Should You Hire a Store Manager When Your Business is Struggling?
As a small business owner, making difficult decisions is part of the journey. Recently, I found myself grappling with a particularly tough question: Is it wise to hire a store manager for a cafe that isn’t turning a profit?
After 11 months of operating a cozy cafe with my parents in a suburban community, we’ve reached a point of disheartening realization. Despite our hard work, we reported a staggering loss of $30,000 for the year. My parents, however, are committed to keeping the doors open, with my father expressing a deep reluctance to let the business fail—even if it means depleting his retirement savings.
Our cafe’s offerings are simple: a range of beverages with an average sale of just $10 per transaction. Unfortunately, this hasn’t translated into the success we envisioned. With gross daily sales hovering around $300, we’re projecting to fall significantly short of our $100,000 sales goal for our first year. Competition in our town has intensified, with four new cafes opening this year alone, displacing neighboring mom-and-pop shops.
Among our pressing expenses, payroll has emerged as a major concern, with costs averaging $2,200 monthly. To manage operations, I took the initiative to hire two part-time employees, as my parents are unable to step in fully—they lack experience with the register and drink preparation, and my attempts to train them have left me frustrated. Their assistance, while well-intentioned, has mostly been limited to opening and closing the cafe.
Amidst growing concerns about our financial future, I’ve been increasingly vocal about my need to find outside employment. With take-home pay barely covering my bills—typically around $150 a week—I’m suffocating under the weight of rising debt that’s threatening to reach $4,000 on my credit card. After expressing my desire to move on, my parents suggested hiring a manager to take my place if I decide to leave. However, the market in our area dictates that competent managers earn around $17 per hour, an expense we simply cannot afford.
So, what advice can I offer my parents in this precarious situation? I find myself torn between loyalty to the family business and the need to secure my financial future. While I understand their perspective, I also need to prioritize my well-being.
In seeking your wisdom, I would appreciate any insights or suggestions. I’ve noticed discussions of similar situations online, and if anyone could point me to those resources, it would be incredibly helpful.
Navigating these uncharted waters is rarely straightforward, but sharing experiences can illuminate the path ahead. Thank you for your support during this challenging time.
1 Comment
bdadmin
It sounds like you’re in a challenging situation, and it’s commendable that you’re considering the well-being of your family while also recognizing the toll that continuing to run this business is taking on you personally. Given the circumstances, it might be best to explore various options before making any final decisions. Here are some insights and practical advice that could aid in your situation:
1. Financial Assessment
Before deciding whether to hire a manager, it’s crucial to conduct a thorough financial analysis of your café. Consider the following steps:
Revenue Trends: Analyze your daily sales over the 11 months. Are there specific times or days when sales peak? Identifying trends could help you refine your inventory and staffing strategies.
Cost Examination: Besides payroll, assess all your expenses. You might find areas where you can make cuts or renegotiate, such as supplier contracts or utility costs.
Break-Even Point: Calculate how much revenue you need to cover all your costs, including salaries, supplies, and rent. Knowing this number will provide a clear target for you and your parents.
2. Potential Alternatives to Hiring a Manager
If the business is not profitable, hiring a store manager might not be the best immediate solution. Instead:
Operational Changes: Consider simplifying operations to reduce the need for additional staffing. This could include fewer hours of operation or streamlining the menu to focus on your best-selling items.
Involve Your Parents More: Since your parents are already invested, finding ways to engage them more might reduce staffing costs. Consider training them in the basics of the operation, emphasizing the vital role they play in supporting the family business.
Temporary Solutions: If you can reduce your hours or bring on employees only during peak times, that may lower payroll expenses.
3. Exploring Marketing Opportunities
With increased competition in your area, marketing becomes crucial. Encourage your parents to consider:
Local Marketing Strategies: Leverage social media, community events, and partnerships with local businesses. Engaging with the community could increase your visibility and draw more customers in.
Loyalty Programs: Introduce a rewards program to encourage repeat customers. This could be as simple as a punch card offering a free drink after a set number of purchases.
Unique Selling Proposition (USP): Determine what sets you apart from others. Is it the quality of your drinks, a cozy ambiance, or something unique to your family recipe? Promoting this can attract a dedicated customer base.
4. Employment Transition Plan
If you feel it’s best for you to step away from the café, work with your parents to create a transition plan:
Job Search: Actively pursue your job interview and apply for other positions. Providing a clear timeline for your departure might also help your parents understand the necessity of making changes.
Communicate Clearly: Have a candid conversation with your parents about your intentions. If you do decide to step back, encourage them to consider alternative management options, such as temporarily promoting an employee or seeking a part-time manager who can work on a flexible schedule.
5. Final Thoughts
It’s important to approach this situation sensitively, especially as it involves family dynamics. Make certain your conversations remain constructive. Ultimately, if you feel that the café is not sustainable and is affecting your financial and mental well-being, it may be time to prioritize your personal future. Bringing someone on board to manage the café can be a big step—and perhaps not a feasible one at this moment. Keep weighing your options carefully, and remember that your well-being comes first. Good luck with your job interview, and remember that taking care of yourself is the first step toward any recovery or new opportunity.