LFS and profit margins

zman1

Active Member
Originally Posted by maxalmon
Merriam-Webster Online Dictionary-capitalism
2 entries found for capitalism.
Main Entry: cap·i·tal·ism
Pronunciation: 'ka-p&-t&l-"iz-&m, 'kap-t&l-, British also k&-'pi-t&l-
Function: noun
: an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market.
.
Notice the wordage "private decision" if you don't like the pricing, don't buy it.

I agree.... Same with gas prices and heating oil. If you don't want to pay then walk and get heavier coats.
 

zman1

Active Member
Originally Posted by Darth Tang
Ok let me give some of the people here a COST break down to run a business. This is going to be an estimate only as I don't have my figures I drew up for my customers when the complain about price.
I own a dog & Cat grooming shop. The average groom in my store cost between 35-45 dollars. Lets go with the highest figure of $45.
Keep in mind each groom averages 2 hours.
Ok 45 dollars is my net.
22.50 of that goes to my employee as groomers are paid a 50% commission in this industry.
That leaves me 22.50 to myself as a shop owner.
Take out 2-3 dollars for water and shampoo.
This leaves me with 20 dollars. Facto in electricity on average per dog of about 1 dollar.
This brings it to 19.
Factor in the cost of washing the towels used for the dogs, maybe 50cents per towel in water and laundry detergent cost...
this leaves 18.50.
Factor in the Taxes of my paid in employee that I must match which can be almost 3 dollars
this leaves 15.50
Factor in lease expense per dog of 2 dollars at this point in time.
This leaves me 13.50.
Factor in my own taxes of about 4 dollars.
I am down to 9.50.
factor in advertising cost per dog of about 1 dollar
I am down to 8.50.
I do my own books and taxes so I have no accountant fees other than usual which comes out to about .45 per dog throughout the year.
I am down to 8.05.
factor in repair and maintenance cost per dog on average for the year is about .25 cents.
I am down to 8.60.
Phone bill and internet service (reasearch and advertisem,ent as I own a website) per dog is about 50 cents.
I am down to 7.10
Factor in heat/cooling depending upon the season to maintain the dogs comfort level is about .25 cents per dog.
Down to 6.85.
Factor in cleaning supplies to sterilize equipment and clean up "doggie doo". is about 25 cents per dog.
So in a two hour period per dog as an owner I make 6.60.
This is less than minimum wage per hour.
Now explain to me how I am being greedy by marking up my prices when compared to a few of the shops in town?
Save yourself 3 bucks and make them independent contractors - 1099. Based on your numbers you would do better as an employee some where else.
 

coachklm

Active Member
some...some city's give small business owners advantages...are these factors in your case or not... advertising for new small business is free for first six months.. (in local paper)....many of the thing escp. taxes have a holdoff clause or loopholes for smaller business.s
 

darth tang

Active Member
Originally Posted by zman1
Save yourself 3 bucks and make them independent contractors - 1099. Based on your numbers you would do better as an employee some where else.
In order to be an independant contractor, there is some law that states they can't work in our "office" and they have to supply ALL of their own equipment. That is not the case. No grommer works as an independent contractor in this country.
 

darth tang

Active Member
Originally Posted by schneidts
I mean no offense, but how do you live on that, Darth?
I don't, I have a part-time job at Home Depot and my girlfriend works for the post office./ Once I can get the business established enough to where I have four-6 groomers in here than it will pay off....but right now going into our third year, we are breaking even.
It is an investment right now.
 

phixer

Active Member
$45 to groom a dog actually sounds fair, especially if its a large dog with some serious matting and the cost is due to the labor involved, that’s a lot of labor.
However, why are you paying so much for everything else? because of someone elses capitalism and right to free enterprise? :notsure: For example,
Starting with the second cost. Labor costs are more complicated.
Water and dog shampoo? If each cost was analyzed even further it could be determined what each cost actually represents and whos doing the price gouging.
I’m no expert but by doing a quick google search I found many types of dog shampoo for an average of about 1 dollar per ounce retail. Some were even the foo foo smelly stuff, dogs sniff each others butts? don’t think they care, but the wholesale cost would be even less than this. I used the costly water rate for Arvada Colorado because of this areas tendency for frequent water restrictions, the 2006 rates are:
1 through 30,000 gallons at $4.76 per each one thousand gallons so using ratio and proportion 63 gallons of water would cost appx 30 cents.
If each dog used a conservative estimate of 63 gallons of water and 1 ounce of shampoo this would cost appx $1.30 for water and shampoo to break even. This is only a small portion of the total cost I know, but the principle is the same. As each cost is analyzed its becomes clear that most are inflated and not realistic. Most folks wont do this and they pay up until one day they realize they have to choose between $45 for gasoline or $45 for dog grooming. Ever see what a hospital charges for a wooden tongue depressor or an aspirin tablet? Why is everything getting smaller and costing more? Does a $2.00 ATM charge make sense? Who gets shafted? The same folks who put those crooks there.
Legal robbery IMHO.
 

