From the San Francisco Chronicle:
Black Oak Books in Berkeley to close its doors
Black Oak Books, the large independent store — once a fixture in North Berkeley’s Gourmet Ghetto and now in West Berkeley — will close its doors at the end of the month. It has been in business for 33 years.
“It’s sad,” said owner Gary Cornell by phone, “but at some point you have to realize that it’s just not going to work.”
The 6,000-square-foot store at 2618 San Pablo Ave. has been in West Berkeley since 2009, when a rent increase forced it out of its old neighborhood. Books Inc. moved into the vacant North Berkeley space last June.
And the numbers:
Cornell added that turning a profit would be even tougher with Berkeley’s recent minimum wage increase, to $11 an hour. Black Oak Books has four full-time-equivalent employees.
“It means my expenses would go up 50 percent over the next five years, and to be honest, that just wasn’t in the cards,” he said.
Payroll should only account for about 30% of a businesses expenditure - this changes slightly depending on business type but it is a pretty good rule. Anything more than that, the business doesn't make any long-term capital and is unable to weather a downturn.
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