Small Business Worries

paulwf

paddyrg wrote: »

Bank - £100/month in charges is very high, look at other banks business banking offerings, you may find one offering a better tariff for you?

The simple way to reduce bank charges is to pay suppliers (most catering is COD) and staff in cash, obviously with full payslips etc. If you pay money into the bank and then out again that means the bank get to charge twice which is when the costs add up.

If you do have to pay bills through the bank lump together invoices to reduce BACS charges. Pay in money less often as well.

It should be possible to halve that banking charge if you run the business mainly on cash

Googlewhacker

From my little knowledge of catering etc this time of year is traditionally going to be quieter as the weather is good and you should see a natural upturn in sales come the colder weather.

What advertising have you done and have you worked with your local shop (ie done a BOGOF voucher for the to hand out to their customers for a drink etc?)

Savvy_Sue

jexygirl wrote: »

You say you have staff in for 60 hours a week - but those figures (admittedly its late, so I did calculate over a 4 week month - 2700 /4 (weekly) then by 60 (hours weekly) = £11.25 an hour! I think you need to be more real about staffing hours or their pay!!!) plus you then have the NI and tax bill on top.

jexy and others have given excellent advice, but this (that your staffing costs might be higher than absolutely necessary) had occurred to me too. All I've popped in to say is that you need to understand what your legal responsibilities are as an employer before you start changing contracts by reducing hours and / or wages, and / or making staff redundant. And again, this is something you need to understand, yourself, even if you then go and take proper advice from an employment solicitor, which in some situations would be money well spent if it avoids the stress and hassle of an employment tribunal because you got it wrong!

Another question for you: did you take all your staff on when you opened your business, or did you take over an existing business and 'inherit' any staff? If it was the latter things may be even more complicated.

Lanz81

THANKS AGAIN GUYS ;0) REALL APPRECIATED ALL YOUR ADVICE ON HERE.

to answer some queations you have raised:

1, we do sell tea and coffee but i like you idea of making it a bit more 'posh' for the office staff. so thanks for that idea.

2, brekkie trade can sometimes be ok and i can earn up to £50 before i even open as my partner and i drop our son off at playschool and go in at 9am to prep so we dont pay any staff to do this so while prepping i serve breakfast too. we also do an all day breakfast menu which does well especially with the builders that are around the area.

3, staff and including our wages are around £630 per week. as from next week i am cutting staff our to make all of them work part time so that no NI or Tax will need to be paid for them. As for our drawings/dividends, that is the bear minimum that we can take to live and pay our mortgage, bills etc, we really cannot afford to take any less especially as they have now stopped our child tax credits and i have to pay for our son to go to playschool.

4, your right about the business plan and i am going back and reviewing it. part of it was based on school kids at lunchtime but since opening they have banned the kids from leaving school at lunchtimes! also just as we opened so did a Greggs by the local offices! but we are still doing well with the office even though it can be a walk for them. Tourist trade we also based on which can do okay depending on the weather.

5, we are revewing our stock at the moment and doing lots of shopping around as i always do anyway! and trying to bring it down to £4k per month.

6, you have made me realise that i need to know in more detail every item i sell what it costs me and how much profit i make so have started a spreadsheet tonight, i know roughly the figures but thats not good enough i should know the exact amount! we buy the best quality fish and potatoes around and have built up a very good reputation for this.

7, i have to say i am very good at selling extras and getting people to buy curries that they werent originally coming in to buy! lol

8, our accountants didnt do the best by us. i know it is our responsability for many a things but there we many things that as customers new to owning a business they could of advised us better. I keep receipts for everything and am good at ensuring records are kept etc but as i said there were many things that they could of advised us better on and put expenses through for that we were not aware of.

9, the waste records is to re-adjust the Gross Profit Calculations by journalling the figure out of purchases and into the Overheads. So we keep a record of any food left over everyday not food that is out of date etc as i monitor that very closely. We try to keep waste as minimal as possible but you cannot predict everything that you sell on a day to day basis. one day its a pie day, next day its a fishcake day etc lol!

10, home office, laundry, mobile phones etc is included in our year end finacial reports i think its offset against corporate liability. all depends how you are set up i suppose, we are a limited company.

11, we do deliveries and i keep all receipts and record any mileage for deliveries and trips to the wholesalers, bank etc.

12, The rent is £270 a month, cheap I know, its because we rent it from the council!

13, maintenance etc i have included under misc.

14, we pay ourselves £140 a week each wages tax free and £100 a week each as drawings/divends.

