After I had finished up my Cash Flow Projection, I had a dizzying amount of numbers and totals to analyze. I used the totals to help me figure out my "Break Even Point", which is basically the amount you need to make monthly in order to pay off all of your bills.. I think that I did it correctly, and my break even point was roughly $4700 give or take $100.
That breaks down to $157/day of sales that I need to hit to break even.
Now, that's not a whole lot to expect to make in a day, however I know that retail is unpredictable. There might be some days where one person goes into a gift shop, and you make zilch, zippo, nada. So is it possible to make $314 in a day to make up for an extreme down day? You cannot know.
This is something that I have been struggling with. I expect to be successful, and I have so much faith in what my shop will be, however you cannot predict that people are going to go shopping on any given day.
So this dilemma has led me to another dilemma: LOCATION and RENT.
I have quite a big list for my location, as this is a HUGE key in getting the customers that you want, and thus getting the sales you need.
Here's a small idea of what my ideal location includes:
HIGH FOOT TRAFFIC
NO STRIP MALLS
BUILDINGS WITH CHARACTER
So the dilemma is this: the better the location, the higher the rent and the higher the rent the higher your bills and the higher your bills the more you need to make in a day to break even.
ALSO, if you pay more rent for a place that already has high foot traffic, and other area shops that people come to, then you can get away with paying less for advertising as some of it has already been done for you. If you pay less rent for a place that is less visible to the public then you are going to need to pay more for advertising and basically cancel out what you saved in rent.
So I keep spinning in circles as I continue writing my plan and trying to figure out if I can do this, do it well, and do it successfully.
But even with all of my apprehension and fear of the unknown, I just have a feeling that I need to do this. It's a gut instinct that is telling me that this is going to work.
I will keep you posted as I continue forward!