On Friday, we signed the purchase agreement for Store #37.
We’ll take over on November 1st, then immediately start renovations.
We’re budgeting $225,000 to get the store up to our standards.
That includes remodeling the waiting room, adding another lift, signage, paint, repaving the parking lot, new equipment, and grand-opening marketing.
It’ll be our biggest conversion project yet.
That’s on top of buying the business and the real estate.
The scary part is committing all that cash, taking on $1M+ in debt, and then finding yourself working to pay everyone else with barely anything left over.
Or worse, having to put MORE money into the business just to keep it going.
I’m comfortable taking that risk because I know what numbers we need to hit and how to spot where we’re falling short.
There's a simple framework I follow.
It starts by breaking the P&L into just four expense categories: cost of goods, payroll, variable expenses, and fixed expenses.
Each has a target percentage. Then we compare our actual numbers against those targets:
When a location isn’t hitting its profit margin, we can see which categories need attention.
Then we can investigate:
- Are we discounting too much?
- Have supplier costs increased without us adjusting our prices?
- Are sales too low to spread our fixed costs across enough revenue?
- Is payroll too high because we’re overstaffed, or is overtime creeping up?
Each problem calls for a different fix. The numbers tell us where to look.
I expect # 37 to be a challenge. It's never smooth.
But what I want to avoid is losing money month after month without understanding why.
These targets help us create a clear action plan.
If you look at your P&L and still aren’t sure what to change, I created Where Is All My Profit? for you.
I show you how to simplify your P&L, set targets, identify the gaps, and decide what to fix first.
Cheers!
Brian