Anyone notice network shutdowns?

[DLgal]

Unfortunately, that is BEFORE expenses.

You overestimate the expenses of small shop. It's not that much. She probably clears $500k easily with sales that high.

 

[tvguy]

You overestimate the expenses of small shop. It's not that much. She probably clears $500k easily with sales that high.

I don't know, but I think you under estimate the cost of rent, salaries and taxes.

 

[DLgal]

I don't know, but I think you under estimate the cost of rent, salaries and taxes.

Not really. I have looked into running a small business and even developed a business plan. Even in my expensive city, monthly sales that high would net a massive profit for the majority of business owners.

 

[tvguy]

Not really. I have looked into running a small business and even developed a business plan. Even in my expensive city, monthly sales that high would net a massive profit for the majority of business owners.

Only insight I have if from my mechanic. One man shop, his rent is $4,000 a month. So just the rent costs him $25 an hour divided over the 160 hours he is open in a month. His current shop rate is $100. And he doesn't always have 8 billable hours in a day. Utilities, insurance, and required licenses have to eat into that remaining $75 an hour pretty quickly. As he puts it, he puts food on the table, but will never get rich.

 

[mistysue]

The furthering of this cheese shop discussion just makes my point even more clearly- I'm intrigued by this idea of a small cheese and oil shop averaging just shy of $540 an hour in sales if they're open 10 hours a day for a 31-day month...

The more realistic scenario as that this small business owner has no concept of how much she's actually paying in credit card usage fees. At $5,000/month the reality is she would really be paying probably somewhere closer to 1-2%, meaning that estimate of 167,000 a month in sales would be more like $300,000-$500,000/month for her to be paying $5k in fees. That type of business making that much in cash on cheese and oils is absolutely selling products that people wouldn't buy if they had to have cash on them.

If a small cheese shop brings in anywhere close to $6million in sales most people are soon to discover they are in the wrong business.

 

[princesscinderella]

We have a business that most people pay by credit card and the fees usually run on average about 4%, there’s multiple percentages based on the type of card used and what rewards program it has. My statement every month is crazy with all the different percentages for the different types of cards. Amex is the most expensive, especially the platinum ones with strong rewards programs. That Discover one percent back or double bonuses for different categories all get taken out of the the merchant fees.

 

[Lilsia]

That's a crazy amount of sales. Those rates cap out under 3%, and usually go down as they charge more. Even at 3%, that means the cheese show is selling $167,000 in cheese per month.
While I get your overall point, one of my biggest pet peeves is how often small businesses exaggerate costs like this to make arguments.

But sales does not mean profit. If her profit margins are slim, that 3% could take up a big part of her profits. I am sure that as a business owner, you would rather have that 5K a month to live on or to pay your employees. And companies like this can't just keep raising prices.

 

[Lilsia]

We have a business that most people pay by credit card and the fees usually run on average about 4%, there’s multiple percentages based on the type of card used and what rewards program it has. My statement every month is crazy with all the different percentages for the different types of cards. Amex is the most expensive, especially the platinum ones with strong rewards programs. That Discover one percent back or double bonuses for different categories all get taken out of the the merchant fees.

Thank you for saying this. When I worked at my last job, they didn't take Discover because of the high merchant fees. We would get customers complaining about how they want to use their Discover card because of the cash back. We explained to them that the merchants pay that, not the card and almost every person was shocked to hear that. In food service, where the mark up is not as high as other things, it makes a difference. That is why a lot of mom and pop places that do take cards, have a minimum purchase with it.

 

[dreamin_disney]

Around here some small businesses charge a credit card fee. Luckily I go to bug businesses. I don’t feel like paying any extra money in fees.

i still need to go to the bank.probably do
50-$1’s
10-$5’s
10-$10’s
Does this sound like a good variety? Should I get more $1’s and 5’$

I already have a lot of $20’s, one $100 and two $50’s

 

[Twilghtsprkle]

The furthering of this cheese shop discussion just makes my point even more clearly- I'm intrigued by this idea of a small cheese and oil shop averaging just shy of $540 an hour in sales if they're open 10 hours a day for a 31-day month...

The more realistic scenario as that this small business owner has no concept of how much she's actually paying in credit card usage fees. At $5,000/month the reality is she would really be paying probably somewhere closer to 1-2%, meaning that estimate of 167,000 a month in sales would be more like $300,000-$500,000/month for her to be paying $5k in fees. That type of business making that much in cash on cheese and oils is absolutely selling products that people wouldn't buy if they had to have cash on them.

If a small cheese shop brings in anywhere close to $6million in sales most people are soon to discover they are in the wrong business.

There’s also studies that indicate that people who pay with a credit card spend more than those who pay in cash. It’s because of coupling. When you pay in cash you immediately know how much you spent because you see the cash leaving your hands. when you pay with a credit card you are disconnected or decoupled from that emotion. So it’s easier to spend that money and easier to overspend.
A fancy cheese shop sounds exactly like the type of place you want people to be decoupled from their spending to be honest. Making people pay in cash would probably lead to less impulse additions to purchases.

 

[SteveH]

I can't say I've seen an major CC network issues. The only ongoing one is our area Panda Express, they seem to have on going issues taking cash and even CC's - so much they tried forcing people to use Venmo - which was a hard no from me. It just wreaked of scam.

As for cash, I keep $100 with me and we keep $1000 in our house safe for emergencies.

CC Fees really are something screaming for regulation - it's not just the fees, its the add on's and confusion the industry creates. All those reward kick backs that you get... are on the back of the business not the CC company. Please help your small businesses and don't use your reward CCs - use a standard bank CC or Debit card.

