Coffee_Boy
New member
I am wondering what percentage of SALES should your TOTAL rent be?
Rent %
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newcoffeegal
New member
Hello,
My biggest piece of advice is not to pay a percentage for your rent. In the beginning, 5 or 10% of your total sales for rent is a great idea, because when you are first starting out you aren't making a ton of profits. By paying your percentage, you save some $$$ up front. But what happens when your total sales take a jump? So does your rent, and the people you are renting from now know exactly how much money you are making with your successful coffee stand. They then decide that when your lease is up, they will go into the coffee business for themselves, because they see how much money you are making. You should always, as a rule of thumb, pay a $$$ amount for your rent. I have seen and heard of too many small coffee businesses being driven out of their locations when the landlords get greedy and decide to get into the coffee business themselves, leaving you out in the cold. Good luck!!
My biggest piece of advice is not to pay a percentage for your rent. In the beginning, 5 or 10% of your total sales for rent is a great idea, because when you are first starting out you aren't making a ton of profits. By paying your percentage, you save some $$$ up front. But what happens when your total sales take a jump? So does your rent, and the people you are renting from now know exactly how much money you are making with your successful coffee stand. They then decide that when your lease is up, they will go into the coffee business for themselves, because they see how much money you are making. You should always, as a rule of thumb, pay a $$$ amount for your rent. I have seen and heard of too many small coffee businesses being driven out of their locations when the landlords get greedy and decide to get into the coffee business themselves, leaving you out in the cold. Good luck!!
OP
Coffee_Boy
New member
- Thread Starter
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Re:rent
Thanks for the reply...I think you misunderstood my question.
I am not thinking of paying a perscentage for rent...I am trying to evaluate if the rent I am looking at is too mucH? so I wondered what percentage of your gross sales should rent be? any feedback would be great.
thanks
Thanks for the reply...I think you misunderstood my question.
I am not thinking of paying a perscentage for rent...I am trying to evaluate if the rent I am looking at is too mucH? so I wondered what percentage of your gross sales should rent be? any feedback would be great.
thanks
cafemakers
Member
Coffee_Boy said:
Zero, if possible!
5-7% of gross revenue is acceptable; much more than 10% and I would thoroughly review unique features of the site (e.g. traits of the location that may increase net profitability, thus changing the meaning of the ratio) or the value of some other non-monetary benefit.
Best,
Andrew
