Re: two questions for business owners
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At my old neighborhood I regularly went to the only dry cleaners in a 2-mile radius. All of a sudden, a new dry cleaners was going to be opening less than a quarter mile away.
I asked the owner one day if he was worried about the new cleaners.
He laughed, "No. I own that shop also."
It seems to me that he was eating into his own revenue, while basically doubling expenses. What am I missing?
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Its hard to say for sure without knowing his business better. Maybe he doesn't have the capacity at the current shop to service all his business. Maybe he only owns retail space and subcontracts the actual cleaning to another business. Maybe 1/4 mile is far enough. Maybe the cost of upgrading his current equipment is so expensive that it made more sense to spend a little more and phase out his first store entirely. Who knows.
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