The Annals of the Flame kingdom (LN) Chapter 2 Part7

「Then… … What plans do you have? 」

The dinner paused for a break. As Kouta was chugging down a cup of red tea while Emily was staring daggers at him, Erica asked a question.

「That question is somewhat hard to answer… … However, we can start our discussion from 『the collapse of your business model』. 」

Kouta placed his cup on the table, and looked at Erica.

「When, a business… … This also applies to running a country or a territory, by the way. When a business faces a brick wall, there are usually 2 reasons for this. 」

「2? Just 2? 」

「This is a rough categorisation. The reasons are categorized into external factors and internal factors. 」

「… … Hmm… … That's true. 」

「Right now, the problems Terra is facing are caused by internal factors. Despite it being difficult for crops to grow well here, agriculture was chosen to be the main source of income… … That's what they call a 『sunset industry』. 」

「… … Hmm. That is quite true. The crops here can't grow well due to the sea wind. Ever since Terra was founded, it has always been facing this problem.」

「… … I have a question. If this offends you, I apologise in advance.」

「Go ahead.」

「I'm curious. How did Miss Erica become the lord of Terra? You're the elder sister of the Queen, isn't there… … How should I put this… … Isn't there a 『better place』 than here?」

「It's because Rond de Terra is the territory handed down specifically to the outstanding children of the royal family. Having a n.o.ble t.i.tle is not directly related to ruling a territory… … In short, it is just some kind of honorary t.i.tle. As for me, due to being promised 『n.o.bility and land』, I was given this territory together with my t.i.tle.」

「Even so, you're still the elder sister of the Queen. Without even having to lift a finger, you could… …'

「It's the opposite. The very reason why this land is given to royals is because of the fact that 『no one wants this land』.」

「… … Pardon?」

「The king awards territories to ministers for their contributions. If a king were to award you this territory which has never experienced a good harvest, how would you feel?」

「… … I would think that it was just an elaborate prank.」

「There wasn't any land available to give to me who normally would be married off in a political marriage. Since that's the case, might as well give the 『problematic』 Terra to me. That's about it. I think it was Lotte's idea.」

「That Mr. Lotte? He didn't seem like someone who would do something like that.」

In Kouta's mind, Lotte's face looked more like that of a kind grandfather. It seems that he has a kind appearance, but is actually a sly fox.

「… … Although, not being able to see through 『it『 is one of the reasons for being called a 『fox』.」

「What are you saying?」

「Nothing. Thank you, for clearing that up for me. Let's get back on track. First off, I believe that you understand that crops are unable to grow well in Terra.」

「Yes. Even though we tried to cultivate crops that can grow in salty soil… … But, it seems impossible.」

「They didn't grow well?」

「They did grow… … But the profits are little.」

「… … I see.」

Kouta had little knowledge about agriculture, but he understood this problem… … In other words, he was experienced in this matter.

「… … This is a textbook example of a failure.」

「… … What do you mean?」

「When a certain business starts to deficit, there are normally 3 types of actions taken. One, reduce fixed costs, such as cutting the workers' salaries, or returning leased land… … or reduce social events, right?」

Personnel costs, real estate leasing costs, and communication costs, these 3 types of expenses occupy a large percentage of fixed costs… … In other words, they are hard to cut down. Employees cannot be fired at a whim, and normally 'business is failing' cannot be used as an excuse to return leased land, since things such as contracts exist. As for communication costs… …

「… … A level of sociability must be maintained at all times though.」

「I understand. It can't be helped since you're a n.o.ble.」

That's how it is.

「… … Then? What are the other two?」

「One is to increase sales. For example, increasing productivity to sell more things in a shorter time, or sell products that have secondary uses to increase their base worth.」

The former is the method of selling in bulk, while the latter is the added value method. However-

「… … Does that include what I did?」

Kouta picked up the cup and sipped the red tea. Perhaps he had said too much.

「No. What Miss Erica did was 『crossing over into adjacent industries』.」

「Adjacent industries?」

「Yes. Although, in the perspective of 『agriculture』, what you were doing seems like you're working within the same industry, in other words, increasing the production rate… … However, from the perspective of 『planting new crops that have never been tried before』, it can be counted as crossing over to another industry. But… …」

Kouta sighed.

