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Five years ago, we have decided to put up a small food cart business. We were just trying it out with our extra money from our monthly salary from our full time jobs. Little did we know, its not that simple to run a business no matter how big or small it is.
What a simple food cart business from the product of our experimentation and gamble turned out to be a stable cash cow that provides us monthly income.
But before we get to this stage, we encountered lots of challenges and problems any small neighborhood business owner could ever imagine.
Here’s our story.
Since we (the owners) have full time jobs, our business is looked after our employee on a daily basis. My husband visits our store to collect the cash sales from our employee. This way, we avoid large sum of cash left in our store’s safety deposit box. It also discouraged theft from our employee.
We collect the cash three to four times a week. The reason why is because there are cash outflows or expenses that needs to be paid on a daily basis so an extra cash is needed. These expenses are directly attributable to store expenses such as buying cooking oil, onions, paper plates and others. These materials are important in the production of our product which can be bought in the nearby wet market.
The problem that we encountered here is the task requires too much effort and consistency to implement. We didn’t have any solution because we just considered this as a challenge since this is part of having a business. If we’re not going to do this, there will be a higher probability or chance of employee theft.
We thought of asking our employee to just deposit the sales every other day during weekday but due to the unpredictable volume of customers daily, our employee can’t cater this task. Aside from that, she will be forced to close our store for about an hour or two just to go to the bank and deposit the cash sales.
So we ended up sticking to our old routine which is we need to collect the cash personally.
Low on Sales
Since our small food cart business is new, the neighborhood and the customers are quite hesitant to buy food from our business. This leads to low on sales which hurts our financial statements.
Our product as I have mentioned in our previous article about setting it all up, we do have a very small store looked after by one employee only. We didn’t have any marketing strategy in place. So we technically expected a low in sales at the beginning.
So what did we do? We know that every business is bound to be successful or fail. So we gambled. We decided to just let our business run its own course. We believed that after several months, sales will pick up and we will reach our daily quota.
Luckily, after 4 to 5 months of hard work. It pays off!
This is the worst thing you could experience as a business owner. Knowing that your employee is stealing from you is heart-breaking. By trusting your employee with your business is a big gamble.
If you’re not a hands on business owner, this is he most common problem you’ll encounter. Since your employee have the freedom and access to daily sales, he or she will be tempted to steal money from you.
We experienced this kind of trouble. Our employee remits the cash sales every night to husband every time she goes home. So she has access to the daily sales. Since we don’t have a cashier, she can intentionally understate the sales without us noticing.
The only way we can think of is can install a CCTV Camera and monitor the sales daily. We can counter check the sales sheet and compare it to the number of customers who bought our products.
A CCTV Camera cost a minimum of P3,000 which we can afford easily. Though we have the enough cash to fund this asset, we can still trust our employee.
But things got worse, we noticed that inventories are running out and the sales are still low. These are two are correlated with each other. If Inventories are getting low, that means there are sales transactions happening.
We conclude that there are possible employee theft happening.
So how do we handled this? First, we fired the employee. We realized that you can’t trust your business to a thief. That’s the only solution that we come up with.
Moving forward, to make sure that this wont happen again, we decided to religiously count the inventories. That way, we can see if there’s a missing inventory.
Yes, even though we’re just a small food cart business run by two people. We still encounter this. Our previous primary employee used to take a day off every once in a while. Though there are time that her leaves are innocent in nature such as taking the day off due to sickness, important family matters to attend to or emergencies. There are still a lot of times that she will just inform us that she’ll not going to open the store because she has to do something important.
As for the reasons, she tried to fool us with different petty excuses though we really know she’s lying to us.
That’s a huge problem. Because we only have one person to look after our store and having an employee who’s adept with that kind of practice. Our income was greatly affected because majority of the times, our store is closed.
To be honest, we didn’t find any good solution to this challenge. Having an employee attendance policy even we implement it consistently and strictly. What can we do? We as the owners have full time jobs and we can’t do anything if we received a text message from our employee that she’s not going to work. We can’t argue with her also because “what if” the reason for her absence is really true? Will we deprive her of that?
We also implemented a perfect attendance monetary reward. Where in if she has a perfect attendance for a month, she will a certain amount added to her salary.
