Back to 2008: I Helped My Dad Become the Richest Man

After a lively Spring Festival, life in the Luo family seemed to slow down all of a sudden.

The second phase of pigsty construction is nearing completion, with only some minor tasks remaining. The pork shops in town are doing stable business, with a steady daily income.

Every day, Luo Xinde drives his blue pickup truck to town to deliver meat. The rest of the time, he wanders around the farm or goes to his new house to touch this and look at that. He lives a very comfortable life.

Li Minxia felt that life was incredibly comfortable now. She no longer had to endure the whims of people at the textile factory, nor did she have to haggle over a mere yuan for vegetables.

She is now the financial director of Luo's Farm. She does the accounting every day, manages the family's food and drink, and spends her free time growing vegetables and raising chickens in the fields. She smiles much more often than before.

That evening, after dinner, the family sat around the TV in their new living room. The show "Country Love" was playing, and Zhao Si's comical dance moves made Luo Xinde and Li Minxia laugh heartily.

"Sis, is this really that funny?" Luo Wen whispered in Luo Xiyuan's ear. He really couldn't understand why two adults could laugh so hard in front of the TV.

"They're smiling because of their current life," Luo Xiyuan replied softly. She looked at her parents' contented smiles. Poverty makes it hard to smile; only when life gets better do smiles slowly return.

She felt it was time.

"Dad, Mom." Luo Xiyuan turned off the TV.

The living room fell silent. Luo Xinde and Li Minxia looked at her with some surprise.

"Xiyuan, what's wrong? You're really enjoying watching it," Luo Xinde said.

"I have something I'd like to discuss with you," Luo Xiyuan said with a serious expression.

Upon seeing their daughter's expression, Luo Xinde and Li Minxia immediately sat up straight. They knew that whenever their daughter showed this expression, it meant that something big was about to happen in the family.

"What is it? Tell me." Luo Xinde put down the plate of melon seeds he was holding.

Luo Xiyuan glanced at her parents, then at Grandpa Liu and her younger brother beside her, cleared her throat, and solemnly said, "I want to open another Luo's Safe Meat specialty store in the county town."

After he finished speaking, the living room fell silent.

Luo Xinde's smile froze, and Li Minxia stopped knitting.

"Open a shop in... in the county town?" Li Minxia stammered, thinking she had misheard.

"Yes." Luo Xiyuan nodded.

"Nonsense!" Luo Xinde was the first to react. Without even thinking, he objected, "Isn't this shop in town doing just fine? It makes a good amount of money every month, peaceful and stable. Why bother going to the county town? Do you know how expensive the rent is in the county town? We're unfamiliar with the area; what if we lose money?"

His reaction was intense. This was completely different from the Luo Xinde who used to get excited whenever his daughter said she wanted to do something big.

Luo Xiyuan understood that people are like that. When they have nothing, they dare to risk everything. But once they have some wealth and possessions, they start to fear losing them and become afraid of everything.

"Xinde, don't raise your voice so loudly," Li Minxia quickly advised her daughter. "Xiyuan, your father is right. We're doing just fine as we are now. The pig farm makes money, and the shop makes money too. Together, we make several hundred thousand a year, enough for our family to live comfortably. We don't aspire to make a fortune; we just want to live a peaceful life. Going to the county town is too risky, Mom... Mom isn't at ease with that."

She's truly terrified now. She's had enough of living in poverty, and she's worked so hard to achieve the good life she has today; she doesn't want to risk losing it all again.

"Dad, Mom, don't rush to object. Let me finish." Luo Xiyuan wasn't angry at their objections. She patiently explained, "You think we're earning enough now and can live a stable life. But have you ever thought about why we're able to earn so much money?"

She stood up, walked to the small blackboard in the living room—which she had specially installed for meetings at any time—picked up the chalk, and wrote two words on it: Information Gap.

"We started selling candles because we knew about the impending power outage before others. We later sold vegetables because we foresaw the roads would be open and the countryside was short of supplies. We were able to sign a contract with Jinhai Bay because we understood the needs of pig farmers better than other pig farmers. All the money we earned came from knowing more and thinking further ahead than others."

