LFS and profit margins

[emmitt]

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?
What are you doing as owner on a daily basis? do you groom as well? If you do, then you are making an extra 22.50 per dog.

 

[phixer]

Well thats 10 minutes of my life I'll never get back.

I think you missed the point my friend, countries like China suppress innovation because of socialism. So if Im a proponent of socialism then how can I encourage innovation? ...nevermind
Making your own product. Now your talking, yes you probably could make the shampoo, Im sure you already know how and might be capable of producing a product superior to what can be purchased commercially. Thats innovation

thats how it starts..... but do you think that the big corporations support your right to capitalism when it means competetion? your right to innovate or create? Of course not they dont want you infringing on their market share. Thats one reason why there are so many anti trust lawsuits against the big corps. Now do you see what Im saying? By creating competition you are weakening their strong hold and their ability to monopolize the market. How do you think the leading MFG of shampoo will feel if you begin to shift his market share with a better product? Do you believe now he is thinking like a capitalist when he tries to put you out of business by anyway possible. These robbers become gigantic, they own insurance, petroleum, steel, water, electricity and eventually will find a way to make you pay for every aspect of your life. At this point you are no longer free and my point is that these greedy corporatate robber barrons have no interest in your right to capitalism or freedom, they want to control every aspect of your life, like they are doing now with Oil and gas and electricity and medicine and insurance etc...
I wish you the best, Im sure you see how this type of thinking is bolstering the accounts of the weathy who seek to control the people even more. They dont want your fingers in their pie. If you get a chance do a little research on the history of the 16th ammendment and facism.
Socialist inventions hmm :notsure: How about the egg roll and perogi

if propelled at a high enough velocity a hot perogi might have a military application.
:hilarious

 

[jovial]

Phixer your wasting your time trying to explain economics to him, he dosent get it and probably never will.

 

[darth tang]

Originally Posted by Jovial
Phixer your wasting your time trying to explain economics to him, he dosent get it and probably never will.

I understand economics just fine. I just misunderstood what Phixer was originally getting at. I got it now. Probably misunderstood because Phixer and I were mixing three separate topics in our posts...lol
Phixer I can agree with you for the most part.....Where we beg to differ is to blame the corporations solely and paint them as the bad guy. If I could charge 200 dollars for my services because I was the only one around and people would pay it, believe me I would.....
In answer to the previous question about myself grooming, occasionally I do....when we are really busy. If I started grooming all the time at this point I would be shorting my employee and ultimately make them mad as they would not be getting a full day's work and then quit. AND GOOD GROOMERS ARE HARD TO FIND!
So I look out for my employees wel being as well.....because a company is ultimately defined by it's employees.

 

[phixer]

What if you controlled a product that you knew people needed to live like oil or a service like health care or insurance, would you take away someones last dime if you didnt need it because it was legal?
What it boils down too is a moral choice that some in this country will never understand, a choice that could be answered by one question.
Would you still help somebody else if you had the means and didnt stand to gain from it?

 

[reef diver]

In short for you who started this thread, think carefully before you judge a small buisness, (dont start your own!) And most importantly support your LFS! I have my own poitn to make. Many people think the restaurant and food buisness is easy, because they go into a restaurant, and see nice furnishings, and a place that is run nicely. Also people walk into a restaurant on christmas, and say to themselves "Wow, this place is busy! MAybe I should do this, the owners have to be loaded!" However, regardless of where you live(except big cities, those are the exception to this restaurant theory) there is always a huge off season, where you have 5 tables of 2 people in a night walk in. These suck up thew profits, and are the reason why many small restaurants run by people who think it is a money making buisiness, go out of buisness. When you walk into a restaurant, dont look on the surface look deeper, to where the true trouble lies, look into the wait stations, and see the panic on busy nights, befriend an owner, and you'll see whatit is really like. It is hard to own your own buisness. Please don't criticize me on this, I really know what I am talking about, my dad has owned and run restaurants for 30 years, 14 of which I have lived. To support the notion that people will do a buisiness that makes little money, my dad gets home at 11:00 most nights, 5 nights a week, and he does this buisness because he loves it. Please don't feel sorry for him or my family we like the buisnes too, it has a strange essence about it that is likeable. Just understand what I am saying by this. I am using this an example because it is something i am very familiar with.

