark heart. Those who survive based on their good hearts or good foresight a
re few and far between.”

  Guo Licheng sounded very upset, but Pei Qian was over the moon.

  If what you’re saying is true, then the situation is much better than I thought!

  Pei Qian inwardly celebrated what he was hearing

  “Tell me more about it in detail,” said Pei Qian, his expression unchanging.

  It looked like Guo Licheng had a strong desire to diss the industry more as well. In a low voice, he said, “Boss Pei, honestly, pricing usage of the gym at fifty yuan per day would not please either side.

  “Most customers only visit the gym four times a week. That means they would have to spend ten thousand yuan a year. That’s five times more expensive than ordinary gym memberships! They would surely think that our gym is extraordinarily expensive.

  “However, in reality, gyms price their membership at two thousand yuan and then depend on people wasting their membership and buying private training sessions to generate profits.

  “In other words, setting a fixed price might make customers find this gym expensive, and you might not be able to generate profit. To me, you’re just being good-hearted, especially to the noobs who don’t have any motivation. Yet, those noobs might not even thank you.

  “They would imagine visiting the gym every day with a membership card. Thus, they would not find your pricing worth their money.

  “That’s also why I said that bad money drives out the good in this industry. There are too many noobs, and it won’t be easy to earn money good-heartedly. Instead, being despicable would be more profitable.

  “Gym memberships are sold at two thousand yuan for a year and three thousand yuan for two years. Obviously, the memberships that last two years are more cost-efficient. Since the gyms bet that customers would not visit very frequently, the longer one’s membership extends for, the cheaper it would be priced.

  “Still, gyms only focus on the situation before them! They would think about future problems in the future, as long as they get their hands on the three thousand yuan first. Only one gym had to start doing this before the others had to follow suit. Otherwise, the first gym would have won all the customers over.