How high is your overhead?

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user 26

Well-known member
Jun 2, 2008
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not asking for your $$ amounts so much as ...
my overhead is SO high ... i make ends meet but no money left over. my partner can't believe or understand even when i show her the books.
is this common or am i doing something wrong? i can't seem to get the money going OUT to come down.
I haven't calculated this yet because we're so new & we've had to pay so many repairs and other problems that weren't planned for in the last few months. I think I'd be too depressed! You know that "they" say that it takes about 2 years for a small business to start running in the black though.
I think that's common in this business - our expenses last year were about 77% of our income. That's both fixed and variable expenses. It will be higher this year; our taxes are up significantly and our variable costs (mostly food) are up about 10%. We didn't raise our rates this year, either.
I'm new, so 100%.
Once I get rack cards, room signs, renovations 100% complete, then I hope it will be less, but for now I spend what comes in on getting up and running.
seashanty said:
my overhead is SO high ...
I know it's not funny, since your partner wants to sell and all, but it feels like the opener for a joke. As in:
...My overhead is SO high that it gets altitude sickness.
...My overhead is SO high that it makes the Sears tower look like a bungalo.
...My overhead is SO high that it won't sober up for months.

Tell your partner she should try to do this for a year - she probably would not last the year.
Non-controlable expenses that are also your biggest chunks - insurance an taxes! There is absolutely nothing you can do to make that less. Next expense is under your control to a point - advertising but no advertising, no business. List on the expensive Directories only if you are hoping to have guests - otherwise tossing your money down the rathole of inexpensive directories is fine.
Cut back on the quality of the food served - and watch the occupancy rates dwindle. Use cheaper linens? Fine, just be prepared to replace them every year if not more often.
It is a Catch-22. Period!
In all of our 7 years in business, we only made a teeny tiney profit one year..our last one!!!!
This partner needs to be hands on for a couple of months. Throw them the anker and see if you will need to toss them the life jacket. With everything going up - (advertising, energy prices, food, etc.) and the fuel prices taking the toll on travelers expenses I do not know how your partner can not understand! If you raise your rates, you most likely will reduce your occupancy rate.
Next time the subject comes up - hand over the books and say: Please fix it great and powerful OZ.
Black, Red ... it is all a blurr. Money in and money out ... Right now we are making enough to eat and even enjoy going out for lunch every second week with the ex-pat lunch bunch. Or are we?
Bills like electricity, phone, etc are getting paid, and we find we do a bit of rob Peter to pay Paul juggling. We are only 6 1/2 months old. Hopefully we will one day (guess I should say year) be in the black, but right now we are not stressing over it (well not much). Yes, we are wearing our rose coloured glasses, our Suzy Sunshine smiles and living life day to day. One day Peter is going to say back off and give me my money back!
We built (renovated) our dream house, we do not plan on ever moving (older age may decide that later), so I think our circumstances are different. When this business gets the better of us, we will cross that money bridge when we come to it. Maybe sell and put ourselves on a cruise ship.