Dear Dave, what if my occupancy and payroll costs are higher than ideal?

By Steve Frothingham

Editor’s note: David DeKeyser and his wife Rebecca Cleveland owned and operated The Bike Hub in De Pere, Wisconsin, for nearly 18 years. Last year, they sold the business and real estate to another retailer based in a nearby community. In last week’s Positive Spin column, David wrote “What you pay for your storefront and everything related (such as taxes, utilities etc.) should typically be under 10%. Your payroll expenses should be about 25% including owners’ wages.”

Many retailers find those levels unattainable in their market and have asked what they can do. We summarized those concerns in a fictional retailer’s question this week. If you have more questions about retail profitability, email Dave at David@nbda.com, and he may answer them in a future column.

Dear David,

I read your first columns avidly and I’ve examined the NBDA’s Cost of Doing Business reports. I find that in my market, it’s simply not possible to keep storefront costs under 10% and payroll under 25% of revenues. The cost of real estate and cost of living here is much higher than in Green Bay, it’s fair to say. So, with that reality, what should I do?

Logically, it seems like there …read more

Via:: Bicycle Retailer and Industry News