It may be then that the biz IS turning a profit in that since they are not applying the rent to the cost of operations yet. The $800 adds a pretty big nut.
It may be profiting to *them* as of this second, since they're partners and there is no rent involved.
I would press ahead, and get the financials. See exactly what the costs are. Check out ALL the contracts (insurance, games, internet, etc.) Can you shave those costs, do you need internet for example? Can you replace the phone lines with a cell line and use the same line for your own home phone? Can you get cheaper insurance?
You always want to estimate high when getting expenditures. Here's the general breakdown:
$800 - rent
$80 - property tax
$50 - insurance
$250 - electricity
$60 - telephone
$60 - T1 line
$300 - oil (heat) but only during the cold months
and I'm sure I'm forgetting something in there.
4. You say you would need to cover the expenditures for 6mo which makes it sound like the biz is NOT turning even a $1 profit per/mo.
Most businesses don't start turning a profit until they're well established. As this has just gotten off the ground six weeks ago, they've got a ways to go.
- This may have been the most misleading thing in the article, note it is to THIER benefit to have that statement in the article as it generates more interest in the town, that is a pretty big jump for a reported to make all on his/her own:
"Though he declined to open up his books, Koloski said Jester's Court already is turning a profit. With his own finances taken care of and a profitable system in place, Koloski said it's time to bring in a new owner and move on."
I would press him on this and find out EXACTLY what they meant. It is a warning flag if it is not true.
They're generally disappointed with the way the article turned out. Some things have been stretched, some things have been completely omitted. Like the partner (Craig) isn't even MENTIONED in the article, yet there is a quote in the article that is his (I don't remember what one.)
The 'turning a profit' line in the article is terribly misleading as well. It implys that someone will just move in and already be raking in cash, hand over fist. Craig explained that's simply not the case.
In truth, 'turning a profit' in the business sense means that the business is self sufficeint. In the case of Nick, the reporter asked if he'd recouped his costs, and Nick replied yes, he had. Of course he had! There was a bare minimum of costs to *him* to begin with (about $500! The major costs so far have been to Craig, somewhere around $6,000. I don't think that's all *arcade* related, as the entire building is a project.
It's been open on and off for the last six weeks, due to comitments elsewhere. Don's been opening the place up at night (from about 3-8/9) sometimes three days a week, sometimes four.
Those probably are the best hours, unless you can get in on that bar traffic. Even if they don't "poke a hole" you should get runoff after hours.
You might consider early day-time (especially weekends) having catered parties ala Chuck E Cheeze to make use of the space during the day.
Actually, there's a non-competion clause in the lease regarding food, as to not compete with the place next door (which is owned by Nick). Some food is okay, ie chips, candy, soft drinks, but prepared foods - hamburgers, frys, is not.
BTW: Who the heck is Don?
I keep calling him that in my head. I meant Nick. Sorry!