HOW MUCH CAN YOU REALISTICALLY MAKE?

This is a business in which you build the foundations and the success will then follow. By this we mean that in your first year you should look at it from the point of view that you will learn your business intimately. You will start it slowly and under control only accepting a certain level of business. We recommend this to be around the £35,000 to £45,000 mark.


Please bear in mind that these figures are forecasts and some franchises make more or less. Please take into consideration that all turnover incurs a 10% MSF (management service fee) which is paid annually.

 

 

EXAMPLE 1

 

Let's look at a hypothetical franchise which we will call a moderate operator.

 

Year 1 Turnover = £30,000
Year 2 Turnover = £60,000 (the first years £30,000 of re-installs and new customers amounting to £30,000)
Year 3 Turnover = £90,000 (the first and second year's £60,000 of re-installs and new customers amounting to £30,000)
These figures are based on customers renting their decorations and a 3 year install plan, which is fairly typical.

 

Now let's look at the costs associated with carrying out such works.

 

Year 1 stock = £15,000 (stock should never cost you more than 45%-50% of your sale)
Year 2 stock = £15,000
Year 3 stock = £15,000

 

Other costs such as labour, petrol, van hire, marketing, storage, admin should never cost more than 25% of your sales.

 

Year 1 costs = £7,500
Year 2 costs = £15,000
Year 3 costs = £22,500

 

Now let's put these figures together and show you how much money you'd make each year

 

 

  YEAR 1 YEAR 2 YEAR 3
NEW SALES £30,000 £30,000 £30,000
RE-INSTALLS   £30,000 £60,000
TOTAL INCOME £30,000 £60,000 £90,000
   
STOCK £15,000 £15,000 £15,000
OPERATING COSTS £7,500 £15,000 £22,500
TOTAL COSTS £22,500 £30,000 £37,500
OPERATING PROFIT £9,000 £32,000 £52,500

 

 

As you can see from the above figures in year one you would earn £7,500, year two £30,000 and year three £52,500.  Now let's presume that in year 4 you decided you didn't want to bother with new customers and just service the ones you have. You wouldn't need any stock, you wouldn't need to spend any money on marketing and you could reduce your admin costs.

 

So lets reduce the operating costs from 25% of your income to 20%. 

 

On revenue earned on only re-installations of existing clients (£90,000) you would have costs of £18,000 leaving you with an operating profit of £72,000. Now if you don't think that that's serious money from 3 months of business then we can tell you for a fact that there is nothing else out there that comes even close!

 

 

 

EXAMPLE 2

 

Now let's look at a hypothetical franchise which we will call an enthusiastic operator.

 

Year 1 Turnover = £40,000
Year 2 Turnover = £80,000 (the first years £40,000 of re-installs and new customers amounting to £40,000)
Year 3 Turnover = £125,000 (the first and second years £80,000 of re-installs and new customers amounting to £45,000)
These figures are based on customers renting their decorations and a 3 year install plan, which is fairly typical.

 

Now let's look at the costs associated with carrying out such works.


Year 1 stock = £20,000 (stock should never cost you more than 45%-50% of your sale)
Year 2 stock = £20,000
Year 3 stock = £22,500

 

Other costs such as labour, petrol, van hire, marketing, storage, admin should never cost more than 25% of your sales.

 

Year 1 costs = £10,000
Year 2 costs = £20,000
Year 3 costs = £31,250

 

Now let's put these figures together and show you how much money you'd make each year

 

  YEAR 1 YEAR 2 YEAR 3
NEW SALES £40,000 £40,000 £45,000
RE-INSTALLS   £40,000 £80,000
TOTAL INCOME £40,000 £80,000 £125,000
   
STOCK £20,000 £20,000 £22,500
OPERATING COSTS £10,000 £20,000 £31,250
TOTAL COSTS £30,000 £40,000 £53,750
OPERATING PROFIT £10,000 £40,000 £71,250

 

As you can see from the above figures in year one you would earn £10,000, year two £40,000 and year three £71,250.  Now let's presume that in year 4 you decided you didn't want to bother with new customers and just service the ones you have. You wouldn't need any stock, you wouldn't need to spend any money on marketing and you could reduce your admin costs.

 

So let's reduce the operating costs from 25% of your income to 20%. 

 

On revenue earned on only re-installations of existing clients (£125,000) you would have costs of £25,000 leaving you with an operating profit of £100,000. Now this is serious money we're sure you'll agree, especially from only a few months of hard work.

 

So how realistic is it to find new customers every year, I hear you ask?


Well the answer really depends a lot on you. We have franchisees who do less than an average operator while at the same time running other business interests. We also have franchisees that blow these figure right out of the water! In 2011 and in the middle of a recession we had a new franchise hit just short of £60,000 sales in their first year. In 2014, two franchisees in their first year of trading achieved over £75,000 in sales each. In 2015 we had a franchisee in their second year of trading achieving over £186,000 in sales and a third year franchisee achieving almost £228,000.In 2016 we had a franchisee in their first year of trading achieve over £80,000 in sales whilst most recently in 2017 a franchisee in their first year of trading achieved sales of over £103,000, with another year one franchisee achieving just short of £93,000. These results however weren't just luck, they were due to putting that extra effort in and having the right amount of drive and motivation that is required to set entrepreneurs aside from those who are employed by someone for a salary.

 

PrOmotionial video

Want to know more about our products and services? Take a look at our promotional video.

TESTIMONIAL

Celebrating success, read just some of our success stories and learn what our clients say about of work.

Charlotte

Doubled first year’s targets, bringing in £70,450

Marion

Shattered first year expectations, doing £103,294

Vicky

Fantastic first year doing £92,889 of business

Janis

Amazed and delighted by her first year results of £83,187

GET IN TOUCH

If you have any questions or would simply like to findout more information, please contact Gill O'Brien.

 

The Christmas Decorators Ltd
Units A1 - A3
Speke Business Park
Sprint Way
Liverpool
L24 9AB


(Gill O'Brien - Available Mon-Fri 9am-8pm)
Telephone +44 (0) 151 734 4300
Mobile +44 (0) 7487 897315

 

Email: gill@thechristmasdecorators.com