I am looking at buying an old store that has gone under due to mismanagement. I'm hopeful that I can bring a few ideas to it to turn it around - the expenses sheet they have put $6250/mo in wage which seems low to me. I was thinking I'd need 110 or so hours per week, so at $15/hr thatd be $7500/mo. But I think thats probably too low of an assumption? Unless it's not. What do you think I should assume on wage expense per hour?
Thanks.
The store at its peak was doing about 700k in sales in 2014 with 400k of gross profit, 80k net profit. Its currently doing 400k of sales because management has been shutting down and not managing the business/removed food and gasoline from the offerings. Its nearby a ski town (10 min) but doesn't get any traffic from it currently as it's the only shop in town and not on a major road - the plan is to 1) get the base operations back in order, 2) upgrade the offerings/events with tourist focused items, and 3) add a full service deli + ice cream and do basic things like get a website/put them on Google. The goal with all of this would be to get it to 1mm in sales with 550k gross and 150k net.
Is it a specialty store that requires product experience, knowledge, ability to discern customer needs, etc in order to earn repeat business, or is it general retail? Is the clerk also expected to do anything else? Is initiative and discernment required for those tasks or are they assigned by a manager or leader? Are payroll taxes and fringe benefits accounted for separately? Is the local labor pool and wage for similar positions able to supply your need at the hours and days you need the help? Can you cover if the individual assigned to the shift just doesn't show that day?
Wages start at over $17 / hr in rural northern MI, plus substantial healthcare, leave, and retirement, for reliable and disciplined unskilled help, in a career path and location that has very substantial opportunity for advancement.
There are 50 questions here and I can't answer them for you, but the answers will help inform your estimates. Hope this helps
General retail with a managing partner on site at all time. Initiate will be with the partner for the most part, but ideally the person would be friendly and willing to help with normal activities in stocking and checkout. Will be able to operate if they don't come in for some reason.
15 should be the entry level wage. If you hire experienced cashiers, or expect them to do anything beyond the bare minimum, you should give them more.
Honestly I'd consider a profit sharing model, might help you get more motivated employees who will be more motivated to upsell and are more likely to take care of the place. Just my 2 cents from having worked a lot of retail/service industry gigs the two places I worked with profit sharing were by far the best places to be.
You realize that as the employer you will be paying overall more than you pay them. I don’t remember what employee overhead is offhand but like 15% or so I think. Plus you will need to pay into the unemployment trust fund quarterly and if they are over a certain number of hours and uninsured you pay a tax to the state for that as well.
Anyway, 15$ for the no experience doesn’t care employee. 17 for the shows up and is useful, 20 for the employee who will work to make your successful.
*I looked it up and the SBA says to plan on the cost being 1.25 to 1.5 times the wage for an employee.
** at 6250/month I bet they weren’t paying themselves and they were working a lot.
Be warned: Get what you pay for. Pay minimum and get minimum. Pay more and get more.
Pay peanuts, get monkeys
Sounds like you could get away with 15, but you're life will probably be a lot more enjoyable of you pay 20
Sounds like i should go with 17-20 with benefits to be competitive from the responses. Yours was very detailed and helpful. Thank you!
I want to do that but the store isn't currently profitable, so that'd be a share of 0!
That's okay though! Like personally if I'm a worker at a place and I could get a profit share in the future, I would probably stick around for a while to help make it happen if I feel like ownership/management is making me a part of of things. Just my 2 cents.
The country store in my town seems like they’re about to go under because they can’t keep people on staff, presumably because it’s kind of out of the way and they don’t pay well. Sort of a shame.
Piggybacking on the other commentor but you could also offer really good employee benefits... if it's a food store you could give a staff meal each shift or a nice discount on whatever you sell. That means a lot when there's not many places to shop.
My tone seemed a bit hostile and it wasn’t meant to be. I apologize for that but didn’t edit my comment. I think 17 to 20 will get you a good employee who will be invested in you success. Better yet, get some one at 17 and bump them to 19 after a year of good work to show your appreciation. Or 18.50 after 6 months and 20 after a year.
I wonder if thats the one I'm looking to buy!
I doubt it, the building only went up like 3-4 years ago. It’s a really nice space and their food is generally good, but they’ve raised their prices across the board, especially on beer, once or twice since opening and now I don’t go there all that much.
Hm maybe if this one goes well I can expand ha
FreighterTot t1_iw03bfd wrote
What are you hoping to do in sales?