Who is actually making enough to pay themselves??

[mex_move]

I have this question because we are now almost two years in business. We changed locations and name after our first year so this may have hurt us a bit. Still, we havent seen much growth, we basically seem to make enough to pay our bills and that is it. I have a full time job so my significant other takes care of the store most days. However, if we don't start to see some profit soon, we'll prob call it a day and sell/close the biz. I love my store, but without customers....sigh....

Anyways.
Let me know if you are profitable and can pay yourself at least 30K/yr.
AND
How long it took you to get there.

We are at 2000 titles now, if we stay till end of year we'll probably get to 3000 titles. We do not rent/sell adult.

Thank you (and hoping to hear good news).

mex_move

[sungifts]

We were drawing $2k/month out until business took a dive a few months ago.  Of course, my huby could work the store and we could get rid of some employees and make at least 30k/year - but with a 2 year old - that's hard to do (we tried it in the beginning).

Now that business has picked back up, we should be able to draw money out again, that is, after I see what I owe for payroll tax, income tax, property tax, etc...

The store does pay for our cell phone bills and other items that are personal but fall under business expense - so, I guess that should count as part of what we are drawing out.  Sometimes I wonder if it's worth it...BUT, as the saying goes "Sometimes, it's cheaper to keep 'er"  As long as it's paying for itself, I will remain open.

[j4kp07]

I was bringing home 20k/year after 2 years in business.  Now that my wife left me, what essentially amounts to alimony, I'll be bringing home about 16k/year.  I expect business to grow again this year, my expenses should go down (since my real estate expansion is over), and I'll be adding pizza delivery later this fall.  My goal is to be back up to 30k/year take home pay.

Then again, I don't just rent movies.  I also have pizza take-out and 4 tanning beds.

[Ed]

Not for a few years.

[tonypotenza]

when we bought the store, it was barely making its cost (wish was about 3200 a week) after our mods, we are now doind about 4k a week, so thats 800 a week in the pocket, witch is pretty good, we are investing back into the store for now (tv series and games mostly) but when easter come, we open back up the ice cream parlor, so thats suppose to make big bucks ^_^

[moviebuff]

I was doing great until MG moved in, cut me to 1/2 so now just break even.  I did pay 52K in salaries though, so I guess if I worked all the hours I would make that?  Actually I have tanning also which helps, without it I wouldn't be staying above water even though I could save a little on labor.  MG go away!

[videovault]

To Be honest it took me a good 10 Yrs before I was finally able to see anything out of my store.  Since it was my only source of income I managed to be able to squeak out a weekly pay.  I wasnt much but atleast I was able to support myself.   Now as time has gone on and business has increased ( THANK YOU DVD's) I have been able to give myself a pay raise every yr.

Was it easy HELL NO...  would I do it again..prolly.

What I have find if you feel like you are stuck in a rut with the store, find someone with fresh eyes either in person or even here.     They may be able to give you some ideas as to how to increase your business.  


Dan

[genxmike]

We paid out approx 100K in salaries in 2005 (myself included).  It was our 11th year in operation. My take home was 27K.  We had a slightly down year and if we had equalled the year before I would have made the 30K (as I did in 2004).

I could easily take home more if I cut back staff hours and worked behind the counter myself more but I feel my time is better used doing other things for the store.

I have been paying myself approx 30k for the last 5 years so it took me about 6 years to hit that level.

[mcmarc]

I wasn't paying myself after being open a year when my wife announced she wanted to quit a job she hated, but paid well.  So, I took a leap of faith and am drawing 26k for 2005 and we are breaking even.


whew!
marc
orbit dvd

[Shiraz]

I find this all very interesting. I have my store set up to where I keep what's left over, so my bottom line becomes my line. I am looking into another venture (restaurant - probably open within the next couple months) that will actually cut me a paycheck and pay out bonuses.

But anyway. I have been open 2 1/2 years and took home (took home) $40k this past year. That's with me working 4 days a week. I think my rent and labor is why -  compared to others anyway.

I spend 30%+ on movies (I keep buying more and then sales catch up) but because of our sales increases, my rent was a mere 7% of sales. I also only spent 3% on labor last year, which will increase this year with tanning. But so will revenues and the bottom line.

There are pro’s and cons to the way either of these businesses handle finance. The way I do it now - if something important comes up and I have no money, I may be screwed. But I usually have plenty of cash to keep up with my personal and business needs (with exception of above - like if the car breaks down unexpectedly or I have a slow period like fall).

