So my mom texts me today telling me she's found the most AMAZING space to rent. It's a shop in a little town called Cloudcroft (New Mexico) with a small bit of tourism every year for traffic. She is going on and on about how it's only $400/month rent with electricity. How she'll fill it with artwork by so and so (Friends), cards by this person, cookies by this person (I told her no on that one and she dropped it), she'll make wreaths and buy this and that. She is flying high in the sky on crazy juice and I don't know the ins and outs of business expenses to drive her back to reality.
For those of you who own and run your own businesses PLEASE give me an idea of all the costs. I've listed for her internet, phone, liability insurance, rent. Trying to get her to wrap her mind around how the profit is what she sells the item for minus what she paid. Shipping costs, business license and wholesale license right? Advertisement... I used to sell the stuff so I darn well won't let her get away with doing none of it.
All that stuff can be figured with a well thought out business plan, but my problem? Some BLEEP head is telling her to sign the lease "now or never" before it's gone and she wants to jump into it and work backwards. She was laid off work 6 months ago, can't get a new job and is hitting 63 soon. I have talked her down into not doing it until I give the OK on a business plan but she may sneak off and do it anyways while I'm not looking...
Just for the record, I believe in her. I know she can do this, but not without planning and thought. Sure everyone likes the idea of owning their own little shop and chatting with customers while the day lazily passes by, but that's not the reality of business and she can't afford to eat up her retirement.
So any with advice I can pass on to her? Anyone think I'm being over protective and it's "just" 400 dollars?
Depending on the lease term it could end up being several thousand dollars, and the "now or never" tactic is usually not a good sign.
At the very least you should have her set up an LLC before she even thinks about signing the lease, that should buy you a little time while you work out the numbers for the business plan.
Thank you Jason, I'm looking into that now to pass along. I don't think my parents know how much stress they add to my life. They're like a used car sales man's dream! I still remember that time a door to door vacuum sales man came to my Dad's house and walked out with a 3k sale. NRrgeglelgleeaarelaRRRGEGEGEe. PARENTS. (Although I totally want to inherit that vacuum some day!)
Oh great, and now I've struck a nerve with her and she tells me she knows what she's doing. And saying she can hire a shop girl so it won't suck up her time/life since she'll also go on semi-retirment. I'm going to go pull out all my hair now....
She just said if she makes at least 600 dollars a month it'd be 200 dollars profit and that'd be fine for her... Can I go cry in a corner now? (I explained 200 dollars wouldn't even fill her shelves with product let alone cover x, y, and z, but the fact I have to tell her that at all!)
I think I'm being punked....
Don't forget that hiring a single employee will cost at least $10/hour fully loaded, at 40 hours a week that's $1600/month.
Okay..Okay, crisis averted! Thank you for being here while I was freaking out Jason. I seem to have convinced her she should get a job as a shop girl to help her learn more and figure out a proper business plan. Oh man, I swear I was having such a bad heart attack over this. She's the kind of person that'll sign a check over when I'm not looking and buy the craziest things. Parents should never get laid off then get a mid-life crisis all at once, I can't handle it!
Just have to keep her distracted until I can move back home. Can't leave people to their own devices!