Gross Annual Sales

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Mike Labbe

Mike Labbe

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Grumble Monthly Survey & Discussion
What was your shop's gross annual sales figure for 2007?
Results are completely confidential and anonymous!​

VOTING IS CLOSED

In this survey, we are asking about a single retail location only.​

Discussion is heartily welcomed
RESULTS from previous TFG surveys: LINK TO RESULTS​

This survey is intended for framers, and is purely for entertainment and discussion. Your poll selections are anonymous, although discussion is public and encouraged. Results represent a small sample of the industry, and should NOT be used as a primary planning tool or business plan. ​
 
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I'm so glad to see this month's survey question. I think it's something we are all interested in but is something everyone dances around. The anonimity means that we can all participate without revealing too much! I would have liked to see an additional question - something like "how many people does it take to create that annual sales total (employees and working owners)?" And now another question pops into my mind - "were last years sales bigger or smaller than the previous year?" Any way, one out of three is good (in this case).

I read somewhere a long time ago that each worker/employer should generate $100,000 in sales - not necessarily personally; so a 4 person shop should have gross sales of $400,000. This is more a point of interest than a rule of thumb and I'm not even sure how accurate it is! Personally I haven't reached this target but it's something I'm aiming for.

Mike
 
I would have liked to see "how much up or down are your annual figures over the previous year?"
 
Mike, I too would have liked to see this survey possibly broken down a little further. Other information that could prove beneficial:

1.) Number of full time vs part time employees.

2.) Advertising dollars spent

3.) Framing sales vs gift lines, vs other product lines such as artist materials, digital imaging, etc.

4.) Annual rent.

5.) Annual sales per square foot.

I think the way the survey question is asked it is important that participants only respond with their total custom framing sales otherwise the data is somewhat meaningless.

:popc:
 
These can make great future polls, and some of them have also been done.

The new software has a "branching" feature. I can have it ask new questions based on how you answer current ones. This opens new possibilities.

The standard software we use for most polls only allows a single question, but the one used this month has a lot of flexibility.

I did initially have a second question in this poll "Was 2007 higher or lower than the previous year?", but I took it out. Rather than promote doom and gloom, I figured it best to keep it simple this time around.

Thanks for the feedback. It still should be interesting!

Mike

PS: The results are already interesting, in less than a day. We're seeing a clear pattern, and two distincts groups.
 
I have a theory that I have not been able to dispel or verify.
I have discussed it with a few people, but it goes like this ...

The majority of frameshops gross under 220k with a nice little bell curve under that number. Then, there is a big chasm with another bell curve starting at about 450k. (most of the BBs are actually sitting on the second hump)

Picture a two humped Camel. These should be looked at as single store numbers.

Why does it matter? Because there are clearly some "best practices" that "get you through the valley." If we can learn and understand them, more of us can cross!

Some things I've noticed:
  • First humpers tend to stay in their shops.
  • New shops are always first humpers, DUH! (how long are you "new")
  • One trick ponies seem to stay first humpers

  • Multi-store operations sometimes get to the second hump. Leveraging advertising/marketing?
  • Couponing and promos (BBs) can get to the second hump (I've seen this fail too, so it isn't clear if this is a "best practice" or an orthogonal activity.)
  • Second humpers have a low cost offering
  • Second humpers have been around a long time. Longevity enables logarithmic word-of-mouth?

* The presence or absence of finished corner frames seems to have no bearing on whether you are a first humper or a second humper.

Comments?
 
Also relevant is number of locations. If someone tells me their gross is $450K, that isn't quite as impressive spread out over 2 or 3 locations as it would be for a one-location shop.
 
I answered according to the one store that I've had for 10 years. The one I opened a year+ ago would take my average down a notch or two. Perhaps that would be a way for us multi store types to answer more accurately. In which case I'll need to change my answer.
 
framermike said:
I read somewhere a long time ago that each worker/employer should generate $100,000 in sales - not necessarily personally; so a 4 person shop should have gross sales of $400,000. This is more a point of interest than a rule of thumb and I'm not even sure how accurate it is! Personally I haven't reached this target but it's something I'm aiming for.

Mike
Click to expand...

There are a total of 12 of us in our shop (some part time). I can certainly dispel that $100.000 each notion right now! Even averaging the part timers, that would bring us down to about 10 full time if you count me, and I'm in and out of the shop all the time. Nope, still not accurate. I have an unscientific theory that as a framing business grows relatively large, the sales/profit per employee hour lessens. Perhaps this is because the owners are counted in the figure and the owners are swamped with business issues, R and D, marketing, clerical, and all the rest. Hmm....If this figure comes from a recent respected source, we have some work to do.

I want to know how many employees the two people who do 1.5 mil have.
 
I have heard the "100k/employee" maxim as well. However, I don't think it's any more helpful than "Business value = 2 x yearly profit".

Even if both were true, they can only ever be Averages or Means. I heard the "100k/emp" in a manufacturing environment, so maybe it's an overall, every industry, every size average. Also, I heard it 4 years ago and have to wonder when and where the person I heard it from got it. Maybe they heard it 5 years before that. Now you're looking at compounded inflation. Should it be 120k now? 150?

In addition, as you implied there is a curve. A one-man shop is probably not going to make what most would consider a "decent living" on 100k, but a million with 10 people would exceed most peoples' dreams.

FWIW, our sales are considerably more than 100k/employee. However, our COGS is also just about the inverse of yours, at about 70%. That's because we are moving a lot more material per man hour than a custom frame shop, and our direct labor is included in our COGS. I would expect a shop who buys/sells only closed corner frames would have a much higher COGS and revenue/employee than one who buys only box moulding.

I guess the bottom line is that I wouldn't pay any attention to the 100k/employee
 
Just looking at the survey results, maybe another survey that would be interesting to compare against the sales is compensation, including perks like auto, health insurance, retirement, ect for owners. Anonymous of course.

Would be interesting to see if the income levels have a bell curve like the gross sales.
 
Interesting to see that of 92 responses 52% of the shops are grossing under $150K. As many have said the survey does not qualify the respondents with additional parameters that would better qualify the results.
 
I don't know, Tim. Additional parameters probably would change much

This survey is similar to what we see in controlled studies
 
Poll Results

Here is what grumblers had for answers.

I'm not sure if it was due to all the negative comments, or if people are just shy, but only 105 folks participated in this survey. As such, the results shouldn't be taken too seriously. Just for fun...

Mike

gross2007.jpg

Note: Percentages are rounded
11% Under 50k for the year - 12
18% 50k - 99k - 19
20% 100k-149k - 21
14% 150k-199k - 15
06% 200k-249k - 6
06% 250k-299k - 6
06% 300k-349k - 6
01% 350k-399k - 1
01% 400k-449k - 1
03% 450k-499k - 3
08% 500k-749k - 9
03% 750k-999k - 3
01% 1mil-1.24mil - 1
01% 1.25mil-1.49mil - 1
03% Greater than 1.5 million - 3
 
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