I took a little trip up
Business 1: New Aurora Krispy Kreme Doughnuts - Fad or the real deal
Believe it or not, there are at least 5 places to get doughnuts within a few blocks either direction from the Aurora Krispy Kreme. Two of which are stand alone doughnut shops and I’ll bet both are a little nervous.
My gut tel
Through my research I found that each Krispy Kreme cost about $2 Million to open. There is a $40,000 non refundable fee and 4.5% royalties on sales. The machine to make the doughnuts alone costs $350,000.
The Issaquah Store had sales of $450,000 in the first
week. From the looks of things when I
went by the
Profits for the
Business 2: Money Tree Stores – bit of a dirty business, but they fill a need
Call it a mobsters business, hard money lending, praying on those who are down and out and need the money now to spend it at the tavern, but the truth is the check cashing business is no doubt a cash cow.
The model is simple. Think of a crafty name like “Money Tree,” lease some space in a washed up strip mall on the side of Aurora of Lake City way, advertise a bit, and walla – you have your own little cash machine.
Essentially, you provide pay day loans to folks who can’t wait for their paycheck. The fee is simple, generally a flat 10%. Most of the time the criteria is you must get paid within one month of receiving the loan. This provides money tree with a nice 120% return each year on the money lent. The problem is the business tends to deal with a few shady folks that don’t always pay you back. Some you can never find and some you must go through the trouble of garnishing future wages to get the loan back. But here are the numbers: 100 customers per day x $500 average loan size x 10% fee = $5,000 day in fees, 6 days a week or about $260,000 annually. If you collect on 75% of the loans that is a profit of $195,000 annually.
This one is my favorite.
The Aurora Lincoln towing runs about 15 trucks each at an average of 12
hours a day (some run around the clock) and can tow one car an hour at a charge
of $140 per vehicle for a total of around $25,000 per day. Here is my favorite part: If you don’t go get your car after one month,
Annual revenue will be around:
(25,000 x 365) + (150 x 180 x 52) = 912,500 + 4,680,000 = $ 5.6 Million in revenue. The trucks are expensive and the impound yard is large with high property taxes. I am guessing margins are still at around 20% so profit is at least $1,000,000 annually.
Business 4: Countrywide Mortgage – the peak of the market?
I doubt any business has benefited from recent economic
conditions better than the mortgage brokers.
The little Countrywide Mortgage office in the
The total revenue is 2000 x 3 x 20 x 52 = $6,240,000. The payout to the brokers is around 40% with benefits, training, and base salaries. This gives the owner about $2.5 Million annually to cover fixed costs. I have heard of other mortgage brokerage firm owners making nearly $350,000 a month. The problem is this easy money will not last much longer once rates rise and the refi boom ends. I hope they are taking some of this windfall profit and setting up some sort of hedge against the inevitable assent ion of interest rates.
Business 5: Les Schwab Tires – the necessities of life
Car ownership seems inevitable in