adven68 Posted 6 Jul 2012 , 1:39pm
post #1 of

Hi everyone....some of you may remember me from a while ago....I have harldy been on since I openend my shop becasue it has consumed my life.

My problem is that I have a little gem of a store...I have the clientele, location, ...everything you might think one would need to succeed....the orders are coming in but I am so tired that I cant take it for much longer. If I hire someone....(not that it's easy to find someone qualified), the salary, taxes , payroll, insurance, etc...eats up all my profits...
The hours are killing me...a lot of late nights...sometimes all-nighters. I am not afraid of hard work, but I have two kids at home and I cant keep this up. It doesnt end at the store, either....at home, I need to spend a few hours on the computer daily....answering emails, sending invoices, shopping for materials, paying bills, etc....
I'd love to hire someone to do that but I cant afford it.

My husband suggested taking on a partner....I find the idea of giving up control of my shop daunting, but maybe one of you can give me advice on doing that or anything else that might help? I am totally burned out and I have to drag myself to the store at this point.

I've decided that for the next two months I will only give classes....just to give myself a predictable schedule that will stll pay the rent for a little while.

Any suggestions???

thanks!

22 replies
Unlimited Posted 6 Jul 2012 , 3:57pm
post #2 of

Work smarter, not harder. Learn assembly-line techniques to use when possible. This might not help your business much, if you do 100% custom orders. What do you specialize in?

jason_kraft Posted 6 Jul 2012 , 4:06pm
post #3 of

I'm not surprised you're burning out, you are one person trying to cover three full-time jobs (business admin, retail, and baking). I recommend either severely cutting back on the hours you are open or just open by appointment only until you can find a partner.

You may also need to look at your pricing, if going it alone is the only way you can stay profitable you really don't have a viable long-term business model. Generally this would be apparent in your business plan, as you need to set a budget of both money and time so you can see how many FTEs are required for the business to run.

MimiFix Posted 6 Jul 2012 , 4:11pm
post #4 of

I just visited your website and Facebook pages. You do that all by yourself? Hon, you need to hire help or sell your shop. Partnerships are real iffy.

louanne Posted 6 Jul 2012 , 4:58pm
post #5 of

Depending where you are getting someone to help you as an independent contrator may solve the problem. Some places do not allow this, others do.

I had a girl that was an idependent contrator and it worked out very well. I only felt I needed an extra person to help, so to me not worth the hassel of all the extra tax stuff. We typed up a simple"contract" stating she was being brought on as an independent contrator, not an employee, she would not be entitled to workmans comp or have taxes held out, she would get a 1099 at the end of the year and would be fully reponsible for any tax liability.

Sure, you will have to accept whatever schedule they are available, but most people that want to work are going to be reliable whether they are an IC or employee. You will need a workman's comp opt out form, you can get from any department of workforce (usually online) they fill it out and mail it in, most places it is a $50 fee and it is good for several years, it protects you from being liable for injuries or anything else that would be filed as workman's comp.
HTH

jason_kraft Posted 6 Jul 2012 , 5:01pm
post #6 of
Quote:
Originally Posted by louanne

Depending where you are getting someone to help you as an independent contrator may solve the problem. Some places do not allow this, others do.



In the US you have to be very careful about this, since if you don't follow the IRS's strict rules about how to treat contractors they may end up being classified as an employee anyway, which means you would be liable for back employment taxes.

https://www.google.com/search?num=20&hl=en&site=&source=hp&q=employee+vs+independent+contractor

Quote:
Quote:

You will need a workman's comp opt out form, you can get from any department of workforce (usually online) they fill it out and mail it in, most places it is a $50 fee and it is good for several years, it protects you from being liable for injuries or anything else that would be filed as workman's comp.