「… … In most cases, this will lead to failure.」

「Is that so?」

Kouta nodded towards Erica who had question marks floating over her head. The meaning of the term 「adjacent industry」 is very literal. They are industries that share common characteristics with each other and are closely related. For example, in the construction industry, unless you plan on building a house on the sea or floating in the sky, you would build it on the ground- that is, on land. As such, the construction industry and the real estate industry have very close relationships with each other, and thus are regarded as 「adjacent industries」.

「But… … Since they are adjacent industries, wouldn't the chances of success be greater instead?」

「There are many who also think that way, and when they decide to run a business, they would prioritise those in adjacent industries. Instead of venturing into an unknown industry, why not choose to invest in a more familiar industry? They are 『adjacent industries』, after all.」

「Then… … Why would most of them fail?」

「It is true that it is easier to run a business in an adjacent industry. However, most people would become too overconfident in themselves. Plus, the gra.s.s is greener on the other side, even when it shows signs of losses, they would become arrogant and continue to invest in it.」

Erica's eyes wavered for a moment, perhaps she remembered something. She did say, 「can't we just plant some crops that could grow under the sea winds」 in the past and imported the seeds.

「Understanding the market trend is the basics of basics in business. Producing something that couldn't be sold would not be different from producing trash.」

「You dare call it trash… … Hmmph! I get it, okay!」

「There's one more thing. Even though there are quite a few entrepreneurs and corporations that succeed in crossing over into adjacent industries, almost none of them will attempt that when they are facing a 『slump』. They would only do that when their main business is prospering and are able to cover up any losses incurred.  To be honest, if someone could invest in an industry with minimal knowledge about it and still manage to obtain profits, then the ones who were already in that industry to begin with would have been millionaires.」

Erica picked up the cup and drank the red tea with an unpleasant expression on her face. She elegantly placed the cup back on the table and looked at Kouta.

「Then? I now know where I failed… … But is there a way to solve this problem?」

Kouta only shrugged in response to her enthusiastic gaze.

「Thinking of a solution to this problem is no easy task.」

Erica was stunned, her appearance unbefitting of a princess. After a moment, she broke out of her stupor and looked at Kouta.

「You… … Are you pulling my leg?」

「I only heard about the details just recently. If I could come up with a plan in such a short period of time, it would be a miracle… … Unfortunately, reality isn't so kind.」

Erica expressed, 「that's true」, but she had a really unpleasant expression.

「Well, we have found out about many things today. Like you having the will to change, or there being  still some a.s.sets here that can be converted to money… … Ah, while we're at it, give up on agriculture.」

「… … ! You! You dare… …!」

「A-ah! S-sorry! I didn't mean to blame you! On the contrary, you daring to try new things is to be applauded! What I'm trying to say is, you don't have to spend any more money on agriculture now!」

「I-is that so?」

「Yes! But… … having risk a.s.sessment before trying is the best.」

「… … I say.」

「Yes? Please continue.」

「Do you… … have something against me?」

「T-there is no such thing. Y-you really like making jokes, don't you~」

「… … Why are you suddenly being so polite now?」

Kouta smiled bitterly.

「… … It's like this, to an entrepreneur who is willing to change for the better, I would always tell them my honest thoughts. It would be rude if I didn't do so, right?」

「What's with that.」

「You can say it's a 『princ.i.p.al』 of mine.」

Kouta took a drink from his cup again, finishing the tea this time.

「Even if it would end up being rude, if you indeed have the will to change, I would naturally speak my mind. I don't care if you're royalty or n.o.bility or the strongest man on earth… … So, if you feel that I am being too rude, I would advise you to not come to me for any advice or suggestions in the future.」

In the end, he added, 「what do you think? 」

「… … … … Very good. 」

Erica returned Kouta's provocative gaze with her own.

「Since we've already come this far, I won't ignore what you have said, so please teach me what I have to learn. In return, you must also do your best. I do not demand 100% success, but you must do whatever you can. 」

「… … As you wish, princess. 」

Kouta respectfully bowed.

In Erica's eyes, he looked like a knight taking an oath. She smiled contently.

Hey Kei here, uhh so the story’s getting into the business admin side of things now. I don’t really know much about business, and wikipedia isn’t helping much, so if you think there’s any problem with the names, meanings,etc of specific terms, please do give some feedback.

Thanks.