During the inaugural Monthly Business Support Meeting held recently, one of the questions I asked of the particpants was:
Do you know how much your business costs you per year....?
In other words....Are you aware of your actual expenses....? What it costs you to do what you do....
Based on the answers given, some 'homework' was allocated....And even though I had itemised my own expenses when I put my Business Plan together 19 months ago, I've taken the opportunity to revisit them & I thought it might be interesting to share some of them with you....For those of you 'in the biz', you may be well aware of what it costs you to operate as a Vintage Re-seller though, there might be a few expenses you hadn't considered....For those of you out there who simply adore & BUY vintage, it might be an eye opener & provide an insight into the costs we attach to our items....!
Insurance:
$ 365.00 Business
$ 470.00 Work
$ 600.00 Vehicle
$ 200.00 Home (Pro-rated portion of Home & Contents to cover stock)
$ 1,635.00 Sub Total
Vehicle (Commercial van):
$ 665.00 Rego
$ 1,500.00 Maintenance
$ 4,320.00 Fuel ($90.00 min p/wk x 48wks)
$ 6,485.00 Sub Total
Fees:
$ 380.00 Licensing, 2nd Hand Dealers renewal
$20,000.00 Antique Mall spaces rental
$ 1,000.00 Various Markets & Fairs (Either as Vendor or Buyer)
$ 1,200.00 Online selling (Based on fees generated THIS month alone x 12mnths)
$ 380.00 Accountant
$22,960.00 Sub Total
Storage:
$ 3,564.00 Additional storage required to house stock
$ 3,564.00 Sub Total
Working from home:
$ 840.00 Internet
$ 295.00 Water
$ 580.00 Electricity
$ 1200.00 Consumables - Hardware & cleaning
$ 400.00 Consumables - Stationery supplies
$ 3,315.00 Sub Total
** NB: Water usage - Based on additional water used during my businesses first financial year (adjusted for suppliers price increase) compared to when I was employed in the city....I'm PROUD to be able to report our home STILL uses LESS than the 150 litre p/day p/person recommended water usage set during the drought....!!!!!
** NB: Elecricity - 'As above'....Power tools, internet, additional lighting used etc.
$37,959.00 TOTAL - BEFORE stock, buying trips & costs associated with organising the SVJ-Extravaganza....!!
Just like a household budget, I'm constantly tweaking, editing & trying to find CHEAPER alternatives be it stock, internet supplier what have you....!!
Each month I 'forecast' sales & pay my expenses accordingly, though sometimes it's a matter of juggling & robbing Peter to pay Paul....Now this is not noted to illicit sympathy....I ADORE what I do....I LOVE being my OWN Manager....I left a WELL paying job in the city to do what do....I'm simply saying it as it is & hoping perhaps to provide food for thought to those of you contemplating moving your passion from a hobby to a business or for those of you considering buying one of my Treasures....The majority of Vintage Re-Sellers are in this business purely for the lifestyle i.e. Being our own boss, choosing our own hours....We do this because we LOVE it....I certainly don't expect to EVER earn what I was earning when I was shackled to a desk 9-5....But I WOULD really like it one day if I was able to pay myself a wage & take a holiday....
Now have I mentioned lately I've reopened my Etsy Shop & have items listed on eBay....hahahahahaSNORT**wink**....??!!
I hope you're all having a SPLENDID week....!
Cheers,
Tamarah :o)
Good eye-opener for some, I'm sure! Your space rental seems very costly - I'm thankful mine here doesn't approach that number! Yep, we do it because we love it, but that doesn't mean we want to do it for nothing and there are some buyers that seem to think we should...we so appreciate all the ones who understand the effort and expense of bringing unique things to market!
ReplyDeleteJan
P.S, coming to Junk Bonanza next month?
Oh Jan the rental is a KILLER....Mind....I have Friends in the biz paying $50k+ shop rental so all things considered, it could be worse.....!!
DeleteOh YES indeed.... I have some Customers I WISH I could bottle....Time & again they shop with me & I HOPE they have some small understanding as to how much I value their custom....!!!!!
No Junk Bonanza AGAIN for me this year Lovey....I'll be there in spirit....**sigh**.....
Cheers,
Tamarah :o)
Thanks for the breakdown Tam, its probably a good eye opener as you say for new ventures. The mall rental is very high, but hopefully the pieces are selling well to cover the expenses.
ReplyDeleteTwo things that you didn't mention would be travel expenses, be it a country trip or a buying trip to the states, then there's the 'time' expenses that you cannot put a $ amount against.
If I put the time against making my jewellery and what I sell them for,ie, searching for new stock (stamps and jewellery bases), making the pieces, branding the items (making business cards, backing cards), listing on etsy etc, it would not be worth the hourly rate. At least I can make them when I want and can walk away when I have had enough because I still have my day job.
I admire you for taking the step to do what you love and I hope you can continue to do it for as long as you can,
Have a crazy good weekend. We are heaping to a reclamation yard tomorrow,yippee! I will be sure to take photos :)
Hey Tam....!
ReplyDeleteI've incorporated the cost of country trips in my fuel summary but have specifically left out all buying trip related info....I won't even 'go near' time because it's just too hard to calculate....Recently I was given cause to revisit the 'work SMARTER not harder' sentiment....
Have fun tomorrow....Maybe well BOTH have pics to share of Treasures found....**wink**....!!
Cheers,
Tamarah :o)
Thanks so much for the insight. I am just steps away from joining you so readin g your post was a great reminder of the big Exe's. I have often wondered how you have been since leaving your paid job - You certainly sound much happier xx
ReplyDeleteHugs - Fee X
Hey Fee....!
DeleteHow EXCITING for you....You'll have to keep in touch & let me know how you're going....!!!!!
