Saturday, January 31, 2009

Retail Sales and living expenses

So I was curious about things tonight. I should never get curious. On nights like tonight its bound to affect my sense of self. But I do. I digress.

I went looking at the cost of retail shops. Average cost around Suffolk, Va $14 a square foot, per year - at least so far as I can tell that's what it was looking like - and we're looking at 500sq foot space (which, by the way, doesn't exist in Suffolk, they start at 1200 sq ft, but I digress again). Doesn't sound too bad does it?

That's only 21k a year in rent. Which works out to $1750 a month. Add in half that amount again to cover electricity, gas, property taxes and such, and we're at $2625 a month.

Factor in a good salary, for both of us, say... $20 an hour = $40 per hour x 48 hours a week x 4 weeks per month = $7680

Decent pay for the hired help (I refuse to pay anyone the laughable minimum wage) = $8.00 an hour x 20 hours per week x 4 weeks = $640

Right there we're at a monthly expense of $10,945

Making approximately $6.60 per item (average of all items across the board deducting for supply costs - this is a fairly high estimate)....

that means we'd need to sell a minimum of 1659 items, just to make ends meet.

This of course, does not include annual tax fees, business licensing fees, inspections, permits, advertising, signage, store appliances, storage, shelving, displays, or anything of the sort. We're talking ballpark figures though... so lets say that adds another... oh... $1000 a month..its a nice round number.

To cover those miscellaneous things, we'd need to sell another 152 items per month.

So we're up to 1811 items per month...

and we haven't even covered profit for expansion or whatever else companies use profit for... (what do companies use profit for besides company expansion... lol)

So lets say... we want to make... oh... $500 a month in profit to reinvest in the business...its another nice round number.

that's another 76 items.

1887 items per month. 63 items per day.

This is how much we'd have to sell to make our little "at home" business into a profitable venture that would allow for expansion.

at 126 items per day, we could officially hire people to work in the store, leaving us to creating things and cutting back our hours to something resembling "normal" working hours.

Fun huh?


Anna said...

Sounds like you guys should think about expanding!

Heathen's Hearth said...

Haha. We're no where near that yet. We definately need to work on advertising and marketing some more this year.

once we get to a point where we're selling at least 120 items a day consistently, then we can think about opening up a shop :)