 

[reef diver]

If you made a million dollar corporation.....are you NOT going to give your kids everything and every opportunity available?
Very good point however, people that made million/billion dollar corporations have given their kids an interesting. For example Bill Gates in his will at the current time has left a grand total of 1% of his total lifetime savings to them for their entire lifetime, I belive there are two kids, mabey more. The rest goes to charity. He did not even leave them with his buisness. He wants them to make their money on their own, not be lazy *ss sobs who lay around and do nothing, those hard worksers, are the people we need today, who have thir parents legacy to live up to. YEs you are right, and I found an interesting article on MSN about this that you may want to read. I am not trying to be condecending to anyone I am only stating my opoinion. Also capitalism does separate the smart from the lasy people, however, it does not guarantee eithers success. Remember Phixer, remember humanities past, has capitalism, or socialism worked in the past? NO it has not. It is a good Idea in thory, but when applied to real life, it doesnot work at all, because We a humans' want, always want a better life for ourselves, and our own. Ethanol to make my point on this, is a horrible innovation, it may solve our gas problems, but it is worthless, for large use, as it will cut down our food supply, the whole american corn industry would have to be utilized completely for any widely available ethanol. Also, remember we have a serious environmental problem, which ethanol does nothing for.

 

[moby]

Winston Churchill made an interesting point once.
"Democracy is a lousy form of government, but it is better than all the others."
Moby

 

[dragonzim]

Originally Posted by Reef Diver
For example Bill Gates in his will at the current time has left a grand total of 1% of his total lifetime savings to them for their entire lifetime, I belive there are two kids, mabey more. T
Not the best example. Bill Gates is worth approximately 10 BILLION dollars. Just 1% of that is still 100 MILLION!!!

 

[phixer]

Originally Posted by Reef Diver
Very good point however, people that made million/billion dollar corporations have given their kids an interesting. For example Bill Gates in his will at the current time has left a grand total of 1% of his total lifetime savings to them for their entire lifetime, I belive there are two kids, mabey more. The rest goes to charity. He did not even leave them with his buisness. He wants them to make their money on their own, not be lazy *ss sobs who lay around and do nothing, those hard worksers, are the people we need today, who have thir parents legacy to live up to. YEs you are right, and I found an interesting article on MSN about this that you may want to read. I am not trying to be condecending to anyone I am only stating my opoinion. Also capitalism does separate the smart from the lasy people, however, it does not guarantee eithers success. Remember Phixer, remember humanities past, has capitalism, or socialism worked in the past? NO it has not. It is a good Idea in thory, but when applied to real life, it doesnot work at all, because We a humans' want, always want a better life for ourselves, and our own. Ethanol to make my point on this, is a horrible innovation, it may solve our gas problems, but it is worthless, for large use, as it will cut down our food supply, the whole american corn industry would have to be utilized completely for any widely available ethanol. Also, remember we have a serious environmental problem, which ethanol does nothing for.
Interesting, but why did you say that capitalism or socialism hasnt worked in the past? I think that we are in agreement however I dont understand what your point is here?
Regarding ethanol, sorry man but your way off track on this one. It works for Brazil and will work for us too, it already has before, is now and will gain popularity in the future, just watch? The US has a great deal of farmland, very often it is the US who supplies grain to the rest of the world. The Arab countries do not have the same resources when it comes to farmland or ethanol production that we do, you see by using ethanol we would not only reduce our dependancy on foreign oil and the stranglehold our enemies have on us but we could also use our farmland resources the same way the Arab nations use the oil fields by selling grain or ethanol it to other countries who lack farmland or oil, countries like Japan.
Switching to ethanol could also give the American auto industry a huge shot in the arm. Detroit already makes flex fuel vehicles, the technology is already here. If the US auto manufacturers would get on board and make all vehicles flex fuel by 2009 the tables would easliy turn because local ethanol production is far less expensive than foreign oil refinement. Additionally diesel engines can easily run on bio-diesel which also goes back to another American resource, vegetable oil.
And... no it wont reduce our food supply because of proceedures like crop rotation and the fact that there are many sources of ethanol besides corn. And the last response... ethanol is a cleaner burning fuel than gasoline, this thread is getting too long so I will give details in another reply. Overpopulation is more of a threat to the food supply than ethanol production is.
Best Regards

