I got a rough estimate of rent expense from Mark when he was explaining the places we are going to go see next week. Three of the places around Camillus could be as low as $3,000 a month compared to Township 5 which would be more like $6,000 a month. Sounds crazy right? Twice the rent for a hot location!?!?! That can’t possibly be worth it. But if you looked at all of the projected expenses for the shop each month you would see that the rent is not the main driver. As with any shop the inventory is the largest expense. So here is what it breaks down to:
Assuming each sale is $50 a pop:
I would need 30 sales a day to hit my target income with rent at $3,000
I would need 38 sales a day to hit my target income with rent at $6,000
So here is the survey: Do you think it be worth it to pay the extra rent for Township 5 in hopes of getting more than 8 additional sales A DAY as a result of location alone?
Cheers!
Branching Out 
Since Township 5 is near Costco… I’d go with Township 5
LikeLike
30 vs 38? 8*$50 doesn’t equal $3,000 sister. Dreads must be plaguing your CPA brain
LikeLike
ahh, a day! bad units of measure… 8sales*$50*7days = 3000
LikeLiked by 1 person
*4 weeks a month * mark up = roughly 3000
LikeLike
Could you gather any data? Are there other bottle shops that you could canvass for a day to see what kind of traffic difference they have? Location is huge, but so is the assumption of an additional 56 sales of $50 per each week
LikeLiked by 1 person
This also does not account for the lower total sale but higher potential volume or, conversely, for the higher total sale that might come with a more upscale and newer development. I typically spend $100 or more at C’s without batting an eye.
There are too many variables to be sure of anything. All of this is a leap of faith (unless you ask Don the amazing “trace it back” raccoon). That being said, you have to follow your heart and do what feels best to you and trust that what will come next will be a result of your passion, a little bit of faith in yourself, and a lot of hard work.
My gut tells me that Township 5 was thrown in our laps for a reason… It’s up to you to decide whether or not you believe that reason is worth exploring.
LikeLiked by 1 person
Correct. This is a very hypothetical situation with all other variables constant. Just trying to isolate choices.
LOVE this post by the way!
LikeLiked by 1 person
Well…there are a ton of other costs that will come into play (which I know you’ve already thought of), and you don’t want to be struggling right off the bat, but if it is something you really want, go with your gut. I know how hard you guys will work it either way.
I’m impulsive, so I’d jump and go all in for the expensive one. 😉
LikeLike