Sum Dum Gai
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Post by Sum Dum Gai on Jan 14, 2014 15:34:41 GMT -5
Walmart's business model is to sell everything with really small margins, but sell lots and lots of stuff every day. It works for them because their stores are gigantic and are considered one stop shopping destinations for a lot of people. Grocery stores do the same thing because people buy groceries constantly.
My store doesn't work like that. I'm a boutique store. I sell stuff you can't find other places, but I sell it at higher markups. I do fewer total sales, but I make more money on each sale.
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justme
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Post by justme on Jan 14, 2014 15:36:29 GMT -5
Average of $1500 daily sales x 30 days: $45,000 monthly Less COGS/inventory purchases (12x per month): $36,000 (assuming high) Less store rent: $1800 Less store insurance: $250 Less store utilities: $600 Less owners salaries: $4000 Any other wages being paid? What costs for the farm? Profit so far: $2350 COGS is just veggies. She also needs to purchase the Amish chickens, Walmart formula, and other pantry items on discount.
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Rocky Mtn Saver
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Post by Rocky Mtn Saver on Jan 14, 2014 15:37:22 GMT -5
True, this isn't her full Cost of Goods Sold number, is what you're saying.
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tloonya
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Post by tloonya on Jan 14, 2014 15:38:51 GMT -5
Average of $1500 daily sales x 30 days: $45,000 monthly Less COGS/inventory purchases (12x per month): $36,000 (assuming high) Less store rent: $1800 Less store insurance: $250 Less store utilities: $600 Less owners salaries: $4000 Any other wages being paid? What costs for the farm? Profit so far: $2350 I forgot that I have this advanced loan. It is taking 50% of my cc. But I am paying it off in 5 month. I have 20 days to pay it off and then I might going to have some few hundred daily more. Of course I forgot gas for truck $120 weekly, and hand trucks replacement and cleaning supply that I buying a lot! Wet days...got to dry floors of. Sometimes advertising... There goes my $2350 profit...
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tloonya
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Post by tloonya on Jan 14, 2014 15:40:45 GMT -5
Right, so your overhead is $2,650 (rent, utilities, insurance). Are there any other monthly bills the business has to pay? Inventory. To an accountant it's completely neutral. You're trading one asset (cash) for another asset (inventory). Ignore it for now. I consider that variable overhead. The rent and stuff is fixed overhead. You have to pay that. Don't have a choice. Your salary is variable overhead, you could lower it or not take any if the business was short on cash. For now we'll add it to the overhead to give you a total of $6,650 in overhead every month. Now, how much do you do in total sales every month? I would insist on $45K Thanks btw, it was a great explanation
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Rocky Mtn Saver
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Post by Rocky Mtn Saver on Jan 14, 2014 15:42:24 GMT -5
Average of $1500 daily sales x 30 days: $45,000 monthly Less COGS/inventory purchases (12x per month): $36,000 (assuming high) Less store rent: $1800 Less store insurance: $250 Less store utilities: $600 Less owners salaries: $4000 Any other wages being paid? What costs for the farm? Profit so far: $2350 I forgot that I have this advanced loan. It is taking 50% of my cc. But I am paying it off in 5 month. I have 20 days to pay it off and then I might going to have some few hundred daily more.
Of course I forgot gas for truck $120 weekly, and hand trucks replacement and cleaning supply that I buying a lot! Wet days...got to dry floors of. Sometimes advertising... There goes my $2350 profit... Adjusted for fuel. I don't know what $ to add in for the first item you explained. How much are you paying on the loan monthly? Or...
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Sum Dum Gai
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Post by Sum Dum Gai on Jan 14, 2014 15:42:32 GMT -5
You're already paying yourself $4k a month. I'd back that out and figure out your profit. You want to know what your profit is before you take money out of the business. That's the number that matters. You could have a business that doesn't make a penny of profit after the owner draw, and it's doing really well because the owner is drawing $15k a month.
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tloonya
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Post by tloonya on Jan 14, 2014 15:42:58 GMT -5
True, this isn't her full Cost of Goods Sold number, is what you're saying. I would reply to that but it is not getting into my brain...all I can say 'whaaaaaaaaaaat?' full Cost of Goods Sold number ?? whatever it is...
