Is a parking lot.
This is the parking lot at the corner of Newbury Street and Dartmouth Street, in the Back Bay. A couple days ago it occurred to me, these guys must be making a mint. So, I ran over, took a couple pictures, and checked out what they’re charging for parking.
$5 per 1/2 hour, $30 maximum, during the day and … well, I didn’t check what they charge at night, but it’s got to be at least $20 for the evening, and probably $30 on a Friday and Saturday night. (UPDATE: It’s actually only $18 at night.)
The legal occupancy is 71 vehicles. I don’t doubt they can only fit that number, because most of the cars are SUVs and they are packed in like sardines.
So, figure the average person parks in the lot for two hours. Actually, say the average person parks for three, so they only pay the $30 maximum. Say that 2/3 of the lot is full, at all times. Figure that each of those 46 spots turns three times, during any one-day period. I am being really conservative.
That comes out to about $1,490,000 in annual revenue.
So, what are their expenses?
Well, two things, mostly, maybe three, if I’m right.
First, is salaries. Can’t get by that. I think they usually have two guys on staff, maybe even three at night. They hold onto your keys and move cars around, constantly, so that they can pack as many as they can into the small lot, so they need guys to drive as well as take money. So, figure two guys 18 hours a day, at $10 per hour ($13 with all the taxes, benefits, etc.), seven days a week, 360 days a year, equals somewhere around $170,000, annually.
Second, is (are?) property taxes. Based on the public record, it looks as though there are three plots of land, two with Newbury Street addresses, and one at 278 Dartmouth Street. The assessed value is somewhere around $2.6 million; annual property taxes come out to about $80,000.
Third, is liability insurance. No idea, there. Maybe $60,000? $20,000? $120,000? Let’s say $60,000.
So, if revenue is $1,490,000 and expenses run you $310,000, your annual gross profit is $1,180,000, before income taxes, owner’s compensation, etc.