This can also potentially be dangerous, since if the IC does not have their own WC policy you can still be on the hook for any on-the-job injuries.

rosa369 Posted 6 Jul 2012 , 5:05pm
post #7 of

Teaching sound good to me.

louanne Posted 6 Jul 2012 , 5:31pm
post #8 of

yes, you do have to be careful on how you treat them, but it is still very possible for the arrangement to work, I am in the US, my brother is an attorney that specializes in employment and workman's comp clains. So yes it should be clear you do have to follwo regulations to a T, but it is possible to do so. The Worman's comp opt out form is fille dout by the IC not by the business and submitted. If done properly they cannot hold you liable, you just have to amke sure it stays current. I work in a health related offcie that deals with CNAs, all our aides ar IC's, we have had some try to hold us liable for injuries, but because they have a current opt out form in our files, and have signed a contract stating they understand they are not eligible, so far any claims made have not resulted in having to pay out anything.

While yes you have to follow the regualtions exactly, if you are willing to allow someone to set their own schedule and abide by the rules, it is a solution. It is not for everyone, but I have found not only when I had a bakery but also in the current field I work in as long as you dot you i's and cross your t's and not cross the "employee" line you are fine. Like I said people who want to work will work whether they are employees or IC's, that's the biggest problem with IC's, not being able to say "be here, do this or your fired" but if you have what you expect lined out in the contract ( your duties wil be.....) then you are fine, you cannot say "you are fired" if they do not work out you just say " your services are not needed at this time"

yes it can be a headache, I deal with on average 50 IC's everyday ( I am not running the current business, I am an employee, hired as a supervisor), but for those who want to circumnavigate the extra expense of employees, it can be done, you just should read up on what is and is not acceptable.

I did not make the recomnedation ss something just to jump into, everyone should always look into and do their own research into any idea or solution given.

MimiFix Posted 6 Jul 2012 , 6:01pm
post #9 of

A business can hire an Independent Contractor for things such as making deliveries. Or for a bookkeeping service to work onsite. But if the "contractor" is working onsite doing bakery chores at the direction of the owner, there are very specific rules, as Jason pointed out.

kelleym Posted 6 Jul 2012 , 6:22pm
Quote:
Originally Posted by MimiFix

A business can hire an Independent Contractor for things such as making deliveries. Or for a bookkeeping service to work onsite. But if the "contractor" is working onsite doing bakery chores at the direction of the owner, there are very specific rules, as Jason pointed out.



Yes, as the others have said, tread carefully. We were audited in a routine audit by our state unemployment agency, and they were very careful when going over the records of our one 1099 contractor. We were ok because he worked at his own home on his own computer, on his own time. It would not have flown if he had been coming into our office and using our equipment under our direction.

Adven68, it's good to hear from you again, even though I am sorry to hear that you have fallen victim to your own success. Jason's advice was sound, I would second everything he said.

SPCOhio Posted 7 Jul 2012 , 2:27am

You are an amazing talent! My hope is that you find balance so you can continue to develop your artistry. It's quite a feat to take on all by yourself, especially the way you are doing it (beautifully and imaginatively)! Perhaps there is a school, trade school or college/university nearby that you can draw some help from in exchange for experience? Perhaps you'll find the answer among the students you will be teaching. I know I'd love the opportunity to work with someone like you simply for the learning experience, even if I'm just doing the invoicing/bill paying! Best of luck to you and please don't let your star burn out. icon_smile.gif

scp1127 Posted 7 Jul 2012 , 2:48am

I agree with Jason's first post. You really do not have a viable, gem of a business, if you can't hire. The structure does not work.

My suggestion is to look back at your business plan and see what went wrong. If you didn't have one, it would be best to slow it down and do one asap. It will take quite a bit of time to do it correctly. You have most of your information. Now you need to see if restructuring is possible with a profit. If not, it would be best to close as the hours will not get any better.

You need to look at output needed to stay open, the man hours to do the job, and the correct pricing (but still market price) to make it work.

