Turnover/Pay %?

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Turnover/Pay %?
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Downsizer Forum Index -> Small Business Questions, Ideas and Advice

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Nick

Joined: 02 Nov 2004
Posts: 34535
Location: Hereford

Posted: Fri Jul 22, 11 2:01 pm Post subject:
It's not a private argument, no, but as with most potentially contentious threads across the internet, it ends up with about three entrenched views, so it may seem like that. New opinions are welcome!

Mrs R

Joined: 15 Aug 2008
Posts: 7202

Posted: Sat Jul 23, 11 7:59 am Post subject:

Mistress Rose wrote:

Is this a private arguement or can anyone join in?

There are some industries, particularly farming, and in our case woodland work, where prices are low and are dictated by how much the next person up the chain will pay. In our case this is spar gads for turning into thatching spars and hazel rods for hurdles. Similarly, unless you sell direct to the customer, milk and meat.

While people aren't willing to pay over the odds for those things, if we stopped producing them in this country, it would be a poorer place and those that pay their taxes would end up paying for the farmers/woodland workers on the dole.

If you diversify by selling direct, making something with your produce, opening a farm shop etc. you can make more money, but you have to invest more in capital, running costs and time. It depends on what you can manage. I always regard Tiptree as jam makers, not farmers, and I rather suspect jam has been their main industry for many years now.

ahoy, another rose

I think selling direct only 'shields' you up to a point - there's only so much people will pay, and more and more competition all the time. Making your living solely from meat/milk/any other raw product you care to mention is still extremely difficult if not impossible! If we were solely to rely on meat sales here, we'd need quadruple the land we have, and that includes what we rent too! And I think we've cut costs about as far as it's possible to.

Mistress Rose

Joined: 21 Jul 2011
Posts: 15603

Posted: Sun Jul 24, 11 6:04 am Post subject:
Agree there. I think the only way to make a reasonable return is to put added value into your product, but as I said, that needs more time and money. If you live somewhere this is practical and you can afford it, fine, but if your area is saturated with farm shops, or you are well off the beaten track this is not really the answer.

Mrs R

Joined: 15 Aug 2008
Posts: 7202

Posted: Sun Jul 24, 11 8:11 am Post subject:
adding value is certainly the way to do it, but then, you do end up as a jam factory rather than a fruit farmer...things will have to change one day, as we're stuffed if we get rid of all farmers!

Mistress Rose

Joined: 21 Jul 2011
Posts: 15603

Posted: Tue Jul 26, 11 9:01 am Post subject:
Agree totally with that. Perhaps the right balance is to have a small 'added value' line that will help to increase the profits, but everyone has to decide for themselves exactly how they want to play it.

arvo

Joined: 04 Dec 2006
Posts: 3321
Location: Somerset

Posted: Tue Jul 26, 11 9:12 am Post subject:
There is still the 'human nature' tendency to undercharge though. In the market Chez took on her first customer told her in no uncertain terms what had been being charged on previous weeks. (A sum that wouldn't cover most peoples costs. Oddly the previous incumbent is giving it up.) C stuck to her guns and charged what she charges everywhere else.

jema
Downsizer Moderator

Joined: 28 Oct 2004
Posts: 28120
Location: escaped from Swindon

Posted: Tue Jul 26, 11 12:12 pm Post subject:

I think you have to have a very firm rule in business that unless there is a really good "foot in the door" argument, then no way no how do you take on work at anything other than a very acceptable margin.

If you take on work on an "it's better than nothing approach" then you set that as the going rate for the job and undermine everyone in your industry.

Much better to turn down work, and have the time to look for decent paid contracts, that to turn you and everyone else into slaves. Better to get a job picking potatoes or whatever to survive.

Mrs R

Joined: 15 Aug 2008
Posts: 7202

Posted: Tue Jul 26, 11 1:58 pm Post subject:
I disagree, I'm much happier doing the job I love for a pittance than earning a perhaps slightly better pittance picking spuds, I don't want to 'survive' all my life, I want to enjoy it, and I'm sure that goes for a lot of others doing what they love too - craft based businesses for a start.

Mistress Rose

Joined: 21 Jul 2011
Posts: 15603

Posted: Wed Jul 27, 11 8:48 am Post subject:

You have to live how you want, and there are things where there is a limit to what you can charge.

We have had a number of people suck their breath in at our having to increase our firewood prices this year, but our expenses have gone up, so they will have to pay that. Having said that, there are others who sell their firewood cheaper, but I am not sure if they have insurance, and most do not do it as a full time job.

Trouble is, once you have set a benchmark price, as posted, that is what you have to work around. There are also people doing various things as a hobby, and without meaning to get at anyone, if they undercharge, they make professionals look expensive.

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