Should AJ Open Crazy AJ's?
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$2,500 a month. I doubt that you would need that much even with all expenses. Why do you feel so high?
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@scottalanmiller said:
@Dashrender said:
Without taking taxes into account, you're looking at needing to earn at least $2500 or 625 hours sold per week, minimum.
You mean per MONTH.
my mistake.. yes per month.
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@scottalanmiller said:
$2,500 a month. I doubt that you would need that much even with all expenses. Why do you feel so high?
because you just did the math to show that the expenses for 4 months would be $10,000. so that would be $2500 a month.
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@Dashrender said:
because you just did the math to show that the expenses for 4 months would be $10,000. so that would be $2500 a month.
That was the cost of setting up the entire shop PLUS four months expenses
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@Dashrender said:
@scottalanmiller said:
@Dashrender said:
Without taking taxes into account, you're looking at needing to earn at least $2500 or 625 hours sold per week, minimum.
You mean per MONTH.
my mistake.. yes per month.
not really a mistake - the $2500 was per month, and the 625 was per week (assuming $1/hr charge)
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I'm guessing that shop rental plus utilities is around $700 or less. Maybe a lot less, might be $400. Might even be less than that. I see restaurants operating with one person in them for the whole evening. Nice, big places bigger than AJ would need. But let's be safe with $700. Then another $400 for rent (likely a lot less, but again, safety.) That's $1,100 + food each month. So likely at $1,300/mo he'd be in pretty good shape. Anything more than that and he is paying back his "startup" costs to himself.
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@scottalanmiller said:
@Dashrender said:
because you just did the math to show that the expenses for 4 months would be $10,000. so that would be $2500 a month.
That was the cost of setting up the entire shop PLUS four months expenses
awww.. yeah I guess you're right, but it would be less than the $550 shop rent $500 house rent, food, depreciation on the equipment/desks, etc.
OK you might need more like $1200 at the bottom, $1500 would be better.
That's down to 300-367 hours a week.
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At $1,300/mo that's only $44/day. Doable. Still tough, but doable. With computer time, beer sales, etc. it adds up.
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@scottalanmiller said:
At $1,300/mo that's only $44/day. Doable. Still tough, but doable. With computer time, beer sales, etc. it adds up.
Beer sales requires more startup costs so you can buy the beer. and electricity to keep it cold.
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It's completely possible that shops are only $100/mo. I know that in Matagalpa, the top houses in town rent for just $500/mo. That's pool like mine, four bedroom, garage, etc. It's more here in Granada, but this place is cheap. He'll have to do without maid service and stuff until he gets established.
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@Dashrender said:
Beer sales requires more startup costs so you can buy the beer. and electricity to keep it cold.
Yup, would need a little fridge. Nothing huge. And he can buy them as needed, not a lot at a time. So, say an extra $40 beer investment to get started plus the fridge.
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If the rent was really in the $100 - $200 range, and if he could find an apartment for $300, it would make things so much easier. There are small apartments for rent all over town but I have zero clue as to cost. I'll try to ask our house manager next time that I see him.
I would not be surprised at all if the total monthly cost could be $900, all food included. In an emergency to save money you can live in a hostel for $6/day including one meal. Add $5/day for a second, bigger meal and you can, if you have to, live for $11/day or $330/mo with all of your utilities covered, food, etc.
So getting down to $600 - $700 per month total cost envelope seems plausible while getting the business started. Not what you would want to do, but you do what you have to do, right?
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If he could get his cost envelope down to $600/mo. That means only $20/day to cover all of the bills. Suddenly the numbers seem pretty doable. And if the computer time is $1.50 instead of $1, it would get very easy, very quickly. Maybe our numbers are old and it is really $2, but I doubt it.
It would be awesome to discover that ten hours of use is all that is needed per day, total.
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And keep in mind this is assuming 100% money coming only from the Internet cafe side. Any beer or rum would be extra. Any printing services would be extra. Any fixing of computers would be extra. Fixing one computer for $20 would be a full day's pay alone! Maybe he could sell WiFi time for a lower price for tourists with laptops, $.50/hr or something to sit at a table - and likely have a beer or coffee. Or a Fanta, very big here.
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Plus AJ could do writing or sell other things, odd jobs for people around town. There are ways that he could potentially make more money.
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nice.. seems like it could spiral up pretty fast...
Would a local be able to afford a repair of a computer for $20? or would this be more for travelers?
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@Dashrender said:
Would a local be able to afford a repair of a computer for $20? or would this be more for travelers?
Ha, locals don't have computers. They really don't. Hence the Internet cafe business. All for travelers.
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When I cruised to the Bahama's, I found a Dunkin' Donuts that had free WiFi, I definitely spent around $10 there on drinks and snacks while I surfed the web.
It might be better to offer free WiFi and get the money from other things. Don't offer free power though.
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@Dashrender said:
It might be better to offer free WiFi and get the money from other things. Don't offer free power though.
Doesn't work that way here. Your business would be surrounded by locals using the free Internet and paying customers would be unable to get to the door. In works in the US and other rich countries for a combination of financial and social factors. Businesses are large and wifi doesn't extend to fifty other businesses and homes, the profit on coffee is huge, the spare expenditure power of everyone is huge. There is big money to be made on coffee and nothing to be made on wifi.
Opposite here. Businesses are all touching each other, there is no social stigma to sitting on the steps or sidewalk using the wifi, profits on coffee are low and on Internet are high, etc.
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aww.. well, definitely have to take the local situation into account... good to know.
