Financial Data

Our party store owners offer their customers merchandise of exceptional value at a very low fixed price. This low price point creates an impulse shopping experience. We hear comments daily from prospective clients, like yourself, about their experience in shopping dollar stores and how they go into a new store to investigate and leave having spent forty to seventy dollars . The combination of exceptional value at incredibly low prices have made Party Stores the fastest growing retail segment in recent years. Profitability, of course, depends on many variables. The location, the cost and variety of merchandise, and the management skill of the owner are just a few of the many factors that will ultimately determine the level of profit.

Profit Projection Worksheet

Printable MS Excel Profit Worksheet

Your net profit is calculated by subtracting your total costs from your sales. Before you open a business we can help you estimate the costs you will incur running your business, this will allow you to project the sales volume you will require and make good decisions regarding the location and size of your store to ensure your success.

You can use the worksheet below to project the level of sales your store would need to reach to achieve a range of profit levels. If you have any questions one of our representatives would be happy to help you work through the process.

Components of Calculation

Sales – Using the costs you provide we will calculate the sales figures needed to reach profitability.
Variable Costs – While we Provide Average Sample Costs for common variable cost categories, it is wise to research each of these items for your area during the planning phase.
Fixed Costs – While we Provide Average Sample Costs, it is wise to research each of these items for your area during the planning phase.

Sales

Sales per square foot will vary from location to location and from store owner to storeowner based on many factors. The size of the community, general customer traffic of the shopping center, store location, proximity to the anchor, previous business ownership, management and merchandising experience of the owner, and personal daily involvement of the store owner are just a few examples of the variables that will determine your level of sales. The business skill and experience of each owner, along with the level of involvement in and commitment to their store will have an impact on their success.

Variable Costs

Enter the costs which are driven by your level of sales. These are represented as a percentage of total sales. Enter percentages as whole numbers.

Cost Category	Cost Description	Average Cost Range	Estimated Cost Percentage
Merchandise	Store-owners will control their average cost of merchandise based on the suppliers they purchase from and the product mix they decide to put in the store. The average a cost of the merchandise orders we create to open most stores is typically between fifty-two and fifty-five cents per item on a store-wide basis. (Opening store orders take into account the geographical location of each store and freight and delivery time considerations, and are placed with the suppliers best situated to provide economical, timely stock replenishment. This helps each store a identify a group of suppliers best suited to serve them as they go forward.) Keep in mind that the average cost of merchandise for some departments runs at a higher average cost. For example, liquid Health and Beauty Aids (HBA) cost in the range of sixty-two to seventy-three cents per item, and jewelry costs range from thirty-five to fifty cents. If a store-owner decides to put a higher percentage of HBA in the store than we originally recommended, their average cost on a store wide basis will be higher.	39%-42%
Wages	Each client should strive to keep labor cost, including that of the owner and manager, in the range of 10 to not more than 13 percent of sales.	10-14%
Payroll Tax	Employer paid payroll taxes.	1%-1.6%
Workers Compensation	Workers Compensation, check with your state to find your rates.	.25%-.5%
Freight	This is usually discussed in terms of freight cost as a percentage of merchandise purchased. The store owner should try to keep the range of freight cost to merchandise purchased between 1 and 2 percent. Stores that are located in states where the population density is lower, such as Montana, Wyoming, Idaho, and North Dakota may realize slightly higher costs due to the infrequency of truck routes.	1%-2%
Total Variable Cost

Fixed Costs

Enter your Costs which generally remain the same from month to month independent of sales, this includes salary and rent.

Cost Category	Cost Description	Average Cost Range For 1000 SQFT Store	Estimated Cost
Rent	Location rent set by the lease agreement.Local realtors will give you a good idea of the cost range.	$11,000-$19000
Manager or Owners Salary	Salary paid to Manager or to yourself as the owner.	$20,000
Health Insurance	Health insurance for your store manager.	$100
Business Insurance	General business coverage and includes public liability, fixed articles, theft, and other coverage. Contact a local insurance agent for quotes.	$1,200-$1,600
Electric Utilities	The local power company can give you estimates of electric cost for retail establishments by square foot.	$1,300-$1,600
Telephone/Internet Utilities	Your local phone company will give you insight into this nominal cost.	$500-$1000
Personnel	This typically includes items such as pizzas once a month and a year end party. Determine what you would like to do for your employees..	$700-$1300
Supplies	Office and store supplies. Pens, tape, paper, printer cartridges, and like items.	$600-1,000
Advertising	Routine advertising is always recommended to keep your store in front of the public. The local newspaper will provide various rates and programs.	$1,000-$1,800
Depreciation	Periodic write-off of capital cost items. Your local accountant can provide further information.	$3,000-$5,800
Other Expenses	Catch-all for other costs that pertain to your business operation.	$100-$1000
Total Fixed Costs	Annual set costs.

*This example of key fixed cost categories is not intended to be complete and should be used for general information purposes. It is always prudent to do your homework and develop a range of cost levels that can be used for financial planning purposes.

Automatic Calculator

To calculate the break even sales amount automatically as well as sales amounts required to reach various levels of profit, just enter your cost numbers above. The sales amounts below will automatically update, or you may hit Calculate to refresh the calculations.

Profit Percentage	Profit Amount	Sales Per Year	Sales Per Day	Sales Per Hour
Break Even
5%
10%
15%
20%
25%
30%

*This worksheet is intended for educational purposes only. Contact one of our financing experts to get professional guidance regarding industry best practices and profit projection techniques.