Who has owned their own retail business?

[War Machine]

hey, I have been thinking about opening one of those illegal gaming rooms too!!

[BLAKE]

sorry bro, but you missed the boat on vape shoppes. best of luck!

god bless.

Hah, that ain't it. Lol

[John -- '02 HAWK]

Better to hire two part timers than one full timer I would imagine, but I'm not current on the laws with the new healthcare for businesses with that few employees.

I believe under 10 employees its not a worry IE was like the rules before

[dblack1]

Be very conservative with estimates as to how much cash you think you'll need to complete the first cash conversion cycle and all startup costs - then 3x that number. Cash flow is the killer to a startup.

3x might be enough.

I'm in the middle of a start up now and my cash burn rate is pretty crazy. I'm less than four weeks from "making" the first dollar.

I spent more on every single thing than I had originally planned with the exception of electrical. I also had a almost 30 day delay on machinery that I hadn't anticipated. I also underestimated the inventory due to discounts at truck load quantities. So many things that I really cannot resell and make money unless I fill the truck up to lower the average of freight per item.

[BLAKE]

That sounds like an adventure. Good luck to you sir.

Thankfully, none if those things will be a concern on this one.

[KBScobravert]

It is not what you sell it for, it is what you paid for it. That said, control your expenses is more important than your sales. If your money going out is not going to give you a return, rethink it until you are really making money first. I worked for a guy that had a GREAT parts store and a great model but spent crazy money each month that was not conducive with the sales.

[fordracing19]

I believe under 10 employees its not a worry IE was like the rules before

Pretty sure it's 50 employees.

Sent from my SAMSUNG-SM-N900A using Tapatalk

[fitzwell]

It is not what you sell it for, it is what you paid for it. That said, control your expenses is more important than your sales. .

Pure Gold there...

[Tyrone Biggums]

There's some good info here so far, but I like this the best.

It isn't a "months of expense" exercise - it's how long it takes to convert resources to cash inflow. I can't say without knowing your payment terms to suppliers, payment terms from customers, and inventory levels. Being new, of course you'll have to estimate these numbers ... be conservative. It sounds like you've thought of the inventory portion of the equation - you also have to think about days to collect payment after sales and days to pay your bills:


Cash conversion cycle = Days Sales Outstanding + Inventory Days - Days Payable Outstanding.

Days Sales = (Accounts Receivable/Credit Sales) X Days in Period
Inventory Days = (Inventory/COGS) X Days in Period
Days Payable = (Accounts Payable/COGS) X Days in Period

Here's a good read:

http://www.investopedia.com/terms/c/...rsioncycle.asp

You've got to have enough cash to be able to carry all of your expenses for "x" amount of "worst case scenario" time. Ask yourself how much would I need to cover all of my bills, carry my inventory, cover payroll, every single expense, should I not make a dime for "x" months? Not saying that will happen, but it could. How long would you let it go before knowing when to cut the head off the snake?

Failure is not something anyone wants to think about, but many are so afraid to accept it, they go broke trying to save something that can't be saved. Have a plan for that.

I don't know how much this will apply to your business, but also be careful about growing too fast. This falls under the cash in/out category. If your spending money like mad to keep up with demand, the cash needs to be coming in at the same rate. If you're carrying customers 60/90 days before you get your money, it's going to kill you if you have no growth capital. Vendors don't care that you aren't getting paid yet. They want their money now.

I'll have more comments/ideas as they come to me. My brain is full of fuck this morning.

[bcoop]

There's some good info here so far, but I like this the best.



You've got to have enough cash to be able to carry all of your expenses for "x" amount of "worst case scenario" time. Ask yourself how much would I need to cover all of my bills, carry my inventory, cover payroll, every single expense, should I not make a dime for "x" months? Not saying that will happen, but it could. How long would you let it go before knowing when to cut the head off the snake?

Agreed. Retail is a totally different ballgame from what I'm used to dealing with. But with restaurants, you basically plan to not make a dime for 1 year. If you don't have 2-3x the cost to build out, stock inventory, etc; and enough to cover 12 months with no income, then you need to save more, or find something else to do. As widely available as all this info is, people still fail due to lack of operating costs more than any other reason. They think they are going to open and have to hire traffic patrol on day 1. Unless you've got a name, it's just not going to happen. And even when you have a name, it's not guaranteed.

[inline 6]

It's a vape store isn't it.

[Hmbre97]

Excellent. This is the kind of gold I'm looking for.

Sales would be on the spot. Point of purchase, no accounts receivable. Most inventory after start up would be walk-in used items. New items would be low volume bought online, clearance type items.