"However, this information gap will gradually disappear." She drew a downward arrow. "Now, other butcher stalls in town are following our example, keeping their shops a bit cleaner, and starting to use our sales pitches. Although their meat isn't as good as ours, over time, our advantage will diminish. If we only stick to this one shop in town, sooner or later, we'll be overtaken, or even surpassed."

Her words silenced Luo Xinde and Li Minxia. Although they didn't understand the concept of information asymmetry, they understood that relying solely on one shop would eventually reduce their current income.

"Then... then going to the county town will solve this problem?" Luo Xinde asked with some doubt.

"Yes." Luo Xiyuan wrote two more words on the blackboard: Brand.

"Dad, think about it, why can some products sell for a high price while others can only sell for a low price? It's because of the brand. What we need to do now is to make the five words 'Luo's Safe Meat' a well-known brand. So that when everyone thinks about buying good pork, they will think of our family."

"If we only operate in the town, we'll be at best the best pork shop in town. But if we can establish ourselves in the county seat, then we'll be the best pork brand in the whole county! Then, our meat will fetch a higher price than others, and our business will be able to last longer and be more stable!"

"This is called economies of scale and brand premium," she said, using a term she had read in a book.

Luo Xinde and Li Minxia were completely confused, but they felt that what their daughter was saying, although they couldn't understand it, seemed very impressive.

"But... the risk is still too great." Li Minxia was still worried about the money.

"Mom, I've done the math." Luo Xiyuan pulled her mother down to sit and began to explain the details. "We currently have 130,000 yuan in working capital. I've estimated that opening a shop in the county town will cost around 100,000 yuan for rent, renovations, and equipment. We won't need to use the pig farm's money anymore, and it won't affect our household expenses. We're using our existing profits to gamble on a bigger future. Even if... even if we fail, we'll only lose this 100,000 yuan. We still have the pig farm and this shop in town; our family won't go bankrupt. We can completely bear this risk."

She laid out the worst possible outcomes, which actually made Li Minxia feel a little more at ease.

"Besides, we didn't go unprepared." Luo Xiyuan then looked at her father. "Dad, what do you think is our most important advantage right now?"

"Pork is good, right?" Luo Xinde said without thinking.

"Yes, but not entirely." Luo Xiyuan shook her head. "One of our most important advantages is the Golden Bay Hotel! Just imagine, when we hang a sign outside our store in the county town saying 'Golden Bay Hotel Specially Supplied Pork,' what kind of effect will that have? Everyone in the county knows Golden Bay! When they see that even a five-star hotel uses our meat, how could our meat be bad? Will they still think ours is expensive? That's more effective than us saying a hundred times that our meat is good!"

"That's right!" Luo Xinde slapped his thigh, his eyes lighting up instantly. How could he not have thought of that! This is practically a free win!

"There's also the issue of manpower," Luo Xiyuan added. "The shop in town is now completely on track. Zhang Lan and Li Yan can handle it perfectly well. Especially Li Yan, she's very smart, learns quickly, and is very ambitious. My idea is to train her for another six months, and once the shop in the county town opens, I'll let her be the manager of that shop. We need to start building our own management team; we can't expect our family to do everything on our own."

When Li Yan was mentioned, Luo Xinde and Li Minxia nodded in agreement. That young girl was indeed quite good; she was diligent and quick-witted.

Luo Xiyuan explained every step of the plan to her family, including how to deal with risks, how to train manpower, and how to build a reputation.

Luo Xinde and Li Minxia exchanged a glance, a weight lifted from their hearts, both knowing that the matter could be resolved.

"I...I have no objection." Li Minxia was the first to relent. "Xiyuan is more thoughtful than us. I'll listen to her."

Luo Xinde took a drag of his cigarette, stubbed it out in the ashtray, looked up at his daughter, his eyes filled with pride, relief, and a hint of inexplicable loss.

"Alright!" He nodded emphatically. "Let's do it! Tomorrow, I'll go to the county town with you! I want to see what it's like there!"