The other, which is why I am setting it up this way, is much better in my opinion. My pay will be performance based. As sales increase so will my pay. But if things go as planned, each month should have a “surplus” in the bottom line after everything is paid. This will even out the rough spots and allow for high-ticket purchases like if the cooler breaks down. But this surplus will be paid out in the form of a yearly bonus to me and the landlord who is fronting the startup investment. I have chosen the payout to be right around Thanksgiving - so I can have an easier holiday spending season and possibly a winter vacation. Yes I said it, vacation.

The first option was extremely helpful to me in starting up the video business so I could have every penny available so I could stay on track personally. I will most likely change the structure of how the video store pays me after this other thing takes off. Most likely with apposing calendar bonus payouts.

Anyway, great topic - interesting read.

[rufusjack]

I think you folks may not being looking at this in the correct way.

Lets say for example:  you could work for company XYZ having the same level of skills/responsibilities for $36,000 a year.  This would be a job with no risk of investment into.  No stress from being the owner.

So you have to pay yourself at least $36,000 for adequate comparisons!  You are not purchasing a job!  You purchased an investment!

Average salary for Movie Gallery store managers is in the $18,000 - 24,000 range.  But, they are treated very poorly in my mind.

As far as breakeven in cash flow terms, I believe Movie Gallery has said there new stores will typically break even in about 12-15 mos. (meaning they have paid all expenses and paid for a store manager as well).

[Shiraz]

Mike,

I don't think anyone disagrees with what you say, but there many owner/operators on this site as apposed to the iDea site that are like me and work our stores regularly. That's why I believe this site to be successful amongst the folks that spend time here.

Sure many have aspirations to be a multi-store owner and take many extended beachfront vacations but I think the reality of things is that most of these folks had an idea of what they were getting into and could walk away from it if they were so inclined. Most realize that they don't own more than a job – hell, they work it everyday. Many factors create this, but like many others here, the biggest determining factor for me is my location. My store looks like a smaller version of the big boys and members comment all the time about it and ask we are a part of a chain. But as my location created this wonderful opportunity and at the same time keeps me from becoming a multi-billionaire.

I don't think that owning a job is reason to fault people because they work every day. I know in my case, I have the security of knowing I captured my market and every penny of my sales would have surely gone to the big boys further away. My members are glad I'm here; they dislike driving a half an hour each way to rent a movie. Not to mention that my numbers wouldn't get any of the big boys’ attention. They won't be moving here anytime soon. Because if they did, the owner couldn't stay home anymore - he'd have to work just like I do.

I think your point is solid when it comes time to talk about selling in terms of what the business is worth. Let's face it; anybody that has the means to buy our stores wouldn't necessarily want to buy a job. I know I wouldn't.

Sure, sometimes I feel like I'm anchored to the store. But this is a small inconvenience for me as my personal income continues to grow. Owning this store has created so many new opportunities that I could have not realized before. I am pretty sure that owning multiple video stores aren’t in my future. But there is one thing that I am sure of and that is I won’t be working for anybody ever again - even when the day comes when I have to close the video store doors for the last time.

[rufusjack]

Hi Rob.

"but there many owner/operators on this site as apposed to the iDea site that are like me and work our stores regularly."

I know many of those who post on the iDEA website.  Guess what, they like me work their stores.  I will spend every day this month in my stores at least 4 hours a day, with most being 8-12 hours day.  Others are like me as well.  There are a very small few that do not work there stores regulary.  That is usually due to the fact that they other jobs/businesses to run.

"That's why I believe this site to be successful amongst the folks that spend time here. "

You do not have to choose!  I read both regualry and post on both regulary.  IMO, you should do both.  6-7 years ago, the old VSDA db, had 30-40 posts per day regulary. I used to not belong to the assoication thought I knew everything and never stepped outside of my store.  I regret not getting more involved within the association before I did.  

"Sure many have aspirations to be a multi-store owner and take many extended beachfront vacations"

I am not sure who you are talking about here.  The majority of the 800+ members of the iDEA are single-store owners (prob. 90%).   The iDEA is not a rich person's club.  Remember that dues for single-store operators doing less than $100,000 in video revenue per year is only $100.

"I don't think that owning a job is reason to fault people because they work every day."

I am not sure what you are talking about here.  I have never faulted anyone for working everyday.  Like I said, I do it myself!

[Shiraz]

Pardon me. I mis-spoke then.

[amanda]

if you arent making money, what are you doing it for? free rentals? i hope not. You should see some money asap, unless you blow it all on cool stuff like plasma tvs and fancy signs.