In a retail operation, there needs to be counter people for the amount of hours open, people to do the baking to make the required amount of goods, and a bookkeeper/secretary/manager. Where you want to be in the mix is up to you and not all of these jobs take 40 hours, but they all need to be done by a specific amount of man hours.

modthyrth Posted 7 Jul 2012 , 5:06am

Noooooo on taking on a partner. I let my husband talk me into that once about 10 years ago. It ended with her stealing my SSN out of our accounting software and logging into our personal bank accounts, having to hire an attorney to get rid of her, and pay her $5k just to get out of our lives. No no no NO. Never give up ownership like that, no matter how well you think you know the person.

I agree that you need to change your pricing. If you can't afford to hire employees, then you're not charging enough to run a business.

pieceofcake561 Posted 7 Jul 2012 , 5:22pm

Maybe you could reevaluate your business plan to see where your money is going. This way you can focus your attention and efforts in more profitable areas and save enough to hire someone

carmijok Posted 7 Jul 2012 , 7:54pm

The bakery I worked for had this same problem and she ended up closing her business. She was NOT a good manager and she hated that side of things. She chose not expand. Which is too bad because she did really nice work.

Personally, if I were you, I'd hire a couple of part time people, (you will avoid a lot of the financial burdens of having a full time employee). Bring them in to do a lot of your busy work including scheduling cakes, dealing with customer pick-ups, coloring fondant, cleaning, doing dishes, etc. Then as you observe them you may find they have the potential and the desire to do more and you can train to bring in more to the baking and decorating side of things.

If you are concerned about hiring them yourself, look at working with an employment agency that can screen applicants first (you still choose) and if they aren't working out, the agency is the one to release them and find new. They are also the ones who deal with the taxes, etc. You will pay for this service, but it might be worth it if you can give yourself a normal life. Might have to raise your prices as well.
Just some thoughts! thumbs_up.gif

majormichel Posted 7 Jul 2012 , 11:37pm

I am getting back into the business and decided to focus on wedding cakes rather than birthday cakes. I agree the birthday cakes brings in steady income, but the wedding cakes have a higher profit margin.

Just a thought for you to scale back a bit.

Annabakescakes Posted 8 Jul 2012 , 2:25am

no no no nonononononnonono! ON PARTNERSHIPS! "So whats the alternative to a partnership? Depending on your situation, we might recommend a joint venture. This would basically make you the owners of two separate companies who are working under one legal entity. Joint ventures are much easier to manage than partnerships if you ever decide to part ways and do your own thing."- Dave Ramsey

Maybe you could have a joint venture where you release a certain part of your business where you aren't making as money, or it is becoming too much work to deal with, such as cake balls and coffee, or whatever. Have them make an investment on the ingredients and packaging and advertisement, and just wash your hands on the whole thing. If they need extra equipment, they need to furnish it.

It seems to me you also need to raise your prices! It may thin out some of the orders, and if you aren't selling a lot of an item, eliminate it. Thinning out choices means less work. At least hire someone to do the dishes. My understanding is that with an IC, you can say," Your job is to do these dishes, it pays $25." Or ,"You get $1 per serving on each cake you decorate. This cake needs to be done before 3pm." There can't be hourly wages, everything must be a fixed wage.

adven68 Posted 8 Jul 2012 , 5:48am

Thank you guys and gals so much for spending a few minutes to help me out....its also so nice to see some familiar faces icon_smile.gif
So, I think I will schedule some classes for September and use that time to hire and train a few part timers that will each do a specific thing .... I think if I come into a clean store with cakes already iced and filled, then I can handle the decorating. I literally have people coming in DAILY asking me for a job. I currently have 3 interns.... I definitely need advice about how to manage them because a business person I am not! Lol
I opened only because I had amazing support from my brilliant husband and cousins ....an attorney, an accountant, a plumber and a contractor!

Like many cake artists, I feel like i need to have control over everything.....the answer is probably to let go a little.

While my cake prices are OK....I charge $8 per serving....I need to re-evaluate my sugar-work prices and definitely raise them. I am exhausted but I still love to admire the finished product so I think there is still hope for me. Thanks again ....I will keep you posted!!!

