"But there’s another thing we should do in order to protect our investnts," Ernest shifted to another topic.
"Okay, what is it?"
"Insurance," Ernest said.
Hollen blinked.
"Insurance?"
Actually, the concept wasn’t entirely foreign.
rchants occasionally pooled money together to compensate losses from shipwrecks and bandit attacks.
But it wasn’t organized.
It wasn’t systematic.
And it certainly wasn’t available to ordinary businesses.
"Yes," Ernest said.
"Think about it."
He leaned forward slightly.
"We are about to invest over six million riels into three new factories."
Hollen nodded.
"That is correct."
"What happens if one burns down?"
The forge owner imdiately frowned.
"Don’t say things like that."
"I’m serious."
Ernest pointed toward the Northport report.
"A fire, a flood, or a warehouse collapse, anything. We could lose millions."
That imdiately got Hollen’s attention.
Actually, businessn loved discussing profits.
Very few enjoyed discussing risk.
But risk existed regardless.
Ignoring it did not make it disappear.
"So what’s your solution?" Hollen asked.
"Create a reserve fund."
Hollen looked confused.
"A reserve fund?"
"Yes."
Ernest grabbed a blank sheet of paper.
"Every month, we set aside a percentage of profits."
"How much?"
"Five percent."
Hollen quickly calculated.
If profits eventually reached nineteen million riels monthly as projected...
Five percent would be nearly one million riels every month.
His eyes widened slightly.
"That seems excessive."
"Until sothing goes wrong."
Ernest shrugged.
"Then suddenly it won’t seem excessive anymore."
Actually, many successful companies failed not because they weren’t profitable.
They failed because one disaster wiped out their cash reserves.
A warehouse burned down.
A shipnt sank.
A harvest failed.
And suddenly the business couldn’t recover.
"We’re expanding too fast to ignore risk."
He tapped Northport.
"Imagine this factory burns down."
Then Ravenford.
"Or a flood damages production. Those aren’t impossible events."
"No," Hollen admitted.
They aren’t."
Ernest nodded.
"Exactly."
"The reserve fund becos our insurance."
Money that remained untouched.
Money only used during ergencies.
The forge owner slowly leaned back in his chair.
Actually, the more he thought about it, the more it made sense.
It wasn’t exciting.
It wasn’t glamorous.
It didn’t directly increase profits.
But it protected them.
And protecting wealth was just as important as creating it.
"How much should we keep?" Hollen asked.
Ernest smiled.
"Enough to rebuild an entire factory."
The room beca quiet.
"An entire factory?"
"Yes."
"If one factory costs two million riels to build, then eventually our reserve fund should hold at least that amount."
Actually, Ernest wanted more than that.
Ideally much more.
But there was no point overwhelming Hollen all at once.
"Once we reach that amount, we can continue adding to it. For future expansions and ergencies."
Hollen slowly nodded.
"I like it."
Then he chuckled.
"It’s not often I hear a businessman suggest putting money away instead of spending it."
Ernest laughed and then suddenly, they heard a large cracking sound.
"What the fuck was that?" Hollen cursed as he rose to his feet.
Ernest imdiately went outside and saw dust flooding it.
"What the heck happened?"
One of the workers approached. "One of the river barges, sir!" the worker shouted while pointing toward the river.
"What?"
Ernest imdiately pushed through the gathering crowd.
Hollen was right beside him.
The closer they got to the riverbank, the clearer the situation beca.
And it was bad.
Very bad.
The massive waterwheel that powered Helmarte Soap Works had partially collapsed.
One side of the wheel was completely shattered.
Broken wooden beams floated downstream.
Several paddles had been ripped clean off.
Part of the supporting structure leaned at an awkward angle.
Workers were already running around the riverbank in panic.
So pointed toward a large cargo barge that had drifted against the shore.
The vessel sat crooked in the water.
Its bow was lodged directly against the remains of the waterwheel support structure.
The captain stood on deck looking absolutely horrified.
"Oh no."
Hollen stopped walking.
For several seconds he simply stared.
Actually, Ernest understood why.
That wheel was the heart of the factory.
No waterwheel ant no chanical power.
No chanical power ant reduced production.
Reduced production ant lost money.
Lots of money.
The forge owner suddenly exploded.
"WHAT IN THE GODS HAPPENED?!"
The barge captain imdiately raised both hands.
"It wasn’t intentional!"
"One of the steering oars snapped!"
"The current pushed us sideways!"
"We tried to stop!"
Several dockworkers nearby nodded.
Apparently they had witnessed the accident.
One stepped forward.
"He’s telling the truth."
"The steering oar broke."
"The current grabbed the vessel."
"There wasn’t enough room."
The man pointed toward the remains of the wheel.
"It hit the supports directly."
Ernest looked at the damage.
Actually, his first instinct wasn’t anger.
It was assessnt.
The engineer inside him imdiately began analyzing the structure.
Broken paddles.
Collapsed outer rim.
Damaged shaft.
One support beam destroyed.
But...
His eyes narrowed.
Interesting.
The entire system wasn’t destroyed.
Only part of it.
The central axle still appeared intact.
The foundation remained standing.
Several major supports survived.
That changed things significantly.
Hollen was still furious.
"Do you realize what you’ve done?"
The captain looked ready to faint.
"My company will compensate you!"
"We have insurance through the Shipping Guild!"
Ernest’s eyebrows rose slightly.
Insurance.
The irony was almost comical.
Five minutes earlier they had been discussing reserve funds and risk managent.
Now they were standing beside an industrial accident.
Reality had wasted absolutely no ti proving his point.
Hollen looked toward Ernest.
"What do we do?"
The workers also looked at him.
Actually, Ernest noticed that imdiately.
"Without the waterwheel, the production process of soap is halted. Contact the contractor who built the waterwheel and get them here as soon as possible. I want the waterwheel repaired in a week. Shit, that’s a lot of soap not produced in a week."
After hearing that, Hollen shouted at the barge. "You fucking bitch! Next ti if you are going to sail, conduct pre-checks on your vessel first to determine if she’s so worthy. Your goddamn company is going to pay for this!"
"Hey hey hey," Ernest pulled Hollen back. "There’s no point doing it. What’s done is done and they are taking responsibility. Let’s just handle this."
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