Is the risk worth taking.??

[Alan]

Hi everyone
I have been a lurker of this board and others for a while. I am trying to determine if I should take the leap and enter this business.  I have done most of my research and there appears to be a definate market for an IVR in my target town, but I am having a diffucult time in determing sales projections. The town pop is about 6500. With a 5 mile radius of the location the pop is 13000. There are about 4800 households in that 5 mile radius. My big question is what % of households could I realistically reach on a monthly basis.? I know that this is a tough question to answer. It seems like a store of this size could do 150k to 200k(annually) but Im not sure...

Thanks all
Alan

[googooeyes]

When you say 150-200k annually, does that refer to annual gross revenue from rentals/sales?  According to your projections, what do you estimate to be your annual net profit (revenues - expenses)?

[vifra]

Alan the market is quite good to start an independent operation, if you look at the stock market the large chains are starting to implode. the forcast is that consumers are going back to the more close relationship you can get from the independents versus the cold meatmarket the blockbusters of this worls are.


Good Luck in your new venture.

PS: I have a business plan for a Video Store some where keep an eye out in the download section I will place it in the next days.

Vic
 :lol:

[Alan]

The 150k to 200k annually would be sales, not profit. I am still working  on expenses. In the big picture, those numbers seem to be obtainable. If I could reach 25% of the households, and they spent what I am told is the average monthly expenditure ($15) than sales would be there. But when I start to break  those numbers down by month, or by day, they seem to be more difficult. For example: 25% of the total households is 1209. If each one of those households spent $15 per month on average, thats $18000 per month (gross sales), and that seems pretty realistic to me. But when I break that down by  week /day, that works out to $4000 per week and $600 per day (approx). At an average sale of lets say $5, thats 120 transactions per day, every day. That seems to be a lot for a relatively small town.  Maybe I am being to cautious, or I just dont understand enough about the market, but I dont want to force something. I would need this to be my primary income. I would not be an absentee owner, and cant afford to be way off!

What are your experiences? Again, I think the market is there, its just a matter if it is enough of one to be able to make a living. I live in the Northeast, and it sure aint cheap to live here!

Thank you all so much.
Vic, your site is tremendous. I hope people continue to join and share ideas and discussions with the freedom to discuss what they wish. I will keep an eye out for the Business Plan

Alan

[Victor Franqui]

Hi Alan:

Thanks for your kind comments, this forum has now about forty five days and it was growing quite quickly until I made a changed from invisione board to a complete portal site, and people stop participating, But I do not regret the change because it will benifit inmensly everybody with the new set up. I started a couple of years ago a DSS forum and for six months we had ten people less then this forum and at the year mark we had 1600 users with over 60 users on site any given moment after 2pm so as you can see we are in great shape.

I am quite happy with the site and this is my new pet project so I will work quite hard to keep filling it with sticky content and in about a month I will submited to the major search engines wit an installed cloaker and the you will see it grow.

I am using the movie FIELD OF DREAMS where Iowa farmer Ray Kinsella hears a voice in his corn field tell him, "If you build it, he will come."  

I guess my voice says build it and they will come. :lol:

Oh by the way check out the download section I have added the BP.


Thanks

Vic

[Alan]

Vic

Keep it up, and they will come. If it is a place where people can share ideas and have discussions freely, then I believe they will come.

Thank you for the BP. It looks to be very helpful. I hope others will chime in on how they got started. What was anyones situation when they decided to give this business a shot? How much research did you do? How close to your projections did you come? Do you continue to see a long term future of this industry?

Id love to hear from people..

Alan

[vifra]

Thanks Alan

 :lol:

[rrvideo]

Hi Alan,

We didn't do a new start up, but bought an existing store.  There are some things you didn't mention.  How close is your competition? IVR's or chain?  This will have a big impact.  We live in a town a little larger than the one you describe and last year we did $110,000 gross.  That was with two small ivr's in our town. Since then Movie Gallery moved in, the other ivr went out of business and we are hanging in there. (barely some days)  Don't get me wrong, I love this business.  Just make sure you are realistic in your projections.  In a small town there are so many things that can effect your business--weather, local sports, you name it!  A local high school football game can really do a number on our weekend sales.  We are in the SouthWest.  We are also in this day to day and not absentee owners.  

I also think this board is great!! I will try to post more often.  Thanks!