Carl Cooper, 26, owns his own business – Car Smart UK in Canterbury, and had what must have seemed at the time to be a very bright idea.
It’s a real problem for a small business. You got a good idea, there’s a demand for it, you put in a lot of hours building up your business, but there are only so many hours in the day, you cannot be two places at once, you can’t talk on the phone to two different car dealerships simultaneously, you need more people. But the moment you bring new people in, the whole situation changes.
One big problem which does not occur to many people in Carl Cooper’s situation: you can be very good at running your own business but an absolutely terrible manager. But the cashflow problem is something you just can’t ignore.
Even if you just pay your new employee minimum wage, they’ve got to bring the company – that is, you! – a minimum of £4000 each quarter (allowing for 25% over the cost of their wages) just to break even. The chances are that even if you advertise for someone who can “hit the ground running”, an employee’s first few weeks will not be their most productive – they’re learning the job, learning what you expect of them. But you still need to pay them. Then if they’re telesales workers, you’ve got to rent more office space, buy the desks, get phones and phone lines and computers and all – huge expense, and their wages are really just the last straw, because you’ve got to pay them that whether they’re any good or not….
Imagine a little light-bulb coming on over Carl Cooper’s head. Continue reading →