chipmaker

Active Member
I think in Darths case it would certainly be a better deal to be the actual groomer than the one with the business........So why would one still run a business if the groomers make out better? I'm missing something here.
 

tangwhispr

Member
Originally Posted by Phixer
Where is the common sense here? thats irrational and absurd. I dont know whats worse, being charged $1400 a month for an advertisement or paying it. For that kind of money you could start your own advertising business. Well you know what they say neccesity is the Mother of invention and until it becomes uncomfortable people will keep allowing it. That kind of fleecing is based purely on greed. . :notsure:

This may be true, but if you don't do it your competition will...for my quarter page in Verizon yellow pages I pay about 600 a month...but I get the best placement and more exposure....so I have to do it.
 

tangwhispr

Member
Originally Posted by coachKLM
some...some city's give small business owners advantages...are these factors in your case or not... advertising for new small business is free for first six months.. (in local paper)....many of the thing escp. taxes have a holdoff clause or loopholes for smaller business.s

For large business they give tax abatements, but not for 10 employee shops.
 

tangwhispr

Member
Originally Posted by zman1
Save yourself 3 bucks and make them independent contractors - 1099. Based on your numbers you would do better as an employee some where else.
Then just wait for the Audit....try to cheat and find out...I can't tell you how many local business's I know that have been busted for that.
 

zman1

Active Member
Originally Posted by TangWhispr
Then just wait for the Audit....try to cheat and find out...I can't tell you how many local business's I know that have been busted for that.

My wife has worked for firms as an independent contractor for 16 years and has worked in IL, IN, MN, MO. Any supplies provided you have to charge back to the contractor.
 

darth tang

Active Member
Phixer sounds like a proponent for socialism where everyone makes the same wage and government controls prices. Capitalism works....It may divide rich and poor, but it also divides the hard workers/ intelligent employees or owners from the lazy stupid ones. Case in point, your endeavor to convert your own vehicles to ethanol and make your own ethanol. If the oil market wasn't what it was now, you wouldn't be reasearching and experimenting with this thus furthering yourself. Capitalism at it's finest.
Back to grooming.
A dollar per ounce for shampoo is also very cheap. As is the product. I am sure I could lower my prices and use a sub par shampoo, but then I wouldn't get the same results or I would have to use more of the cheap shampoo which is not cost effective either.
 

tangwhispr

Member
Originally Posted by zman1
My wife has worked for firms as an independent contractor for 16 years and has worked in IL, IN, MN, MO. Any supplies provided you have to charge back to the contractor.
I'm not saying you can't do it, but a business that has no "regular" employees, but lots of "subs" just throws up red flags....just my experience.
 

phixer

Active Member
Darth Im buying stock in Oil and dog shampoo :hilarious thanks for your contribution, now pay me.
 

phixer

Active Member
Originally Posted by Darth Tang
Phixer sounds like a proponent for socialism where everyone makes the same wage and government controls prices. Capitalism works....It may divide rich and poor, but it also divides the hard workers/ intelligent employees or owners from the lazy stupid ones. Case in point, your endeavor to convert your own vehicles to ethanol and make your own ethanol. If the oil market wasn't what it was now, you wouldn't be reasearching and experimenting with this thus furthering yourself. Capitalism at it's finest.
Back to grooming.
A dollar per ounce for shampoo is also very cheap. As is the product. I am sure I could lower my prices and use a sub par shampoo, but then I wouldn't get the same results or I would have to use more of the cheap shampoo which is not cost effective either.
Cmon Darth stop making excuses, so you think that people that are poor dont work hard? do you actually believe that nonsense. Think about what your saying, everyone works hard. There is no logical reason why dog shampoo has to cost a dollar an ounce or gasoline has to cost $3.50 a gallon. :hilarious Im buying stock in Oil and dog shampoo :hilarious thanks for your contribution, now pay me.
 

