I work extremely hard in my cafe but I can barely take a salary from it
Problem Solver for Small Businesses:
Q I run a cafe in a rural town that is performing just about okay and I also do some catering for private individuals as well as a small number of local businesses. I work extremely hard and can barely take a salary from the business. I am totally hands-on in the business and feel I am sinking rapidly.
A Clearly you are giving the business 110pc, and yet you can't get a decent return from it. The solution, to some degree, lies within your own control.
By throwing yourself into the business in the way that you have, you have left no time to manage the cafe.
First of all, find a way to free up your time for three hours a week. If that means increasing a member of staff's hours, rescheduling the rosters or taking somebody new on, perhaps on a part-time basis, then you must do this.
These three hours will become invaluable to the business and will generate a multiple of what they cost you in additional revenue.
The problem is that you have been sucked into the "quick sand" of daily work that can be all-consuming, leaving no time to run the business.
It sounds to me like there are lots of opportunities in the business going amiss. Have you developed a marketing plan for the cafe? Have you looked at doing a pop-up, full-scale restaurant one evening as a pilot test? Have you produced some good brochures for your catering business in line to promote this?
You will find these three hours a week you spend working on the business, rather than in the business, will give you a totally new lease of life and will also re-energise the business.
Lastly, what about your own personal work/lifestyle balance?
Try to make a rule that you leave early one day per week and just get that extra hour to spend on a hobby or with your family.
That magic hour will help you to move to a new space where your perspective on life and the business will improve dramatically.
Q I am considering opening a speciality food shop in a large Midlands town; do you have any advice?
A The retail sector has been challenging for the last six or seven years, and yet in the midst of all of that, there are examples of some great retailers who are bucking the trend on the speciality side of things. I applaud the work the likes of Avoca and Donnybrook Fair are doing in bringing great food of their own and artisan products to a wider consumer group.
You do, however, have to exercise extreme caution, especially if you are locating in a regional town. Is the market big enough to sustain this model? Are there enough customers with sufficient interest in the type of food you will be doing to get you the weekly sales that you will need?
One of the things you might consider is to do both retail and sit-down food, which would help you generate revenue on both sides and make the most efficient use of space.
It could also be worth your while having a look in your region to see how many good restaurants there are and how they appear to be performing. This could be a good indicator of the local interest in speciality food.
If your feasibility research proves positive, then you are into choosing a suitable location. It is interesting to look at the whole farm shops and speciality concept in the UK, many of which are located in secondary locations, but their offer is so strong that it acts as a magnet for consumers. And one thing they do have in abundance is parking.
Once you have selected your location and your product range, you then need to change focus completely to innovative marketing in order to attract customers. Building up a strong social media presence, a text database of your customers and giving lots of food talks and running events will be all part of this phase.
Retail in general, and particularly speciality foods, looks like an easy option for many people as a business start-up. It is, however, highly complex and there are significant examples that have started with the best of intentions but failed over time due to poor research and planning. Very structured research at this early stage could prove invaluable.