Runway

If you have a Small Business Administration loan of $60,000 and commercial rent of $800/month and you are paying yourself a salary out of that loan, plus hourly employees and other business expenses, you probably have less than a year to ramp up to sufficient earned income.

That's not as much time as it may sound like. If it's a food business starting from scratch, the failure rate is extremely high. A search for new restaurant failure rate gets me conflicting figures, including figures that don't seem to match such as in this article which starts with the following line:

Only 15% of new restaurants survive their first year, and 43% close within three years. 

Some of the figures in that article are for new chains and I guess others are for new individual restaurants. Maybe that helps explain why their math ain't mathing for me.

Profit margins for food businesses of all kinds are extremely low. One UK piece I read years ago indicated that upgrading to more energy efficient lightbulbs could be the difference between profitable and losing money for a restaurant.

I give away half-baked ideas for food businesses and permission for anyone to take my initial research and finish fleshing it out because I would like to live in a world where it's easier to get healthy food that's affordable and convenient for ME and this is just a challenging space in which to succeed.

There's eight pieces on Eclogiselle marked Food.Business and Nutrient Dense has a piece about Meal Kits that suggests part of why major meal kit companies lose around 90 percent of their customers per year is because many of them try to get you in the door with a steeply discounted initial offer which makes eating so cheap they are probably helping people eat who might otherwise apply for food stamps. 

Guess what? Those people are extremely unlikely to continue their subscription after the initial steep discount runs out. They took it to avoid starvation.

Competing primarily on price is always a weak business position. You may THINK Walmart is competing primarily on price and you are wrong.

Walmart is competing on being your one-stop everything mart and that's their primary value position. Go to Walmart and get everything you need in one stop.

Then volume discounts or whatever help keep prices low. And they aggressively promote their low prices probably because they know mom and pop shops who try to compete on price with them will NOT make it.

So if you are a small fish and you buy their marketing angle and imagine that's why people shop there, you have no hope of competing with them. You are likely to cut your own throat and they don't have to do anything about you.

People will pay more for X if it costs them less or adds more value. If they have to drive cross town to save a dollar on a hot food item, the travel time is a burden and there are travel expenses -- whether gas and maintenance or bus fare -- and the quality of the item may be worse. 

If it's adequate quality and it's convenient for them, price sensitivity is not what people often imagine it is. Paying an extra dollar for the coffee or soup or whatever and saving more than a dollar on travel expenses may be the cheaper option.

Walmart doesn't need to aggressively market the one-stop everything mart angle. That part goes without saying.

It's encoded in the name of their main brand: Walmart Supercenter. Everyone knows what that means. It's a big store with all kinds of basics reliably available.

Some rules of thumb:

1. As an independent freelancer, you should be charging twice as much per hour as the hourly wage you would get for a job for this kind of work because you need to provide your own benefits.

2. For every hour of paid work, you can assume there's an hour of unpaid work involved in running a business.

If you cannot make at least four times the minimum wage per hour for your business, go get a minimum wage job with benefits if the primary goal is making money. You will be better off.

A lot of freelancers and the like are people who are retired and have some income and benefits that way or they have a spouse providing things like medical coverage through their job. Those people are often getting business at all because they are charging a pittance and may not be worth more than that, so couldn't make it if they tried to charge more.

Getting some portion of the business assets necessary to succeed for "free" is a common way businesses make it at all, often even big businesses who spend insane amounts on politics because government frequently wants big business to succeed because they provide jobs.

Door Dash and Uber and similar expect the driver to already own a car so they don't have to pay for it and it's an ongoing battle between the company, the drivers and the customers exactly how to divide up who gets how much value out of this arrangement.

I personally am okay with such services existing, but I desperately wish the companies in question would pull their heads out their butts and figure out how to adequately compensate their workers because otherwise it's not sustainable. If you first kill off all taxis and then run your business into the ground and go bankrupt, well, that's a net loss for society.

We have a top heavy economy globally and currently working part-time for a large company doing gig work -- where you get paid by each gig you do -- is the best way for a lot of people to have earned income on terms that work for them. I'm fine with that IF and ONLY IF they aren't being shafted by the company.

Within certain parameters, I'm okay with it sometimes paying less than minimum wage at times. I did freelance writing on a gig work basis while homeless and too sick to work a regular job and if it took me four hours to make $5, that's $5 I wouldn't have otherwise HAD.

I'm okay with setting parameters where the workers need to get up to speed to make it something that can support them -- if it's possible to get up to speed. I'm not okay with parameters where it's not feasible to make this an adequate income no matter what you do.

How you achieve that, I don't know. There are all kinds of challenges in appropriately pricing things where it makes sense for all concerned parties.

But if you are making business plans where the goal is kill the taxi business and then jack up prices, you aren't really a business person. You're more like a robber baron.

We have too much of that in the world today where private equity and the like isn't interested in creating a sustainable business that will reliably supply goods and services in the future. They are just interested in carving up what someone else built and running off with the profits.

That's a problem because you can't eat dollar bills and coins. The more of this society tolerates, the less real wealth in the form of goods and services exists at all.