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Fatburger CEO: Why Nobody Wins With $15 Minimum Wage

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Killer_B

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Posted: Nov. 18, 2015 - 10:16 PM ET #51

Quote Originally Posted by wallstreetcappers:

And you wonder why people do not engage with you.

If a business larger than 10 people barely makes enough money to support an owner, then there is something wrong with the business model.

What you are suggesting is the margins for that business would be in the 3-7% range...and that wont work unless you can grow sales and increase profits that way.

There are not many businesses on a small scale that can survive with your scenario because the slightest increase in costs or decrease in sales and you are totally wiped out.

What I said is business 101, I guess if you call that something with regard to lib vs repub then you really should never consider running a business.

Do you think we get to choose the world we live in? I live on the edge of that blade, all that has to happen is a few of the bigger accounts either stop paying or leave and surviving will become difficult. Competition for employees drives wages, I'm living that right now. I have new large companies opening warehouses as well as a major employment center coming next year. This is what should drive wages up, not the incompetent government.

And responding to an earlier comment about paying people below the poverty line, "the government allows it and I'm part of the problem..." I compete with the Office Max's & Staples of the world. They pay minimum wage and only a select few get 29 hours a week due to your DEAR GOV's healthcare plan. I pay $11-$14 an hour and compete with them. Now who's the fkn problem again?

(I refuse to read anymore of Nature's posts, it gives me a headache - I'd like to find a few of his English teachers and punch them in the face...)

wallstreetcappers

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Joined: Feb, 2003

Posts: 58404

Posted: Nov. 18, 2015 - 10:55 PM ET #52

Well you know I speak 100% truth and I am not making anything up. I speak of this because I know of this.

You didnt comment on my thoughts regarding reducing sales to bring in costs..that happens all the time. If your fixed costs are too high relative to sales, then reduce the fixed costs and see what you can do to navigate sales to a point where you increase profitability.

Point being something similar to this..

Say you decide to rent a fresh new warehouse to run the business out of, it makes more sense financially because it is more efficient, lower utilities, closer location, better situation all around. Well what if you are not able to fully utilize the space and that cost ends up being too much that you might need to adjust and scale back? That happens ALL THE TIME.

Evaluate every single fixed cost and see if that percentage of cost of sales is a wise use of money..maybe you have to decide to change the way you do production or maybe you pick a location further away which means a bit more of a commute but you save on costs..or maybe instead of buying a piece of equipment you lease it..or maybe you learn how to repair your own equipment. Maybe you evaluate that your business hours arent needing to be open for 1 hr a day so you reduce 1 hr and that way you cut labor costs. Maybe you find a way to collectively ship things with others in your area to reduce costs.

Sometimes businesses with lousy margins will REDUCE sales to actually increase income...reducing lower margin sales or reduce fixed costs and try to maximize your throughput to increase margins..

Another way to minimize costs is to evaluate each and every product you make or service you offer...evaluate every single margin one every single product or service. Make a decision to eliminate or reduce the lowest margin products/services or if you must increase prices, do it on your worst margin products/services because if you lose sales there it hurts you the least. Find ways to utilize scale to increase margins on your worst products, or bundle and package them with higher margin items to drag those margins up.

Really all I am saying is get creative..and in the end if all this is a no,no,no,no then maybe you arent equipped to run a business if you cant find cheap enough labor to hire away from Staples and maybe you decide instead of a 10 man operation its only a 2 man or 1 man...and you try to pound out a salary doing it yourself.

Blaming the government sure isnt the solution, bemoaning healthcare for your employees and yourself isnt the solution.

As we have seen over time, some products and services are not feasable for the small biz owner, it just isnt possible to do things due to scale issues and fixed costs, let alone whatever labor costs are.

Well you know I speak 100% truth and I am not making anything up. I speak of this because I know of this.

Point being something similar to this..

Sometimes businesses with lousy margins will REDUCE sales to actually increase income...reducing lower margin sales or reduce fixed costs and try to maximize your throughput to increase margins..

Blaming the government sure isnt the solution, bemoaning healthcare for your employees and yourself isnt the solution.

Killer_B

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Posts: 6288

Posted: Nov. 18, 2015 - 11:42 PM ET #53

Wall, my business is successful, we're busy 95% of the year. I hear what you saying about all that evaluation etc. There isn't time in the day to really get that involved with that. I'm in a tight deadline business, I have 6 employees that all have many different responsibilities and are never idle. Not only must I do a lot of production (projects coming in constantly on line that must be done immediately - I try to contain some interruptions of my help or they'd get nothing done), I also have the responsibilities of accountant, banking, personnel, equipment repair and R&D, planning, grabbing the phone, greeting customers in-house or meeting them at their location etc. I'm not complaining, I love the challenge, I have 3 years left on a lease so changing locations isn't an option and my business is exactly where it should be anyway.

