MARKETPLACE
..
NEWSLETTER
How Muclt
PAGE 12, MAY 30, 1973
ARE
YOUR COSTS?
Many and many an operators doesn't know his operating costs. Does that sound strange?
Question around. You'll be surprised, when you get right down to the nitty-gritty, right
down to the basic facts, down to the actual and true cost of operating, how many opera-
tors don't know their cost of operation.
There are operators who have gone along for years on dime play. Prices of new equip't
have zoomed. Overhead has more than doubled. Taxes have been raised many, many times. In-
flation has deeply cut the value of the dime. But, there they are, still going ahead with
dime play just as if all costs, all salaries, all inflation stood still all these years.
I
Pick the best location of one of these operators and ask just exactly what it costs to
operate the juke box, the pinball, the cig machine. Of course, if he's the kind of opera-
tor who works out of his hip pocket, forget it. Time and legalities will take care of him.
But if he's a businessman who has neglected to follow thru on analyzing his actual costs,
you'll be very much surprised to learn he doesn't even know, or too much care, what you're
talking about. He just lumps intake. That's it.
For years "Marketplace" has urged operators to hire knowledgeable CPAs to help them to
better understand costs vs income. The average operator lumps his take and, if the take
was as good or better than last week or last month, believes he's made money. When he gets
finished paying most, not all, of his bills, plus paying for the few extras, the few sud-
den emrgencies that came up, his bank account is suddenly depleted. Down to zero.
,
How much does it cost the operator to just drive over to his best location with all of
today's traffic delays? How much of his, or his man's time, was spent in that location
servicing and collecting from the machines? Were there any repairs and how much more did
this cost in time, in parts? How much was taken out of each individual machine? Did he
make money, break even, or lose money in this location? How can he lump the entire collec-
tion and know the actual depreciation of each piece? Unless he can qualify all overhead
plus the cost of himself or his man vs the take, where does he actually stand as far as
this location is concerned?
Many and many an operator has suddenly and surprisingly discovered he wasn't even break-
ing even in what he tho't was his best location after he actually added up all costs and
charged these against gross intake. Found, instead, that a smaller location, one he was
indifferent about, actually earned him more money.
Have you figured your costs? All
to drive to a location until you're
betcha me you'll change to "2-Bits"
of all, eliminate the outworn 50/50
your costs? From the moment you get behind the wheel
finished servicing that location? If and when you do,
play, drive hard to get a "service charge" and, most
commission basis.