Mobile Bus Conversion | Call 516-333-7483 | How Mobile Business Vehicle are the new trend in retail?
Channel: Major Vehicle Exchange
Date: 27/08/2021

Mobile Bus Conversion are a result of the Pandemic where many unemployed and underemployed Americans have left their jobs and businesses and are considering starting a new business or resurrecting their old one at a new place of business. Countless others are about to be evicted from their current business locations or could face bankruptcy in the near future. Operating a successful business involves the sale of a needed product or service that would be of value to an established or potential customer. If the product or service is not “valuable” then the business is unlikely to succeed and poor sales would lead to its collapse. Apart from “value” the product or service also has to be within a reasonable price range. If the price of goods and services is exorbitant compared to its competition and other online options then potential customers will shop elsewhere. If the margins are too low then the business wouldn’t be able to sustain itself in the long run. The entrepreneur and their team would lose their investment over time because there wouldn’t be any unique advantage for customers. Products and services have to be appropriately priced to maintain a good balance between what a customer “thinks” is a fair price to pay and what the business needs for its sustainability.

There are several factors that lead to the determination of the perfect price range a product or service should be sold. This should include the cost of raw materials and/or equipment, labor, electricity bills, insurance, taxes, rent, etc. The more the expenses, the higher will be the cost of the product or service that is being sold by a particular shop to achieve an economic “break-even” or profit. These expenses are often called “Overhead Costs”, and a business has to transfer these costs to the consumer in order to sustain itself and be sustainable. The typical customer ends up paying for all the “extras” that the business is offering even if he or she does not need it. For example, whenever customers walk into a boutique to purchase some apparel, they end up paying a fraction of the amount the business owner pays as rent to the shop owner. If somehow the rent could be reduced or eliminated, then the apparels would sell at a much lower rate than ever before. This would in turn leave more money in the consumer’s pockets leading to happier customers.

The amount of rent a business owner pays to the shop owner depends on 3 factors i.e. location, location, and location. The more exposure and leg traffic a shop gets, the higher rent it commands. For example, a shop at the entrance of a shopping mall or terminal exit may exceed $50 per sq foot annually whereas a shop of the same size just a few blocks away can cost just $20 per sq foot. So for a 300 sq feet shop, a business owner may have to spend $15,000 per year for rent if it’s located in a prime, densely populated area, whereas they could pay just $6000 per year if the same shop were to be located a few blocks away in a less desirable area. Ultimately, this rent has to be paid by the consumers and every product in inventory has to be effectively priced to make sure the overhead costs are fully absorbed by purchases from customers and not by the business owners.

Planning is an important aspect of every startup enterprise and every entrepreneur should fully consider the numbers. The challenge comes when the town, city of state authorities come and close your shop due to a “Pandemic” scare which is becoming more and more frequent these days than ever before. First, it was Bird Flu (2005), then after a few years came Swine Flu (2009), and then in 2020 came the worst pandemic known to humans in recent history in the form of “CoronaVirus”. The Government declared various degrees of lockdown for several months and people have been advised to maintain a social distance of at least 6 feet from each other. From a strictly business perspective, who can afford to pay rent and overhead in the thousands of dollars per month plus additional costs of doing business every month as discussed above if there is a substantial decline in business traffic and a more reluctant clientele to spend a diminishing amount of money? Regardless of the reason, the business owner has to cover the rent and other expenses every month out of their pocket even if there is a lockdown.

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