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justme
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Post by justme on Jan 14, 2014 15:43:40 GMT -5
True, this isn't her full Cost of Goods Sold number, is what you're saying. It's what I'm assuming based on previous posts. She doesn't track her expenses that well.
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Rocky Mtn Saver
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Post by Rocky Mtn Saver on Jan 14, 2014 15:44:43 GMT -5
What it means is that you said you spend about $2k to $3k "buying vegetables" twice a week. What do you spend on all the non-vegetable items you buy each week? Chickens, baby formula, etc...
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Sum Dum Gai
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Post by Sum Dum Gai on Jan 14, 2014 15:44:56 GMT -5
OK so we have: $2,650 in overhead $45,000 in gross sales
All we're missing is the cost of goods sold. So, you mentioned the veggie buying before and I told you to ignore it for now. Time to stop ignoring it. How much inventory do you have to buy every month to do your $45k in sales?
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Wisconsin Beth
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Post by Wisconsin Beth on Jan 14, 2014 15:46:27 GMT -5
True, this isn't her full Cost of Goods Sold number, is what you're saying. I would reply to that but it is not getting into my brain...all I can say 'whaaaaaaaaaaat?' full Cost of Goods Sold number ?? whatever it is... This is how much you spend on veggies, fruits, Amish chickens, dollar stuff, etc. The cost to TLonny's store of everything it sells. Or how much did you pay for all the stuff you're selling.
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Rocky Mtn Saver
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Post by Rocky Mtn Saver on Jan 14, 2014 15:46:54 GMT -5
Looney, don't you have some employees you pay?
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tloonya
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Post by tloonya on Jan 14, 2014 15:48:18 GMT -5
You're already paying yourself $4k a month. I'd back that out and figure out your profit. You want to know what your profit is before you take money out of the business. That's the number that matters. You could have a business that doesn't make a penny of profit after the owner draw, and it's doing really well because the owner is drawing $15k a month. I have to have that $4K because it is my mortgage and bills. If I don't take it - I am homeless. But I like that ' it's doing really well because the owner is drawing $15k a month'. Is it all possible? How do I as owner draw this much? Will I be able to justify that on paper at tax season?
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tloonya
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Post by tloonya on Jan 14, 2014 15:51:27 GMT -5
What it means is that you said you spend about $2k to $3k "buying vegetables" twice a week. What do you spend on all the non-vegetable items you buy each week? Chickens, baby formula, etc... That is why I needed a loan. I had a hole there and when bills were due I was like OOOps! Need to cover the hole. Loan pay is based on daily cc sales. If I ran $300 in cc they will take $150. If $90 they will take $90 because $90 is minimum.
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Rocky Mtn Saver
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Post by Rocky Mtn Saver on Jan 14, 2014 15:52:25 GMT -5
You didn't answer my question. How much do you pay (regardless of payment method) for your non-vegetable items to sell?
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Sum Dum Gai
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Post by Sum Dum Gai on Jan 14, 2014 15:52:51 GMT -5
Focus woman! How much inventory do you buy each month??
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tloonya
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Post by tloonya on Jan 14, 2014 15:53:23 GMT -5
Looney, don't you have some employees you pay? No.
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Rocky Mtn Saver
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Post by Rocky Mtn Saver on Jan 14, 2014 15:54:39 GMT -5
None? No one at all, even a tiny bit, since the guy you fired who was stealing from the business?
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Sum Dum Gai
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Post by Sum Dum Gai on Jan 14, 2014 15:55:35 GMT -5
Stop distracting her Rocky. I want the inventory number.
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Rocky Mtn Saver
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Post by Rocky Mtn Saver on Jan 14, 2014 15:57:10 GMT -5
Sorry! I want it too.
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tloonya
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Post by tloonya on Jan 14, 2014 15:57:48 GMT -5
OK so we have: $2,650 in overhead $45,000 in gross sales All we're missing is the cost of goods sold. So, you mentioned the veggie buying before and I told you to ignore it for now. Time to stop ignoring it. How much inventory do you have to buy every month to do your $45k in sales? Ok, let's say $1500x2 and $2K Friday (for 3 days) = $5K x 4 weeks = $20K Its produce. Groceries I am buying $1K weekly but I have inventory of that on shelves. But I mark it up 50% at least.