15, bank charges are high, they charge so much for paying in, we pay most stock and wages cash etc but i pay utility bills etc via direct debit. plus we have an overdraft at the mo. it is an estimated figure as can sometimes be lower.

16, your right about the weather but also when its sunny it helps us as we are on a tourist spot

17, local shop are good friends of ours now and they help promote us as we do them

18, agree on the wages part etc. we have no staff contracts. one member of staff is my sister and we have a very loyal girl who has been with us from the start.

What I havent told you all is that we opened this shop with another couple and we bought them out in feb this year as it all got too much and the business could not afford to pay two sets of wages to two families and thing started to get a bit silly and not enough was being done to conentrate on the business just about arguing hence why we got in to so much of a pickle!

I really really appreciate all your help and support in this guys.

Lanz xxx

Savvy_Sue

Lanz81 wrote: »

18, agree on the wages part etc. we have no staff contracts. one member of staff is my sister and we have a very loyal girl who has been with us from the start.

That is why I said what I said before, you need to understand your legal obligations as an employer, and clearly you do NOT!

Where to begin:

• You are required to give all staff a written statement of their terms and conditions within 8 weeks of starting. Having said that, if you don't then there are very few sanctions, but if either your sister or your 'very loyal girl' decide to take you to an employment tribunal, it will cost you more.
• You DO have staff contracts: they agree to turn up, you agree to pay them, that's a contract!
• If your staff have been working X hours per week, you cannot suddenly reduce that to Y hours per week. You must consult - at the end of the day you can still reduce hours etc, but if you don't consult and those new reduced hours are not enough to live on, then you're at serious risk of a constructive dismissal claim.
• Please tell me you know that all your staff are entitled to at least 28 days paid holiday each year ...

Start here. That's slanted to the employee's position, but I'm sure if you look at their rights you'll get a better understanding.

paddyrg

Lanz81 wrote: »

7, i have to say i am very good at selling extras and getting people to buy curries that they werent originally coming in to buy! lol

How about selling cold curries in (scent-proof?) bags with a naan bread and side dish so office workers who pop in for a sandwich can take it home to heat up for dinner?

photogifts

I know a high chance this may have been done or thought off or suggested but a suggestion anyway but what about a leaflet drop let them know are you are there i know some new company's have found it helpful and they keep pounding them out or free social network profiles like a face book page run some promotions i know mouth watering photo's lure me in,

I don't know if employ a driver for delivery's or do it yourself but i know one local chippy that employs a young lad on his bike < i don't know legal side to this tho > but might be able to free up one of you's to keep working in the shop save petrol or extra wage cover

And any costs you save see any way if you can pay towards high debt or loans to free up

I am not as business savvy as the others on here but hopefully useful some way

Annisele

Please take on board what Savvy_Sue says about your employees - you do have staff contracts, and you need to make sure you are complying with your legal obligations as employers.

I can't say much else helpful - I don't know anything about your industry - but I'm not sure whether the figures you gave at #5 are four weekly or monthly.

For example, you say in #15 that your rent is £270 per month and you take dividends of £100 per week each.

In #5, you give a rent figure of £270 (implying that they are your monthly figures) and a dividend figure of £800. £100 per week to two people is £866 per month, not £800 - and if your margin for error is as small as it seems to be, you can't afford to have £66 per month wandering around unaccounted for.

Horace

Maybe you should do a leaflet drop to the businesses that you claim have staff canteens? Some people want to get away from the office at lunchtime, I know that I did when I worked somewhere with its own canteen - it gave me a break from work.

You said that you did all day breakfasts? How about offering bacon sandwiches in the morning with coffee that folks can take away?

Listen to what Savvy Sue has said with regard to contracts etc. You don't want to become unstuck and have a costly legal bill when a member of staff decides to take you to a tribunal - ignorance is no defence and as a business owner you need to take account of the rules for employing staff, paying them etc.

chalkie99

Lanz81 wrote: »

14, we pay ourselves £140 a week each wages tax free and £100 a week each as drawings/divends.

I have scanned through this thread a couple of times and apologies if I have missed reference to this but.........

.....you refer to wages, drawings and dividends.

Firstly, you may not be paying yourselves the optimum amount as a wage to avoid National Insurance charges.

Secondly,and more importantly, you say you are paying an extra £100 a week each as "drawings/dividends".

Which is it? There are really no such thing as drawings. Are you actually paying yourself a wage of £280 each?

Dividends can only be paid from cleared profits of the company and it is apparent from your posts that the business is not making a profit. Therefore, you simply cannot take money as dividends. It is illegal.

Sorry if this drags you down a bit deeper but I think it is important you get things as straight as possible.