Who’d Work for Below the Minimum Wage?

Barefoot,

My husband owns a small CBD café which he purchased two years ago. After a lot of hard work, it nearly pays him a minimum hourly wage, while employing four staff. I am concerned he is in a vulnerable position if there is a recession. Do you have any general advice for small business owners to help futureproof themselves? The business lease is up for renewal in two years, and any advice on negotiating terms based on the potential economic climate would be appreciated.

Donna

Hi Donna,

The best way a small business owner can be ‘futureproof’ is by not owning a dud business. And judging by your brief description, that’s what your husband owns.

Let me put it this way: do you think he could employ a manager to work around the clock, have the responsibility of paying staff, suppliers and the landlord -- and pay them below the minimum wage, with no holidays? Of course not. It’s against the law!

What I’d do is this. I’d sit down with your hubby and help him set a goal. Work out what the business needs to do to generate him a decent wage -- one that will compensate him for all the work and stress, and will earn him a decent return on his invested capital. Give him 12 months (or at a stretch two years, when the lease expires) to reach this goal. If he can’t, encourage him to sell the business -- and get a job in a bottleshop. At least he could enjoy a stress-free stubby after knock-off!

Scott