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Some Number Crunches
July 26, 2012
9:26 pm
Jon Schnapp
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June 23, 2012
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While we're working towards making some decisions, I thought it might be helpful to see how some of the numbers work out. Here I've just done some real rough estimation. I found a site that provided some general idea of what liability insurance would cost and I used a middle-high end dollar amount. I also roughly guessed what rent would be (although many of the places we've mentioned are significantly cheaper). I haven't factored in cost of utilities or basic essentials (cleaning, office supplies, etc) or what's needed to grow (get more tools, expand to a new space, etc.). I roughed in a $50 membership fee too. So basically, I guessed at everything.

Here's what it looks like:

Monthly Rent $1,000.00
Insurance $1,000.00
Total Running Cost (per month) $2,000.00
Membership Fees: $50.00
Members needed to be sustainable: 40

 

That works out rather evenly, I think. It does seem a little hopeful to expect 40 paying members right away, though. If I do it another way and divide by a more modest target number of members, we get a higher monthly fee:

Monthly Rent $1,000.00
Insurance $1,000.00
TotalRunning Cost (per month) $2,000.00
Target Membership 25
Membership Fee to be sustainable: $80.00

As we get closer to launch, I'm sure we'll have a much better idea of how our budget will work out. I'll keep working on it.

July 27, 2012
3:30 pm
Rob
Rochester, NY
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February 7, 2012
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Thanks for getting this discussion going.

I think your insurance estimate is way too high.  So you just got me to email an insurance agency that made a good impression on me when they spoke at a "Start a Business" class I took a couple of years ago. 

We're also going to need Internet service and it could be very expensive ($100-$200/month) because we're going to be a business. I also wouldn't be surprised if utilities run $400+/month because we might we looking at a large building/space.

And the amount of space we'll need is hard to say right now.  For starters, we're going to need a certain amount of space for the all activities we're going to have:

Woodworking shop, machine shop, welding & metal fab, electronics lab, computer / workstation lab, classroom(s), space for sewing/crafts/art, a break room/social area, photo studio, picture framing, art gallery/entryway and who knows what else. 

And then in addition to that we're probably going to want to have space to rent for storage or private work areas and studios.  The amount is probably going to be depend on how many members / potential members we have.

So I think we need to come with numbers for 3 scenarios:  the cost of running 5,000, 10,000 and 20,000 square foot spaces. Then we also need to come up with a revenue estimates that based on various membership levels and membership fees.  At that point we'll start to have an idea about what's doable and what isn't.

I also think we really need to start contacting other maker spaces and find out what their costs are. Some of them have it posted online, usually in their Wiki's if they have one.

One more thing.  I think we also need to budget money to regularly buy new equipment and make other improvements to our space.  We also need to budget for a reserve fund.

July 28, 2012
6:35 pm
Jon Schnapp
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Forum Posts: 19
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June 23, 2012
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Agreed on all your points. What do you think is a more reasonable estimate for insurance?

July 29, 2012
10:54 pm
Rob
Rochester, NY
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Forum Posts: 103
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February 7, 2012
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I hope to know soon.  I expect the agency I emailed Friday will call me soon.  And Tom, who you met at the last meeting, just gave me the name of the business insurance agent he uses. 

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