 

[reef diver]

Sorry I forgot to read your last post or two before I wrote that, but dragonzim, keep in mind, by your lifes end you may have made well over 100 million, just you spent all of it. Also, that 100 mil is over their whole liofetimes, and they have to split it between the two of them.

 

[schneidts]

We should all take up a fund for them...

 

[k-rok]

Wow, I've been thinking about what it would be like to own/operate a LFS. There are advantages over online stores - but I think you would need to have both to succeed, or at least couple the fish store with something else - dual products/services. I have to drive 50 miles to get to the nearest FS - marine anyway. However I live in a small city (can hardly call it a city) and am wondering if there is even a market for a FS. What would be the best way to determine if there is a market?

 

[k-rok]

Wow, I've been thinking about what it would be like to own/operate a LFS. There are advantages over online stores - but I think you would need to have both to succeed, or at least couple the fish store with something else - dual products/services. I have to drive 50 miles to get to the nearest FS - marine anyway. However I live in a small city (can hardly call it a city) and am wondering if there is even a market for a FS. What would be the best way to determine if there is a market?

 

[reef diver]

Originally Posted by tony detroit
I'll tell you guys the same thing I tell people about our business when they complain about pricing.
"The water's nice, come on in."
If you think the stores are making so much money, go ahead and open one up. After all, you'll be making a ton of money.......
Have you considered a guy making 50K per year with health insurance cost the company he works for roughly 75K to have him?
Did you know your employer matches your SS Tax, and other taxes as well. That means if you pay 200 for the week in SS tax, and others, your employer has to pay the same amount for you as well.
Don't forget about property tax, some shops up here are 15K year, just in tax. Some strip-mall storefronts pay upwards of 5K per month in rent. That's 20K per month with no other costs put into the equation. And you have to make it selling fish.
Don't forget about water and electricity, and losses, and in the end don't forget about your time.
And please, do not use the phrase "write-off" referring to it as free money. Writing off money is income you do not pay taxes on. It is not free money like everybody thinks. It is simply income that is not taxed.
Time is money. We don't go to work for fun, we go to get payed. If it was fun you'd do it for free.
From a family business perspective, I don't think the LFS's are really making as much money as everybody thinks at all. I think the maintenance companies running without storefronts have a much higer profit margin.
What if I told you our INSURANCE AND TAXES ALONE ON A PER DAY COST ARE 1800. And we're just a small mom and pop company. Let me also tell you, there are no sick days, no personal days, it is a second wife to run a business. You are lucky if you get a week off, and when you come back, everything is messed up. Family business is a way of life, it is not just a job.
I concur, people think the same about the restaurant buisness. (FYI my dad owns one. Thats why yousee soooo many people set on owning a restaurant, then they try it,and theyt go bankrupt.

 

[schneidts]

That's some mom and pop business if taxes and insurance are running 657,000 a year!

 

[zanoshanox]

At my store we have a large sw selection and the tanks are all linked together, run through one huge sump, and the biggest custom made UV and Proten skimmer on the market. The entire system costs about 30 grand. And we only mark up 1.5-2x what we pay. I don't think that's too terrible.