I'd need 3 posts to describe all the products we produce, it's impossible to evaluate calculations on every possible variation of each product. It just doesn't work that way. Example: Business cards (sounds simple enough). Do you know how many variables involved with that little 2" x 3.5" card? Try this: quantity, printed one-sided or two-sided, matte paper, color or b/w, raised printing, UV coating, embossing, gold foil, spot colors and don't forget designing the file that prints it (which we also do). Nearly everything falls into this kind of category, they're all custom projects.

I didn't blame the government for my situation, I stated that they set the rules of the game with the Healthcare plan (29 hours or your full-time) which big companies exploit well.

wallstreetcappers

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Posts: 58404

Posted: Nov. 19, 2015 - 1:49 PM ET #54

Well I have to say I understand for sure...of course and running a small shop means you wear every single hat because if not you are trusting people to do things and not knowing what they are doing or if it is done efficiently.

Id have to say the nuances you mentioned are not margin thieves, those variables cant be killers..it can be little cost increases and I guess since I am sure you do heavy volume it can add up.

I'd imagine your killer is keeping equipment up to specs and the cost of repair and maintenance vs a marginal ammt of ink or using a piece of equipment you already have.

Killer_B

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Posted: Nov. 19, 2015 - 7:21 PM ET #55

Speaking of equipment... I've replaced 75% of the equipment I purchased with the business (it should go directly to a museum it was so old). One of the services I perform is laminating things. Business card size to 3 ft. wide. I have 3 laminators, two are giving me problems right now. I called a company yesterday to get them serviced. $250 for the visit and $160 per hour to start. Since it's 2 machines they want $160 for the second machine. If parts are needed, the $250 is in play again for the return visit. I said "I bet you get a lot of business". I'll buy new a new one before I have a $600-$700 machine serviced at that rate... One of them is larger and I'm sure it costs more, haven't had the time to research it yet.

bowlslit

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Posts: 5625

Posted: Nov. 19, 2015 - 9:28 PM ET #56

Wall, I'd hate to see the day when all of those businesses close that you think are spinning their wheels. A lot of jobs lost and payroll taxes lost.

I'm not talking about any businesses that operate with less than 15% margins either. Even a business that operates on 25% margins would struggle with a double in labor costs and quite frankly I'm shocked that you fail to acknowledge.

nature1970

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Posts: 21593

Posted: Nov. 30, 2015 - 12:03 AM ET #57

I run a successful business as well.

I work 6 months a year.

easy algorithm with profit. I get a third labor gets a third and overhead gets a third. I am sure others could find another reach allowing quarters with share holders needed to gain capital for growth to be materialized but where labor is a very participant in profit costs are marginilized.

nature1970

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Posted: Nov. 30, 2015 - 2:45 PM ET #58

Quote Originally Posted by bowlslit:

Wall, I'd hate to see the day when all of those businesses close that you think are spinning their wheels. A lot of jobs lost and payroll taxes lost.

sorry to inform you but labor builds and makes business. if labor views itself a slave to company costs go up. if labor shares in wealth built workers become the best case to advert cost.

f your business is managing labors needs and allowing them to realize a better oppurtuntity for at least their children then your business will indeed flourish ... but as a wisemen said its not enough to monitor where the ship is going a good capt will make sure no one is drilling holes in the boat as it gets there

nature1970

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Posted: Nov. 30, 2015 - 2:55 PM ET #59

but you make a great argument against any small business.

if they can not employ labor above the cost of living and must exist on government entitlements for their workers to eat and be healthy

then they should not be allowed to hire labor to help in their failure.

itsa simple then statement surely even you and b can follow this grammar pal.

Killer_B

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Posted: Nov. 30, 2015 - 11:58 PM ET #60

So Office Max pays the bulk of their people minimum wage and very few make over 29 hours a week (due to the governments involvement with healthcare). I pay my people 3-6 dollars more than the minimum wage and I'm the problem? The town has a low cost of living. Premium gasoline is under $2 a gallon, a nice 2-bedroom apartment is $850. The people I employ own their own homes.

Interesting how you work 6 months a year, I work 12. Shouldn't you be paying higher wages, taking less and working more? That's your logic up until the statement in #57. I get nowhere near a third of the gross. You should write a book (ghostwriter of course).

nature1970

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Posted: Dec. 1, 2015 - 12:23 AM ET #61

Quote Originally Posted by Killer_B:

So Office Max pays the bulk of their people minimum wage and very few make over 29 hours a week (due to the governments involvement with healthcare). I pay my people 3-6 dollars more than the minimum wage and I'm the problem? The town has a low cost of living. Premium gasoline is under $2 a gallon, a nice 2-bedroom apartment is $850. The people I employ own their own homes.

nature1970

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Posted: Dec. 2, 2015 - 2:01 AM ET #62

aint it too bad bow and bee could live forever as well

not ever face reality humans soul is eternal but what we as humans do is temporal

me they claim to be a cockroach a FOOL, I

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