I have a small ice cream shop in a fast developing neighborhood.?

Question

I had gross sales near 300,000.00 my first year but still lost about 40K. Should I stick it out and what would be some determining factors to look at?

Answer 1

There's an old rule of thumb..if the first year in business you are in the black..it's been a banner year...if you've only taken a 25% of gross sales loss...you've had a good year. When you put together a small business plan for a loan from a bank..they typically expect you to figure in paying yourself out of THAT loan. That's an indicator of 1st year business expectations on the norm.
As for what to look for...the very fact you asked the question would give me pause. It's really not what other people are going to tell you. In your heart of hearts..do YOU feel this is going nowhere? Do YOU feel that the rough seas are done and smother (and more profitable) waters are ahead? If you're spending 50% of your time, or more, sitting in your business saying to yourself.."this sucks...where's the people...what's gone wrong" maybe it's time to A. cut your losses and book or B. revamp, overhaul and go for it. new advertsing...big lights at night...etc., etc.

Good luck.

Answer 2

You need to examine your operation closely. My company spent $30K to hire a guy to teach all employees Ownership Thinking. It's kind of complicated but basically what it boils down to is having everyone in the business be more conscious of what goes on.

We had certain goals like reducing expenses by $50K in a year. We made sure the ac was turned off at night, reduced paper usage, reduced shipping charges, negotiated with vendors for better rates, switched vendors, etc. and were able to save $100K in six months! As an incentive, all employees got a bonus for meeting our goal. Give this a try.

Answer 3

your original business plan should have been for a minimum of 3 years