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Rocky Mtn Saver
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Post by Rocky Mtn Saver on Jan 14, 2014 15:59:13 GMT -5
Your produce numbers just got significantly smaller. But whatever. So, closer to $24k in inventory purchases monthly?
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Deleted
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Post by Deleted on Jan 14, 2014 16:01:12 GMT -5
Average of $1500 daily sales x 30 days: $45,000 monthly Less COGS/inventory purchases (12x per month): $36,000 (assuming high) Less store rent: $1800 Less store insurance: $250 Less store utilities: $600 Less owners salaries: $4000 Any other wages being paid? What costs for the farm? Profit so far: $2350 I forgot that I have this advanced loan. It is taking 50% of my cc. But I am paying it off in 5 month. I have 20 days to pay it off and then I might going to have some few hundred daily more. Of course I forgot gas for truck $120 weekly, and hand trucks replacement and cleaning supply that I buying a lot! Wet days...got to dry floors of. Sometimes advertising... There goes my $2350 profit... that sucks... no more CC loans!
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Sum Dum Gai
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Post by Sum Dum Gai on Jan 14, 2014 16:04:35 GMT -5
OK, so you're spending $6k a week on everything. 6,000 * 52 / 12 = $26,000 a month in COGS.
So you do $45,000 in sales. Subtract the COGS, leaving $19,000 Subtract overhead, leaving $16,350 Subtract your salary, leaving $12,350. That's your profit. See, easy.
If you gave us the right numbers, your business bank account should be growing by $12,350 every single month, in addition to the $4,000 you pay yourself. You've been in business for 3 or 4 years right? Your business account should be growing by $148,200 a year, so after 3 years you should have $444,600 in the bank. Nice.
Since you said you don't even have $20k in the bank earlier, I'm guessing you didn't give us your actual numbers. If those were your actual numbers, then yes, you could draw $15k a month in salary.
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tloonya
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Post by tloonya on Jan 14, 2014 16:07:03 GMT -5
I forgot that I have this advanced loan. It is taking 50% of my cc. But I am paying it off in 5 month. I have 20 days to pay it off and then I might going to have some few hundred daily more. Of course I forgot gas for truck $120 weekly, and hand trucks replacement and cleaning supply that I buying a lot! Wet days...got to dry floors of. Sometimes advertising... There goes my $2350 profit... that sucks... no more CC loans! We are praying there there is no more loans. However that one saved our arses. GTG guys. Be back tomorrow.
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tloonya
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Post by tloonya on Jan 14, 2014 16:12:35 GMT -5
OK, so you're spending $6k a week on everything. 6,000 * 52 / 12 = $26,000 a month in COGS. So you do $45,000 in sales. Subtract the COGS, leaving $19,000 Subtract overhead, leaving $16,350 Subtract your salary, leaving $12,350. That's your profit. See, easy. If you gave us the right numbers, your business bank account should be growing by $12,350 every single month, in addition to the $4,000 you pay yourself. You've been in business for 3 or 4 years right? Your business account should be growing by $148,200 a year, so after 3 years you should have $444,600 in the bank. Nice. Since you said you don't even have $20k in the bank earlier, I'm guessing you didn't give us your actual numbers. If those were your actual numbers, then yes, you could draw $15k a month in salary. It was $2350... Do not forget when I had that thief I had lost whole lotta mulla that I needed to replace. Consider me in business for 2 years max.
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Sum Dum Gai
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Post by Sum Dum Gai on Jan 14, 2014 16:15:06 GMT -5
2 years, 4 years, doesn't matter. Is your business checking account actually growing by $12,350 every month? If not, you aren't being honest with yourself about your actual numbers. If it is, awesome, raise your salary to $10k a month and start slapping people with wads of benji's.
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Deleted
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Post by Deleted on Jan 14, 2014 16:17:54 GMT -5
how much inventory gets thrown away or taken home? a cabbage here, a chicken there... it adds up.
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Sum Dum Gai
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Post by Sum Dum Gai on Jan 14, 2014 16:22:19 GMT -5
Based on the numbers she gave it wouldn't matter. If she's buying $26k worth of stuff and doing 45k worth of sales with under 3k in overhead she can afford to throw out thousands of dollars worth of stuff every month and still double her draw.
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