What do you guys think about this..........
My DH ,(gosh I love saying that now, since we're married 3mos this week! lol! Cheesy I know) and I will be operating the shop I'm opening in October. Should I hire someone else or two? I really want to keep overhead down if possible, especially starting out, but I also want to run an efficient and smooth operation. I'm thinking I will be quite busy since the people in the area are already inquiring about when I will be open and they can't wait, but I THINK if I bake early and get the case full before I open, I will be ok for now. I need some other cake vets advice on this one!
It isn't cheesy. I adore my DH more with each passing year. We just celebrated 11 years last weekend.
I don't have a bakery, but I do co-own a business. We usually wait to hire someone new until we know our production will support it. Since you will be just starting your business, the less overhead the better. If you find that you occasionally need someone extra, you can hire them as an independant contractor. It is more cost effective because they are be responsible for reporting their own income, paying taxes, ect. There are some restrictions to it, so be sure to check with your accountant/tax person.
Thanks so much mightydragon! I think that is the way to go! Glad I'm not the only who adores their DH, and that it can continue on year after year! Congrats on 11years!
another thing to think about is many new business do not make a profit in the first year.
so If all the family income comes from your business if you have a lean month you will be in trouble.
It might be better if he continues to work at his job for now and helps out on busy days and then hire help for now.
Unless he is also a fantastic cake decorator also.
I agree wait until you find out whether you would need someone or not.
When I open I plan to hire someone. But it will be very part time and so I can make sure someone is up front at all times. I don't want to be in back preparing things and have to either just leave it in middle of a crucial moment or ignore a customer. This is again be very part time just so that my husband can take a little time off here and there.
26 years, and still doing OK!! We opened a business together a few years ago, which was an interesting learning experience for us- about ourselves, each other. That business closed because of the economy, but we look forward to trying something else in the future!
Oh, to answer your question.. I would do as suggested and bring in an independent contractor for the first few days as you open. The initial interest sounds like it will support it. You will probably see a decrease after everyone checks you out. Then you will start to be able to see a pattern. Then you can look at numbers and see if you can bring in a regular helper, or just stick to ICs for the busy times, like holidays.
I'm also going to be trying to land some solid corporate accounts for employee birthdays, hospitals, functions and parties to offset the shop.
You most likely CANNOT legally hire someone as an independent contractor for your situation. The IRS rules governing the classification of employee vs. contractor are very specific in that if you as the business owner have the right to direct how the person does their work, they are an employee. I assume you would want to direct them how to serve your products and ring up your sales and follow other procedures. If you do, this person is an employee, no ifs-ands-or-buts.
For the people advising this as an option, please be more careful to understand the rules before advising someone to do this. I have been an independent contractor in another industry for years and also have years of tax prep experience. It's a real pet peeve of mine to hear people dishing out advice that is not legal or proper because they "heard it from someone that's done it" or "my sister/friend/whatever has a business and they do XYZ."
A better, more legal option, might be to contract through a temporary employee agency so you would have no tax/payroll issues and no commitment to the length of the employment. However, with the rates agencies charge, it's probably more expensive this way.
Right on the money mseif that was one of the things I was going to state.
Here is more on this topic. If you are just going to offer custom/decorated cakes I would suggest starting out as a "by appointment only" store. I speak from experience on this. Several years ago my cake order volume was consistant I assumed that if I opened on a daily basis and offered more grab & go items (ie: cupcakes, cookies, already decorated cakes that just needed an inscription) that my bottom line would increase significantly since I had people asking me of telling me they wished I was open so they could come in for those "last minute" or impulse orders. So there I was with a full case, spent a small fortune on advertising that my shop was not open on a daily basis, I even offered "made to order" sandwiches and homemade soups in this brainstorm I had hoping to make more money. Needless to say eventhough I did have many come in daily for lunch and a few each week coming in to purchase items, I still ended up throwing out so much product because I REFUSED to sell something that wasn't fresh, I just was not going to compromise on product quality to make a buck. The reason people purchase from me is be cause my cakes are so moist and flavorful and my icing is to die for. If I let it sit any longer than 2 days, to me that quality begins to decline. So after all was said & done I was actually loosing money on the open daily venture, plus I didn't have the back up capital to float me until the traffic was more substantial to warrant offering the grab & go items. Plus my electric bill & water bill climbed considerably! And I did have to hire employees. For me it was not a good thing...so I went back to being open by appointment only and my bottom line is now healthy again.
I do wish you much luck in your endeavor!
I stand corrected.
(but I will point out that I did advise to check with an accountant/tax person for the restrictions)
Our office manager is an accountant and has a masters in taxation, so she keeps us legal in that area. Sorry for the misinformation.