The monetary incentive for a perfect attendance didn’t work also. Because, first, she just ignored it. I think she thought that it is better for her to be absent for whatever reason she have that receive the monetary reward. Second, it will hurt our net income since its additional cost.
We also talked to her if she has a problem with her schedule. Unfortunately, YES. The thing is, she is a mother of two young child. There are times that her infant child doesn’t have someone to look after them. So she have no choice but to ask for unscheduled leave.
So what do we do? we just fired her. It’s a tough decision but we must do this. We’ll be doomed if we did passed this judgement. Our beloved store will be up in flames in a matter of weeks.
Employee’s Back Up During Leave
To be able to run our small food cart store, one (1) employee is required to look after it. If we employ two people to look after our store, both employee wont utilize the eight (8) hour shift. So we decided to hire one employee.
During leaves, unscheduled or not, the major problem and challenge that we’re facing is our store will be close because we don’t have a back up to look after our store.
We tried to look for someone who will do part time to be our employee whenever our one and only employee is on leave but we can’t find one. No one is willing to do a part time job and on call.
Our initial plan was to hire someone who’s on-call whenever our employee notifies us that she won’t be able to make it today. But then again, we didn’t find someone who’s willing to do it.
If you’re running a small business, try to formulate a back up plan whenever your employees will be on leave. This is the major challenge that affected us, directed to our monthly net income.
Since I’ve mentioned this challenge, I hope you have an idea already. If you’re going to open a one employee store, ask yourself, who’s going to look after your store if your employee will be absent on a certain day? Will you do it? If not, who’s the best candidate? If you found one, will he or she (the temporary employee) be willing to do it several times in a month?
Out of Stock Inventories
Our main product is the Sisig and part of our Franchise agreement with our franchisor, the supplies of raw sisig will be purchased from them. The purchase order will be done by notifying their “Order Department” the quantity (in kilos) of our planned order of sisig. They will sent an invoice and the payment will be done by depositing the invoice amount to their bank account. Our order will be in queue and will be delivered after seven (7) working days.
Please take note that I facilitate the ordering of inventories from our supplier.
In the ordering process mentioned, the only trigger from me to do the purchase order is when my employee informs me that our stocks are low. We usually order twenty (20) kilos of sisig which usually last for two weeks or ten days.
I specifically asks my employee to inform me whenever our stocks are low or sometimes we have ten (10) kilos of sisig left. Since I already assumed that we can consume 1 kilo per day, we still have a three day leeway before our stocks will run out.
The challenge we encountered here is whenever our employee forgets to inform me that our stocks our low, the leeway will be short and there are times that we can’t serve sisig because we’re out of stocks.
We can’t just ignore this issue because it happened many times. So to address this problem, I closely monitor the stocks every three to four days. Just to make sure that every item in the inventory has an enough stock so we won’t be experiencing out of stocks again.
Note that if you can’t serve your customers, this will negatively affect your sales as well as the customer’s experience with your store. So my advice to you is make sure that you have enough stocks. It’s better to have plenty of your inventory stored instead of customers going away because you can’t serve anything from them.
Supplier’s Delayed Delivery
Even if you order on time and accounted for the queue and the delivery time, there are still times that you will experience a delay on the delivery of your ordered inventories.
That is a pain in the ass, to be honest. What will happen to you if you don’t have anything left in your store and the delivery of your inventory was delayed? You can’t just open a store where you can’t serve anything from the customer. The best thing to do is close your store temporarily.
This happened to us, because we can’t serve Sisig for the day and its our main product, we decided to close shop for the day.
The simple solution to this is just like what I have discussed above, monitor your stock frequently. Make sure to account the delivery time, fortuitous events an other unexpected event that might happen. Fortuitous events that will likely to happen such as storms, flood, transport strike and others. While the other unexpected events may include, no available delivery trucks, no available supplies of the inventory, unavailable delivery men and others.
You need to account these type of events.
My advice is make sure when ordering inventories, make sure to account the delivery time and add at least 24 to 48 hours to it. That way, you’ll manage your expectation and your inventories will arrive much earlier that it should suppose to.