phixer

Active Member
Darth Tang said:
Phixer sounds like a proponent for socialism where everyone makes the same wage and government controls prices. Capitalism works....It may divide rich and poor, but it also divides the hard workers/ intelligent employees or owners from the lazy stupid ones. Case in point, your endeavor to convert your own vehicles to ethanol and make your own ethanol. If the oil market wasn't what it was now, you wouldn't be reasearching and experimenting with this thus furthering yourself. Capitalism at it's finest.
:hilarious Still bitter about the ethanol thread huh Darth. :hilarious
Thats funny, socialism is exactly what your defending and dont even know it. But since you mentioned ethanol as an example heres why.
Alternative energy resources like ethanol are a small example of innovation which flourishes in a democracy. You see Darth in a in a socialist republic folks just accecpt the norm because they are paralyzed to change it while those at the top get richer (does this sound familliar) its easier to accept it and to just pay up until one day you realize how the system really works. Very few of those in power are there because of capitalism allowed it. Conversly it makes no sense to reward medocricy either. :hilarious (sounds like the Matrix sorry) :hilarious The socialists are the ones who inhibit innovation.
Countries like China are good at this, they can beat the rest of the world when it comes to reverse engineering and mass production. But they supress the creativity and innovation that thrives in a democracy. Some would rather accept the norm than create something better? Where do you think ideas like ethanol come from? now does that sound like a proponent of socialism or capitalism at its finest, confused as to how you phrased it?
Now instead of slinging mud back and forth, lets hear some new ideas on how to save a buck without the nonsense of why we should keep our mouths shut and continue to accept being treaded upon. Everyone knows that dog shampoo inst worth a dollar an ounce, if you dont then maybe some research is in order. I guess my priorities are mixed up, every dog Ive had has lived a long and happy life without 10 dollar a bottle shampoo, maybe if the shampoo smelled like another dogs *ss the dog would feel justified in me using it. :hilarious
Check out how much the CEO of EXXON made last year after taxes, while most school teachers scrape by many like him enjoy the benefits of "capitalism at its finest" because that type of stagnant thinking + $3.50 a gallon put him there.
Back on Earth which one is more is important to you? or is this just another example of capitalism at its finest.
Its better to look for solutions. Do you actually feel that poor people divided by greed masked as "capitalism" are unintelligent , lazy or stupid? there is a good portion that are neither. Think about it...
"Capitalism works....It may divide rich and poor, but it also divides the hard workers/ intelligent employees or owners from the lazy stupid ones."
So does privledge, arrogance, and ignorance which catagory are you in? hard work seperates the deserving but greed in the form of the example mentioned hinders hard workers, another example..... if your so smart why arent you rich?
Almost everyone works hard. While the rich send there kids to Harvard the poor send their kids to protect freedom so the rich can get richer in the name of capitalism. Now does this sound justifyable if you call it capitalism.
To bring this back on topic. There is no logical reason why dog shampoo has to cost a dollar an ounce or gasoline has to cost $3.50 a gallon. If you really belive this then I'll buy more stock in Oil and dog shampoo :hilarious thanks for your contribution

Having had to defend capitalism on foreign soil before is an awakening experience?
Most small LFS and small businesses struggle because of the ridiculous overhead, innovation and creativity is the answer. Its slow sometimes but we can still do better than this.
 

darth tang

Active Member
You complain about CEO's in the private sector making millions and in the same hand comnplain about teachers making squat in the public sector.
Teacher sallaries are a government controlled wage (an example of socialism). The CEo's salary are the example of capitalism.
Which makes more money?
Very few of those in power are there because of capitalism allowed it.
At soime point in history, someone in the rich guys family made a lot of money in the capitalistic system. And it continues to payoff for the family. So it works and is a great thing. Let me ask you this. If you made a million dollar corporation.....are you NOT going to give your kids everything and every opportunity available? You are faultinmg the system because people work it for the future. That is how it is designed.
I am building a business now. Am I going to reap the full benefits from it. Probably not, But my kids will and their kids will and maybe in the future we will be a national chain. Will you hate my grandchild for being the CEO of the corporation I started as one shop in the years ahead, just because my grandchild was given a job with a good paying salary because of my hard work for the future?
That is essentially what you are doing now. You hate the system because you see people who's ancestors actually used it to full benefits and are now reaping the hard work of the family. Soprry capitalism works. Because of rising costs it causes innovations as well.
They ONLY reason China has innovations is because they market to capitalistic countries that ALWAYS want something new. How much of their own products are sold in country versus exported? How many of the corporations in China are actually American owned that create the mass production line and innovations? Think about it.
Give me an example of an invention or innovation that came from socialistic USSR that wasn't military in use. For everyone 1 you list, I can list 100 that came out of our capitalistic system.
I suppose I could save money by actually MAKING the shampoo. But the time that would go into this would not, ultimately be cost effective for me.
 
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