INDEED....I'm MUCH happier being my own boss....In charge of my own destiny....**wink**....!!
Cheers,
Tamarah :o)
Very interesting Tamarah. Food for thought. Sounds like you have to spend a lot and work hard to make a little...I will keep this in mind next time I shop for treasures.
ReplyDeleteHey GORGEOUS....!!
DeleteI hope you've been well Kylie....!
Yes it IS hard work....But I wouldn't swap for quids....I just need to ensure I start working SMARTER....Then I'll see more of a return....!!!!!
Cheers,
Tamarah :o)
Why on earth would anyone want to go into this business?
ReplyDeletelabour of love i reckon.
Indeed Rebecca....Love....Love....Love....LOVE....L.O.V.E....!!!!!
DeleteCheers,
Tamarah :o)
It's hard being your won boss. Plus you don;t have benefits or employment insurance...both hubs and I are self employed and it does frighten me sometimes.
ReplyDeleteChania I consider myself VERY fortunate that Mr SVJ has a good job....To be PERFECTLY honest I wouldn't be able to do what I do if it wasn't for his regular income....Mind you, if anything happened with 'us', I would need to go back into the workforce....!!!!!
DeleteI hope in a couple of years this is NOT the case & my business pays a wage....Doesn't need to be a big wage....Just one that allows me some financial security....!!
Fingers crossed....!!!!!
Cheers,
Tamarah :o)
Price of having a business like this? Thousands!
ReplyDeletePrice of waking up every day, happy with what you are doing, and being able to 'be there' for your kids? Priceless!
Thank goodness for the customers who keep buying our stuff to make it all possible!
Enjoy your weekend!
Kris of Cricket Acres Studio & BarnLoft
So true Kris....So very....VERY TRUE....!!!!!
DeleteI had an AWESOME weekend my Friend....Hope yours was a BEAUTY....!!
Cheers,
Tamarah :o)
I always tell people it's a hard way to make a living. "Living." snort. Sure, there are people actually making a living at it and my husband and I are just embarking on the adventure of supplementing his retirement. But I've been reselling for 13-14 years. We're just stepping it up several notches.
ReplyDeleteI'll never understand the resellers who only double the cost of an item. Or not even that. My husband is one who says he's happy he made $10 of something that cost him $25. Sure, $10 is $10 is $10 no matter which way you look at it, but.... oh, it gets too confusing for me and makes my head hurt!
Anyway, thanks for sharing that. Hope you don't mind if I link to the post on my Facebook page.
Heya Wanda....!
DeleteBy all means Lovey....I'm happy for you to share the link....!!!!!
Oh yeas.....I hear you loud & clear....I know people in the biz who charge LESS for items they've found on the side because it was 'free'....Yet they've spent TRIPLE the time repairing & cleaning than they do on other items they've paid for....**shakes head**....
I hope you & your hubby had a GREAT weekend....!!!!!
Cheers for now,
Tamarah :o)
Wow, it's expensive to live in OZ. But then again, I'm not trying to replace a full time income either. I like not having it be a JOB just yet. I'm still having fun. Our tax laws may be a bit different in the US than Oz. For example, we cannot deduct areas of our house that have any "other" purpose. For example if my computer is also in my guest room, Not deductible. Therefore it's not a business expense. If however, the room is designated for business, I can deduct it based on percentage of house and also the associated utilities of that space. I have a hard and fast rule, I do not pay for storage. Things in storage don't sell. A large shed in the back yard can take care of that problem for a fraction of the cost. Insurance on the vehicle as well as Gas is based on percentage of use based on miles driven again, figured on taxes. Your online selling expenses seem kinda high, but that may include your postage fees which I separate out. Looks like you've done your homework. I've always said, the only way to make money is to know what it truly costs. Thanks for the insight.
ReplyDeleteHey Margo....!
DeleteMy office is used PURELY for business & falls well within the boundaries of what's claimable here....Alas, we reside in a townhouse with limited storage & a TINY backyard....With the amount of large pieces I have coming & going at any one time, it's neither appropriate or feasible to have our home function as a 'midway point'....Enough stock passes through here as it is & it DOES MY OCD HEAD IN to have it cluttering up our living area....I'd almost give a kidney for a barn....**wink**.... :o) !!
And NO....Postage fees were not included in my figures....It was based on the fees calculated on the amount of sales I had + a projection of future sales over a 12 month period....!
Just to clarify, I have THREE spaces in Antique Malls hence the HEFTY rental quoted....!!
Cheers,
Tamarah :o)
I'm still amazed at the costs, but that's the diff between Oz and Here I guess. Your rent just blew me away. Reminds me of this sign I once saw. Goes something like this.
DeleteI found it,
Hauled it,
Cleaned it,
repaired it,
refinished it,
Painted it,
Hauled it again,
Displayed it, and...
you want to pay what for it????
There are lots of associated costs that the consumer does not necessarily consider. Keep up the good work, looks like you are taking it all very seriously and that means you will succeed. Now You have a kidney and I have a barn, maybe we can strike a deal ;)
That's definitely sobering! But I'm glad you can say that you're doing something you love, and I think if you stick with it, you will be able to pay yourself.
ReplyDeleteThat's the PLAN Suzanne....I was NEVER half so alive working in an office as I am now....Thank HEAVENS for junk hey....**wink**....!!
DeleteCheers,
Tamarah :o)
Great post Tammy. I am going through the same process at the moment and it actually has made me appreciate how hard I work. It makes me feel much more confident about pricing services appropriately and having high expectations. The cold hard facts really opened my eyes!
ReplyDeleteOh wow! I so wish this could be a business for me! You're inspiring!!
ReplyDeleteTracy