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Chapter Three. What Is a Good Business O... > Example 2: Children’s Clothing Shop

Example 2: Children’s Clothing Shop

Now instead of a sandwich shop, assume you want to open a shop that sells children’s clothes. (Ed’s parents’ first entrepreneurial venture was a children’s clothing store.) Assume the average sale is $10.00 per customer with a 15% net profit margin. And let’s assume you still want to take home $800 a week before taxes. So how many sales per week do you have to make?

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Table 3.3. Sales Needed Per Day

Let’s now learn about customer conversion ratio.

Customer Conversion Ratio

So you need to make 89 sales per day. Will everyone who comes into your store buy? Of course not. Lots of people will be looking, learning, planning ahead, shopping prices, exploring, or just wasting time. Some people call these non-buying people "tire kickers." So what percentage of people who come into your store will make a purchase on any given day?


  

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