Annabakescakes Posted 8 Jul 2012 , 6:03am
Quote:
Quote:

While my cake prices are OK....I charge $8 per serving....




I don't get it...How do you not have the money to hire? Maybe it would help if we knew how much the rent is...Costs must be much higher up there!!! What is the cost of a gallon of milk, or a loaf of bread? How about a dumpy 2 bedroom apartment? I charge $2.75 for buttercream and $3.25 for fondant, though it is going to $3. and $3.75 next year. I am going to be bringing in a dishwasher in the next month. Milk is $2.59 for the store brand, bread is $2.10 for a good national brand and you can get a dumpy 2 bedroom apartment for $575 a month icon_smile.gif

MaurorLess67 Posted 8 Jul 2012 , 6:27am

Two - bedroom apartment for $575???? Wow-- you can't even walk in the door to look at a studio for $575.00 in NY-- and I'm not even exaggerating. On Long Island we pay the highest property taxes and utilities in the country.To put it into perspective, my property taxes, for a medium size home approx 12 rooms, are $11,000.00 a year!--ugh-- and your looking at approx 500- 600 a month for utilities.. So if you were ever wondering why New Yorkers are cranky- that is one of the reasons- ha!!

Annabakescakes Posted 8 Jul 2012 , 6:42am

Wait! A medium sized home is 12 rooms? Are bath rooms "rooms" when calculating? I have a small ranch style home, 3 bedroom, 3 bath, living, dining, kitchen, all very small with full, unfinished basement. Value $145,000, taxes ...I forget...between $800- $1,200? I'll remember in a couple months when I get the bill! thumbsdown.gif

A decent 2 bedroom is more like $700- $1,100. Most typical houses rent for $1,200 a month. In the dumpier areas, IE, the ghettos of greater Cincinnati, my friend rents a 2 bedroom $275 a month, and it is the kind of neighborhood you take the long way to drive around, and when visiting, you are surprised to see your car intact and where you left it when you look out the window.

MaurorLess67 Posted 8 Jul 2012 , 6:58am

Well, compared to some of the houses here- it is med- to largeish I guess- 5 bedrooms, 3 baths, den, living room, dining room , office, playroom, kitchen- so I guess largeish-. I do live in a very nice area out on Eastern Long Island, across the street from the bay- I have a creek that runs through my backyard- my town is precious, we actually have a Main Street with all Mom and Pop stores etc-

Home values are CRAZY here- and they went down- so $480,000- down about $120,000 at least- I bought at at GREAT time so I am still ahead of the game- but man, the monthly nut- especially taxes on Long Island are out of control- and get this, most Long Islanders don't move off the Island- we just don't- if you are a South Shore girl- no way are you going to the North Shore- forget another state- ha!!!

Bakingangel Posted 8 Jul 2012 , 7:07am
Quote:
Originally Posted by carmijok

The bakery I worked for had this same problem and she ended up closing her business. She was NOT a good manager and she hated that side of things. She chose not expand. Which is too bad because she did really nice work.

Personally, if I were you, I'd hire a couple of part time people, (you will avoid a lot of the financial burdens of having a full time employee). Bring them in to do a lot of your busy work including scheduling cakes, dealing with customer pick-ups, coloring fondant, cleaning, doing dishes, etc. Then as you observe them you may find they have the potential and the desire to do more and you can train to bring in more to the baking and decorating side of things.

If you are concerned about hiring them yourself, look at working with an employment agency that can screen applicants first (you still choose) and if they aren't working out, the agency is the one to release them and find new. They are also the ones who deal with the taxes, etc. You will pay for this service, but it might be worth it if you can give yourself a normal life. Might have to raise your prices as well.
Just some thoughts! thumbs_up.gif




Carmijok, I think you have a great suggestion that could be implemented easily. thumbs_up.gif

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