 

[mistysue]

There’s also studies that indicate that people who pay with a credit card spend more than those who pay in cash. It’s because of coupling. When you pay in cash you immediately know how much you spent because you see the cash leaving your hands. when you pay with a credit card you are disconnected or decoupled from that emotion. So it’s easier to spend that money and easier to overspend.
A fancy cheese shop sounds exactly like the type of place you want people to be decoupled from their spending to be honest. Making people pay in cash would probably lead to less impulse additions to purchases.

EXACTLY. That type of shop is going to have a respectable markup and is selling things people paying with cash are going to re-think because we have these other shops called grocery stores where it costs half as much. They are thriving off the impulse "charge it" mindset.

 

[mistysue]

But sales does not mean profit. If her profit margins are slim, that 3% could take up a big part of her profits. I am sure that as a business owner, you would rather have that 5K a month to live on or to pay your employees. And companies like this can't just keep raising prices.

I know, I've run small businesses. It's why it irks me when others have no freaking clue what their actual business expenses are and then vent about it to people giving them false impressions. I have no doubt this person did not mention how low the percentage is when saying that she pays $5,000 a month in fees. Also consider that not all of this person's sales are going to be in credit cards in the first place, so if she wasn't outright lying about cost, we're talking about someone who's selling 3 to 6 million dollars a year in cheese IN ADDITION TO the cash sales.

 

[DisneyRobbie]

I went to Walgreens not to long ago and their network shut down. Computers and registers were down. I was next in line for my Rx so I walked up to the counter. The lights in the store flickered and you hear system shut down. Lights were still on but customers were told network shut down and they couldn’t process anything. We were told they didn’t know how long it would be and to check back in an hour. Workers looked shocked and kinda like what do we do now.

Today I went to my credit union. I haven’t been in there in years , maybe 8 years. My job has a program where employees can have money deducted into savings like Xmas or summer saver. Now that I got more hours and making more money, I decided to go in and have more money deducted into my summer saver. I walked in and the workers were walking around kinda confused. I asked do I need to sign in or get in line. I was told network/shut down. They can’t access any of the computers, accounts, ATM and coin machine tickets couldn’t be processed.

Got me thinking how much cash should I have at home in a safe place for emergencies , or in cases where just need cash for non emergency items and everyday cash to carry?
I normally use credit cards and pay off every month. I recently started carrying a $20 bill, but probably should carry smaller bills.

what do you do?
How much cash in house for emergency?
How much cash in house for none emergency?
How much cash to carry daily?
what bills?

before Covid I would cash in all my coins but now I hold onto it.

I had this issue happen to me at the Salt Lake City airport gas station. I was returning a rental car before my flight departed - the "system was down." I did have cash and they refused to use it. The "whole" system was down and they would not accept cash due to the system being down. Ugh. I had to drive off campus to find a gas station but fortunately did have plenty of time for my flight.

 

[DLgal]

Only insight I have if from my mechanic. One man shop, his rent is $4,000 a month. So just the rent costs him $25 an hour divided over the 160 hours he is open in a month. His current shop rate is $100. And he doesn't always have 8 billable hours in a day. Utilities, insurance, and required licenses have to eat into that remaining $75 an hour pretty quickly. As he puts it, he puts food on the table, but will never get rich.

Mechanics are called blue collar workers for a reason. You won't ever get rich doing that job.

 

[tvguy]

I know, I've run small businesses. It's why it irks me when others have no freaking clue what their actual business expenses are and then vent about it to people giving them false impressions. I have no doubt this person did not mention how low the percentage is when saying that she pays $5,000 a month in fees. Also consider that not all of this person's sales are going to be in credit cards in the first place, so if she wasn't outright lying about cost, we're talking about someone who's selling 3 to 6 million dollars a year in cheese IN ADDITION TO the cash sales.

They sell wine too, I suspect that is their big profit center. Given they get a statement EVERY month showing the credit card fees they have paid.......as has been noted above......not sure how they wouldn't know to the penny what they paid.

 

[DLgal]

They sell wine too, I suspect that is their big profit center. Given they get a statement EVERY month showing the credit card fees they have paid.......as has been noted above......not sure how they wouldn't know to the penny what they paid.

Just because she told you it's $5000/month doesn't mean that's true. It could have been $5000 ONE month and she is exaggerating to gain sympathy. I find that business owners do this a lot as a way to justify high prices. I find it off-putting. Your cost of doing business is not my problem. If you are not making enough money, close your business.

 

[tvguy]

Just because she told you it's $5000/month doesn't mean that's true. It could have been $5000 ONE month and she is exaggerating to gain sympathy. I find that business owners do this a lot as a way to justify high prices. I find it off-putting. Your cost of doing business is not my problem. If you are not making enough money, close your business.

I am constantly amazed how low the profit margin is for many businesses, they survive merely on volume. I guess she could be exaggerating, but her numbers seem in line with what other small business owners are reporting.

 

[tvguy]

Mechanics are called blue collar workers for a reason. You won't ever get rich doing that job.

And it is an expensive business to keep operating because so much of the test equipment is expensive. I donated a car to a High School auto shop, and the teacher said he wasn't sure how much longer it would be offered as a class in the public schools because of how expensive the equipment is.
Then you have the whole "right to repair" debate where manufacturers don't make repair instructions or parts available except to their dealers.

 

[DLgal]

I am constantly amazed how low the profit margin is for many businesses, they survive merely on volume. I guess she could be exaggerating, but her numbers seem in line with what other small business owners are reporting.

This is why I ultimately shelved the idea of running a small business. Way too much work for a very small profit. Not worth it.