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  1. #1

    Goofy How do I know how much rent I can afford?

    How do I know how much rent I can afford? Thanks for helping.

  2. #2
    Join Date
    Feb 2007
    Location
    Washington state
    Posts
    1,415

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    Great question. Fill out all of your income projections and be conservative as it says. Next fill out all of the operating expenses but skip rent. Now look at the bottom line for each year. Let's say in your first year of the shop there is $28,000 leftover. Generally and roughly speaking at this point know that out of $28,000 you have to pay rent and what is left over is your personal income if you did not already state and included a wage for yourself as salaries in the included operating expenses. Make sense?

  3. #3
    Join Date
    Jun 2017
    Posts
    102

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    That's what I am doing, I absolutely love (and understand!!!) this spreadsheet. It gave me my range of rents, and all I had to do was change my service fees by raising them $1 from my estimate and it covered the cost!! I would have never ever in lifetimes had been able to do this and I did it in 5 minutes. Paws up!

  4. #4

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    Awesome I see that conservatively now I can afford $600 to $900 and get the pay from the business I want, but $1,200 is more likely around here, so that's why I have lots of savings for the first year so that extra rent is covered in a sense, as I won't take all the pay to compensate for spending $1,200. Thank you for this tool, I got it. I would never been able to figure this so easily.

  5. #5
    Join Date
    Jul 2017
    Posts
    79

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    Quote Originally Posted by Stephen View Post
    Great question. Fill out all of your income projections and be conservative as it says. Next fill out all of the operating expenses but skip rent. Now look at the bottom line for each year. Let's say in your first year of the shop there is $28,000 leftover. Generally and roughly speaking at this point know that out of $28,000 you have to pay rent and what is left over is your personal income if you did not already state and included a wage for yourself as salaries in the included operating expenses. Make sense?
    THIS is exactly the advice we followed too.

  6. #6
    Join Date
    Apr 2012
    Location
    Kansas
    Posts
    658

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    Quote Originally Posted by Stephen View Post
    Great question. Fill out all of your income projections and be conservative as it says. Next fill out all of the operating expenses but skip rent. Now look at the bottom line for each year. Let's say in your first year of the shop there is $28,000 leftover. Generally and roughly speaking at this point know that out of $28,000 you have to pay rent and what is left over is your personal income if you did not already state and included a wage for yourself as salaries in the included operating expenses. Make sense?
    That's how I did it instead of rent though the rent figure was what I could afford for my maximum mobile vehicle loan, worked out great.

  7. #7
    Join Date
    Aug 2017
    Posts
    143

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    I agree. Here is what we did. We projected income low and expenses higher than expected just to be conservative, we did not put rent amount in. Once you are at that point, look how much is left over each month in the Month 1 to Month 12 columns. If you didn't put in your wages that left over is yours, and rent. So put in rent now and see what is left over. You have to live off that, if not enough, can you lower rent? Realize it is usually very tight for the first 6 months or longer if startup. We are showing a modest loss the first 4 months, but maybe we will grow faster but not counting on it. We use our savings those months to cover any loss. We are delaying our opening to February next year to give us time to fix the place up, and be ready for Spring business as it warms quick here.

  8. #8

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    I think by doing a plan for a shop it has me thinking about going mobile. I am pretty good with basic car for vehicles and my brother is a mechanic. The other brother is an electrician so he was going to help with the shop. Either way nice family help. I can pay back with dog care. I am going to try a mobile style plan now. It's a big decision. Rents are very expensive here, more than twice a vehicle payment for a new van. But looking at used anyway, something 3 to 5 years old. Brother can help, he knows RV maintenance. Its a family affair.

  9. #9
    Join Date
    Jul 2017
    Posts
    79

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    Have you made a decision Anything?

  10. #10

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    Been so busy I am catching up here. BOTH! With my plan I bought a small but profitable grooming shop and the owner was under pressure to sell. We paid less than $10K and that included about 100 customers that nearly all have stayed. All the plumbing, lighting and equipment was in pretty good shape. But we invested about $8K in curb appeal, floor improvements, new tubs and ceiling tiles. Looks amazingly better. We put Internet in for accounting in the cloud and a small office. Rent is less than $700 with water.

    We went MOBILE TOO! Yippe. We got a used Wag'n Tails and cleaned her up well. What is nice is that scheduling for the mobile is also in the shop. No bothering the mobile groomer and having the groomer to listen to messages at the end of the day.

    Customers love the choice. Everyone understands it costs more, and we prefer mobile customers continue to be mobile only. Well at some time mobile will be pretty much booked year round. So get on the mobile regularly now to hold your space. We adjusted the business plan for mobile grooming vs shop grooming services. We are doing really really well offering both. Buying the existing business even with just 100 regulars has given us more than enough regular cash flow right upfront. We are already well ahead paying off $20K we borrowed. Way ahead, it should be paid off in about a year now.

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