FOUR YEARS AGO Robert Williams, now 33, made the transition from receiving a monthly pay cheque to managing his own business. His new business was a distributorship:
"Working as a salesman, I was kind of close to the field. You can't be 100 per cent sure that something will work, but I started it while working and I felt confident. The distribution companies were feeling the effects of liberalisation. My earning power in sales was getting less, so I had to move on," he said.
Originally involved in the distribution of snacks, he has now gone into wholesale groceries.
His main challenges have been in finding "responsible and honest people", debt collection, dealing with competition, the stress involved in running the business and the cost of credit. "It is hard to find money for expansion."
Most difficult is the daily double and triple-checking of staff activities.
"You talk to staff one million times, meet them and if you are not behind them all the time the same problems recur. I pay my workers better than some of the larger supermarkets. It is more than I can really afford.
"Keeping track of the stock is a problem and another issue is the way they (employees) treat customers. At times, I have to be double-checking invoices or else goods go back on the trucks. At the end of the day sales are affected by the fairly low level of reliability," he said.
Mr. Williams has resorted to micro-management, bearing the burden of many management functions on his two shoulders -- including some acounting, marketing, sales and administration.
"I have to spend too much time watching workers," he said.
There is another major challenge -- increasing competition. "The grocery business has boomed, everyone is in it now, because it is generally felt food is the easiest thing to sell. The Chinese have formed conglomerates and are selling very cheaply. Many times, it is better to buy from the Chinese than to buy from distributors. The products in which you can invest less than $1 million has attracted many people," he said.
A pitfall to be avoided when trying to make a profit, he suggested, is selling by credit.
"It can create a real problem. You do it without demanding collateral, crediting between $2,000 and $20,000 worth of groceries and expecting to collect it next week.
"Then things suddenly go bad and you cannot get it. Or, it is paid back in such small amounts that you do not see it. At one point, I had over half million dollars on the road in credit. I was giving goods to people I knew and who I felt would honour their word. In the end, the whole economy got bad and even my creditors were affected. If I am not paid, I cannot pay my creditors," Mr. Williams said.
Was his transition worth it?:
"Yes. There is the satisfaction of being your own boss and the satisfaction of trying to build something, but when you are your own boss, you are not sure of your salary. You are not sure you will have money to cover your expenses at the end of the momth.
"When you have made a budget and business fluctuates, you are the one who feels the pinch. As an businessman, you borrow and might not be able to pay it back. In a lot of small businesses, the debt is more than the assets. Stock and fixtures are worth less than what they owe," he said.
