Danielle and I like to say, “It’s easy to spend money…it’s the keeping it that’s the hard part.” Yes, there are things we need to spend money on in order to operate our businesses. But as entrepreneurs, people are always trying to sell us things in the name of improving our businesses. There are coaches, marketing consultants, PR pros and more.
This is yet another reason why I love Dragons’ Den: In last night’s episode I heard one of the greatest business tips ever – and it was absolutely free.
Over the years Danielle and I have met our share of women interested in opening up food-based retail shops. I understand the compulsion: you’re a foodie, you get to design something really pretty, and then you get to work there.
When the two of us were deciding what kind of business we wanted to start we had no idea what we wanted to do. But two things I did know. I told Danielle, under no circumstance, did I want to do anything that had to do with perishables or retail. I couldn’t imagine working in a business where your inventory went bad at the end of the day. Nor could I imagine being shackled to a store.
But LOTS of people want to open up food shops and restaurants.
Do you? Because Jim Treliving gave the best low-down on the retail food biz I’ve ever heard.
Dougieluv walked into the Den looking for an investment in his 650-square foot, Vancouver-based hot dog restaurant, DougieDOG. For about $7 each, Dougieluv sells 26 varieties of all natural, nitrate-free hot dogs. He earned about $300,000 last year in sales. On that, he lost $10,000.
So here’s the punch line: Treliving said that a restaurant about that size needs to bring in $700,000 in sales each year in order to break even. It doesn’t matter if it’s coffee or hot dogs or whatever. $700k a year, $60k a month.
So there you have it – the math on what you need to earn to operate a successful resto. Unlike a lot of things in business, this advice was free. I hope it saves you some heartache and hard work.
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