How can a small shop survive in Manhattan,NY with a rent of 5k per month ? - page 2.

Lucius

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Quote from: The Sceptical Chymist on May 12, 2020, 08:37:24 AM

Edit: OP gets 1 merit for showing a pic of the city, which makes me want to take a trip back there one of these days.

I don't know when this picture was taken, but I'm honestly amazed by the amount of garbage visible on the sidewalk and the road, maybe the city's cleanup services were on strike or is that something normal for NY? To me personally this does not look touristically attractive...

Quote from: spy100 on May 11, 2020, 10:49:33 AM

How can a small shop survive in Manhattan,NY with a rent of min 5k per month ? i just can't figure it out ...

You have already received your answer, but I would add that many such shops actually serve as a screen for some other illegal business. It's about the USA after all, watch a mafia movie and it will be clearer to you Wink

suchmoon

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Does that particular place really cost $5k a month? Seems excessive for 125th Ave (Harlem?).

Having said that, two locations a block away from each other can have vastly different costs. It's all about foot traffic. If the rent is $5k then it means there's a demand for it and it's worth that much for the business occupying it.

plvbob0070

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Starting a business requires a good location. A place with expensive rent means that the location is good enough for a business. Do you think shop owners would agree to pay expensive rent if they are not earning enough?

I may not be familiar with the place and the shops in that place, but maybe there's quite a lot of various shops there where people love to go shopping. They won't stay there if they are not earning there. It only means that their revenues can handle all of their expenses (rent, utilities, and salaries). And that's how business works. The more people go to that place, the higher its demand for business renting. So, of course, the owner can increase the price of renting there.

I don't think I need to do math or any computations but that's how it works. Even in malls, rent expense there is expensive because it's a good place where people go to spend their money. Same thing for this place.

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The demand is too high I guess. They wouldn't last for a year if they cant get much in return. The rent was high due to the location and probably they are selling much more than $10K a month.

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Quote from: spy100 on May 11, 2020, 10:49:33 AM

5000 / 5 = 1000 customers monthly needed just to pay rent ,not including utilities ,salaries,stock ,advertising etc ...How do you think they survive and make a profit ?

You make it sound like a lot when in fact it's pretty low

1000 customers a month means 33 customers per day or two customers per hour or one customer every 30 minutes. For example, the largest McDonalds here has on average 2k customers a day, with the smallest one only 600, multiply this by the 4-5 euro average order and you're going to realize 5k is nothing.

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I don't think it's right to underestimate the capacity of that "small shop" you are talking about. If it stays in that rented space for a long time surely means it's profitable. No one is stupid enough to continually invest in something that loses in the long term, that's just outrageous.

Quote from: The Sceptical Chymist on May 12, 2020, 08:37:24 AM

There was a member who was going to start up some kind of crypto arcade/coffee shop thing in NYC a few months ago. I wonder what happened to him and his idea?

Being in a coffee shop or arcade place that is crypto themed would be fun. Not a bad venture, I guess?

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Quote from: exstasie on May 11, 2020, 05:35:40 PM

It's one of the largest and densest cities in the world. The obvious answer is they have incredibly high transaction volume.

That's definitely part of it. And I would assume for small business owners, they rely a lot on business loans in addition to cash flow.

I haven't been to NYC in quite a few years, but I recall being amazed at how many little mom-and-pop stores there were, selling everything from music to antiques to any number of things. My guess is that those kinds of shops also have some kind of online presence and don't rely exclusively on foot traffic sales.

There was a member who was going to start up some kind of crypto arcade/coffee shop thing in NYC a few months ago. I wonder what happened to him and his idea?

Edit: OP gets 1 merit for showing a pic of the city, which makes me want to take a trip back there one of these days.

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Quote from: Upgrade00 on May 12, 2020, 07:48:43 AM

snipped-
•Rebranding your store: improving customer service, reaching out to a new customer base (such as accepting Bitcoin payments to attract crypto enthusiasts)
•Introducing new products: upgrading your recipe or introducing new items
•Leveraging on the internet to attract more customers: rather than waiting for customers to come to you, you can take your business to them, using; SEM and SEO tools.
These are just some of the ways one can keep such a business thriving.

Perfect suggestions, businesses are like a gamble where there is a possibility of winning but also a chance of losing. However, it is a risk that every business person takes for him to gain profit. Even top companies they experience the same as a matter of fact, small businesses may find it more difficult on how to gain profit out of the expenses.

The first thing that a business person would do before putting up a business in a certain location is conducting an ocular and checking the marketability of the area for their product before pushing with the plan aside for other promotion and marketing strategies that are already waiting to be executed.

Upgrade00

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Quote from: spy100 on May 11, 2020, 10:49:33 AM

Both sell similar products at avg product price of 5 usd

If the location is a densely populated area with lots of customers eating out then both businesses can survive, but if not, one may have to diversify or improve. Selling the exact same product with a neighboring store means competition.

•Rebranding your store: improving customer service, reaching out to a new customer base (such as accepting Bitcoin payments to attract crypto enthusiasts)
•Introducing new products: upgrading your recipe or introducing new items
•Leveraging on the internet to attract more customers: rather than waiting for customers to come to you, you can take your business to them, using; SEM and SEO tools.
These are just some of the ways one can keep such a business thriving.

avikz

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Bro, the reason is very simple! The businesses are getting enough number of customers which make it up for them. Every new business starts with a target customer base and if they can successfully attract the targeted customer base to their business, they sustain or otherwise they stop operating. It's simple!

From you example, I will remove Subway because they are a global brand and then don't operate as per a stand alone business. Subway usually operates state wise and look at the profitability accordingly, unlike standalone shops. But if you see that standalone shops are surviving with 5k rent, they definitely get such volume to sustain.

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Quote from: exstasie on May 11, 2020, 05:35:40 PM

It's one of the largest and densest cities in the world. The obvious answer is they have incredibly high transaction volume. The fast food restaurants you're looking at probably deal with several hundred customers a day, or at least they did before the pandemic.

High overheads like rent are also factored into the prices. A burger that costs you $3 out in the suburbs could cost you $8 in Manhattan. Everything costs more in the city.

In some places, some will use the relatively expensive foods or things as an opportunity to get the cheap ones down to the location and sell on things like "motorized hawkers" or cheap stores (probably in special places reserved for them). I guess an expensive city will make provision for stuff like that for people who wish to eat/drink cheap.
. I usually get surprised when I find cheap regular food being sold so expensive in a city. I hardly buy them especially if they are of thesame quality or size. I look for the cheap ones

exstasie

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It's one of the largest and densest cities in the world. The obvious answer is they have incredibly high transaction volume. The fast food restaurants you're looking at probably deal with several hundred customers a day, or at least they did before the pandemic.

High overheads like rent are also factored into the prices. A burger that costs you $3 out in the suburbs could cost you $8 in Manhattan. Everything costs more in the city.

spy100

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How can a small shop survive in Manhattan,NY with a rent of min 5k per month ? i just can't figure it out ...

Let's take this example, 2 fast foods next to each other

Both sell similar products at avg product price of 5 usd

Both pay rent 5000 usd month

5000 / 5 = 1000 customers monthly needed just to pay rent ,not including utilities ,salaries,stock ,advertising etc ...How do you think they survive and make a profit ?

Topic: How can a small shop survive in Manhattan,NY with a rent of 5k per month ? - page 2. (Read 398 times)