Who runs their own business?

**Edbear** · 23rd January 2010, 20:05

Originally Posted by george formby

I've had a restaurant which was successful according to the bean counters but nearly killed me due to stress & hours. I also ended up being a single husband. After a stint getting paid a good salary & having great holidays I am now the concerned owner of a coffee/ juice bar. Small business is tough but I still love the feeling of making customers happy & being responsible, win or lose. I have grown as a person from taking the plunge into business & learnt a huge amount. The money sucks though. Never mind, onward & upward.

Where are you situated? In a mall? Take a look at where you are and your clientelle base and have a think about something that will give you a unique attraction.

**kwaka_crasher** · 24th January 2010, 00:22

11 years self-employed. No staff. I never advertise or have to deal with Joe Public. All my work comes word of mouth. I don't even have business cards or a website.

I guess I'm lucky it's a niche industry where skills and trust are the asset, not attendance. I pity people in retail - I'd strangle the drips they have to deal with.

I'm never ever going salary or wage again.

**davereid** · 24th January 2010, 07:50

I have been operating a business for 20 years. We started just as me, consulting in electronics. Then we started making electronic equipment in a small factory. Our product was a bit specialist, so we saw the need to diversify, and we started doing security alarms, SKY and satellite TV, just so we had a wide customer base. We had good years and bad years. Many times we paid the wages with our savings or the credit card.

Overall, it has been great.

But New Zealand does not lend itself well to enterprise.

Managing employees is very difficult, as they have a wide range of "rights" which are expensive for an employer to get wrong.

The tax system, and compliance rapidly becomes as important to the survival of the company as its core products and services.

For me, I have found the introduction of 2-monthly provisional tax to be the straw that broke the camels back as they say.

I'll be winding things down over the next year or so.

**Edbear** · 24th January 2010, 07:53

Originally Posted by kwaka_crasher

11 years self-employed. No staff. I never advertise or have to deal with Joe Public. All my work comes word of mouth. I don't even have business cards or a website.

I guess I'm lucky it's a niche industry where skills and trust are the asset, not attendance. I pity people in retail - I'd strangle the drips they have to deal with.

I'm never ever going salary or wage again.

Goodonyer, and if you enjoy what you do you've got the best business going.

**Edbear** · 24th January 2010, 08:11

Originally Posted by davereid

I have been operating a business for 20 years. We started just as me, consulting in electronics. Then we started making electronic equipment in a small factory. Our product was a bit specialist, so we saw the need to diversify, and we started doing security alarms, SKY and satellite TV, just so we had a wide customer base. We had good years and bad years. Many times we paid the wages with our savings or the credit card.

Overall, it has been great.

But New Zealand does not lend itself well to enterprise.

Managing employees is very difficult, as they have a wide range of "rights" which are expensive for an employer to get wrong.

The tax system, and compliance rapidly becomes as important to the survival of the company as its core products and services.

For me, I have found the introduction of 2-monthly provisional tax to be the straw that broke the camels back as they say.

I'll be winding things down over the next year or so.

Good post and good points made. Wages are hard on a business as they are a significant part of fixed costs and the employee needs ot produce more than he costs otherwise he is a liability to the business.

Taxes and compliances need to be accounted for when setting prices or quoting for jobs and this makes it extra tricky in a competitive environment when others are cutting their prices to win jobs. When setting prices, you have to take into account all your costs which many don't do to their long term detriment simply to get the job at the time.

At times, my son-in-law has had to take his own "wage" and profit out of the equation to win a contract, but this is now no longer a problem due to the volume of work he has on the books and in most cases he is the preferred contractor regardless of price due to word of mouth and reputation. He still has to be competitive and certainly tries to give his clients the best deals he can, but it is no longer a situation where he has to be unreasonably cheap to get the job.

Often, people don't realise the costs of running a business and when they find out the cost of a product and compare it to the retail price, they think the business is ripping the public off , and while at times this is true, my accountant once said that my overall GP needed to be 33% or the business wasn't viable, so taking the GST exclusive cost and doubling it to make the GST inclusive sale price gave me about that margin.

However, as some products were extremely competitive, such as the bulk laundry deteregent I was selling I could only put 10% on that and was buying it by the tonne ex-factory, and torch batteries I would buy at the supermarket as I couldn't get them anywhere else for the same price and sold them with the torches at cost.

Some products, however, I could get a GP of 110%+ on while still being cheaper retail than my competitiors, so I made use of that advantage to prop up the lower profit items.

**george formby** · 24th January 2010, 08:19

( In response to EDBEAR'S querie's )

I'm on a main street with good passing trade & a growing base of local customers. Visitor numbers are way down on last year, the whole community is suffering & their are whispers of rent de-faults even though it is peak season. I had hoped that I could develop the shop further if I had a good season, as you say, making a point of difference.
I look at a potential business from the perspective of what it costs to run, not how much it might make so I'm reasonably secure here, I can just plod along without to much stress. The important thing is to continue developing the shop, if I cannot do something this year I will do it next year. It's a lot safer to spend time rather than money at the moment.
Fortunately, good coffee will always be popular.

**Edbear** · 24th January 2010, 08:40

Originally Posted by george formby

( In response to EDBEAR'S querie's )

I'm on a main street with good passing trade & a growing base of local customers. Visitor numbers are way down on last year, the whole community is suffering & their are whispers of rent de-faults even though it is peak season. I had hoped that I could develop the shop further if I had a good season, as you say, making a point of difference.
I look at a potential business from the perspective of what it costs to run, not how much it might make so I'm reasonably secure here, I can just plod along without to much stress. The important thing is to continue developing the shop, if I cannot do something this year I will do it next year. It's a lot safer to spend time rather than money at the moment.
Fortunately, good coffee will always be popular.

Unfortuantely we didn't get up to Paihia this Summer, (yet...), but it is probably one, if not the favourite place of ours. We have stayed at the Abri for an anniversary there and probably had a coffee at your shop. Which one are you? 35 Degree Sth is a great restaurant, too.

I thought the shopping there was very good for a small town. There are, of course a zillion coffee lounges there so you are definitely in a competitive area, but as you say, good coffee will always sell. All you need is to be in the right part of the street, ie: convenient and sell great coffee and have the cafe and staff look attractive. By staff, I mean if they are genuinely open and friendly and smile, if they look like they enjoy their job, they will attract custom.

I don't think it would need much of a gimmick to give you an edge though, especially with the care you take over your costs.

**george formby** · 24th January 2010, 08:52

I've been in hospitality for over 30 years, customer service, quality & consistency are absolutely paramount. I really enjoy making my customers happy, making little coffee addicts.

**Edbear** · 24th January 2010, 08:59

Originally Posted by george formby

I've been in hospitality for over 30 years, customer service, quality & consistency are absolutely paramount. I really enjoy making my customers happy, making little coffee addicts.

And that's what will keep them coming back! Next time we're up we'll pop in for one!