Recent comments and response...

I received the following comment on my Six Month Assessment post from a couple of days ago. I thought I would post it, along with my response... Feel free to let me know if you have questions, and I will do my best to answer them.
take care,
JD


bill said...
JD,

Been following your blog for a while now and this summary made me wonder: what is the end game for Nemo? You have had good initial success, but I'm pretty sure the idea was to have a business that supported you and your family, but now you have gone back to work to support it (and your family, of course).

You've hit "break even" twice (which is good) and have growth strategies (also good) but...

I guess what I am wondering is where does Nemo need to be for you to get what you were looking for? What volumes are you looking at to allow you to quit again and do the shop full time? When does the effort of starting Nemo make sense financially?

And thank you for your service, too. I grew up not far from Toledo - never realized there was a sub named after the town...

November 12, 2007 3:16:00 PM MST


JD Anderson said...
Hello Bill,
I'm glad you have been following the blog...

What makes sense? Well, to have $20,000 a month profits after tax makes great sense to me, but I know that is not realistic. To put the six month assessment in perspective, we did not expect to hit the break even point until 12 months of operation. You mention that we hit the break even point several times, and that is correct. I set up our budget so that we would have different milestones, each requiring an increase in revenues to get to the 'new' break even point. Your comment makes it sound like it might all be somewhat frustrating. It is not at all... We are six months ahead of schedule. We still have a significant chunk of our original capital investment left, and we could begin paying ourselves a personal income instead of me working. However, we would rather save that capital for a rainy day, rather than use it up paying our day-in and day-out personal expenses. Thankfully, I have the ability to land jobs in the $30 to $40 per hour range and that allows us to cover our personal finances, take care of one of our rental homes that is currently empty and undergoing some remodeling, etc. Going back to work full time is not a setback, but just one of those things that we decided would be a smart move in the long run.

So, to answer your questions...
We are thrilled with how Nemo's is performing. We have some future plans set in place to continue to grow our revenues. Our budget is now stable without any forthcoming increases (we signed an 11 year lease, so that is stable), other than typical cost increases due to rises in utilities, vendor product costs, etc. Even after Nemo's is profitable, I may continue to work for some time and save that money. We would like to invest in additional real estate, and it takes $$ to do so. I would love to see Nemo's at the point of paying our personal finance responsibilities, and my salary going towards future investments, possibly additional Nemo's locations!

So the short answer is "It all makes sense as long as you have somewhere to live and some food to eat". The long answer is a little more convoluted, and who knows what difficulties, or blessings, could pop up along the way. If you want to be an entrepreneur, you have to jump in with both feet, make the best decisions that you can, and hang on!

EDIT 11-14-2007 It just occurred to me that you meant numbers...
Our current budget, which is worst case (no more incremental jumps over time0 requires us to have approximately $690 in sales per day. That is gross sales before product costs are taken out. And, that is based on a five day week. It may sound like a lot if you are a small independent, but we have not even started to tap into the potential market around here. We averaged a little over $690 per day last week. We had a weak Monday, followed by a $750 Tuesday so far this week. I will be watching our numbers over the next month or so to see if we are consistently hitting the break even point or not. My wife was a Starbucks manager and worked in stores that averaged $30,000 per week in sales. My end goal is to average $7500 weeks on a consistent basis.

Gotta run,
JD