Are you like me, in that you often look at a business (a shop, a restaurant, a barber) and wonder what’s their real business model, i.e. how do the business earn money?
Sometimes, I look at a hawker store and wonder how do they do it? How do they earn enough money to cover the rent and all its operation cost, just by selling low cost bowls of noodles and toppings.
My mind quickly goes into the math: rent will cost $X, staffing cost will be $Y, miscellaneous operational will cost $Z, then they would need to make $A for the whole month, and break that down by day and you need $B in revenue daily. With AOV of $C, the shop needs to sell #D bowls daily. (I’ve been trying to calculate an estimate cost analysis for a small business and hope to share it soon.)
The same equation works for fashion boutiques in shopping malls, electronic shops, speciality shops, service-related shops like hair saloon, photography, etc.
From running my own business, I begin to understand the complexity of the entire eco-system and how every part works individually and yet needs to comes together successfully for the entire business to run efficiently and profitably.
I am then thankful for the many service staff that serve us, the logistics personnel that move products around, the cleaners to help us clear up after. Every member of the entire business process matters, because every little details counts.