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Old 01-22-2012, 06:29 AM
 
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outside of labor costs.


what kind of startup costs are you looking at, and what kind of monthly monetary commitment is needed?
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Old 01-22-2012, 11:38 AM
 
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Rent, utilities, (electric, gas, trash pick up, water, sewage, telephone) insurance, business taxes, new stock. Then you need to allow for an expected loss from shop lifting, breakage, spoilage, etc.

If you are taking over a store that is already up and running, you may need new shelving, paint, clean up, etc. Do you intend to advertise? Add in cost of newspaper ads, and flyers.

One expense that usually isn't mentioned is that anyone with a "cause" that needs to raise money, will stop by with a plea for a donation. The store owner, in order to encouage customers, will donate. And it adds up to a huge hunk of money.

There is more to salaries than just the paycheck. You have to allow for various additional costs that are required for the employer to pay, such as unemployment insurance. If you don't know what these costs are, learn before you start hiring.

And for every cost that we can name, there will be at least that many that we forgot about.
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Old 01-22-2012, 02:05 PM
 
Location: Metro Detroit, Michigan
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Don't forget to include the expenses associated with mobs of inner city youth ravaging your store and swiping your salted snacks and sugary soft drinks.
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Old 01-22-2012, 03:24 PM
Status: "Enjoying the winter" (set 8 days ago)
 
Location: East of Seattle since 1992, originally from SF Bay Area
33,896 posts, read 61,703,471 times
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It also depends a lot on the area you are in, the rent, utilities and other costs vary greatly. Some cities have very high permit fees for everything
you do, including signs, and some have a "head tax" on employee pay.

Any new business should have cash on hand to pay all expenses including rent and salaries, plus owner personal expenses for at least 6 months before considering opening. That could be $10,000/month, or a total of $60,000.
That is in addition to what it costs for first and last month rent, inventory and fixtures, city permits and fees, cash registers and credit card processing equipment, walk-in refrigerators . . .
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Old 01-22-2012, 04:16 PM
 
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A nice BIG gun...
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Old 01-22-2012, 09:50 PM
 
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Good luck / Bad luck...

The sewer stops up saturday night at 11:00 PM. A plumber at that time could be very expensive. Or maybe it stops up on a weekday at 8:00 AM. Better luck!

Or get robbed, your clerk shot, and store has to be closed for quite awhile.

Electricity goes out for two days and food spoils.

Your walk-in refrigerator (cold case) stops working at 11:00 PM saturday night.

Cash register breaks.

As a rule, all of the above will happen within the same month! Then you might go a year with no major disasters...
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Old 01-22-2012, 11:53 PM
 
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Another thing to consider is the items you sell in your store. Or what you choose to sell in your store, how many of each item, how much space those take up on a shelf, the shelf life, and money invested in that inventory.

Think of each set of stocked items as being their own business. Each has to generate enough income to make a profit for the space it takes up on the shelf and the money invested to purchase the item.

Say you ordered (for your food store) 20 VCR players which could be used in a car. And they cost you $1000.00. And took up 10 feet of shelf space. And you didn't sell a one of them in one year. You get 0% return on that $1000.00. And that shelf space is operating at a loss.

Say instead you used that space for Twinkies, doughnuts, candy, and bread. And it costs you $100.00 to fill that space with those items. 30% markup. And they all sell out within 1 month. After one month you have $130.00! Or 30% return on your money in one month. Not bad!

Or you order 100 gallons of milk. You sell 30, then the rest must be dumped because they are beyond the expiration date. Loss!

Or it is 4th of July weekend, you order the same amount of hotdog buns as normal, they all sell out the 1st day. And you could have sold a whole month's worth in 3 days. The shelf sitting empty is lost potential income. Bad!

And on the buying side, you may get a 25% discount when buying a box of 144 items. But may only sell 5 of those items a month. It might make more financial sense to buy 5 a month and mark the price up.

So keep track of each item, then you can pin-point items which are not "pulling their weight" for the shelf space they take up. Might be better to get rid of those items and replace with something which sells faster or mark the price up higher. (For example a furniture store may have a 400% markup on an item which sits around for 2 years before being sold.)

Here is a peek at mark-up percentages...
http://www.parkpartners.org/2010-Con...ges--Compe.pdf
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Old 01-24-2012, 08:01 PM
 
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I have a friend that bought one for his out of work son to run (autoworker laid off, plant closed). 3 years into it they are looking at other businesses. Margin is too low to make any money. They sell a little of everything including cigarettes, beer/wine, lottery etc. but with "chains" open 24 hours and the economies of scale on their side they are forced into small margins.
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Old 01-25-2012, 04:03 PM
 
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In addition to the above great recommendations, I feel the need to add two:

Liability insurance, in case you have to defend yourself during an attempted robbery.

Life insurance, in case your attempt isnt successful.
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Old 01-25-2012, 04:41 PM
 
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The other thing to look at: how common are convenience stores. If there is one on each of the other corners you might market that is already flooded.
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