Are you really in the right place for your business? Are you paying too much and not fully leveraging your location? Maybe you have a business that doesn’t necessary target walk in traffic but your business is located in a retail space and you’re paying retail space rent…
I sat down with a local business owner that owned a school next to a major anchor store. When she started her business she saw great opportunity in having the anchor store foot traffic that would allow her the exposure she thought she needed to hit the ground running when she first opened her doors.
Fast forward 5 years, she was paying upwards of $25,000 a month in rent for her space.
We decided to revisit this to determine whether it still made sense for her business.
We had her receptionist casually ask all the students how they found her business.
After completing the study, she found that only 3 of her 60 registered students were a direct result of the foot traffic.
So let’s do some quick math here… each enrolled student produces a monthly income of $800 a month.
3 students x $800 = $2,400
57 students x $800 = $45,600
So $2,400 of her monthly income is a direct result of the foot traffic of being next to an anchor. The other $45,600 came from other sources… word of mouth, google search, et cetera.
Ready to hear what she ended up doing?
She purchased a stand alone building a few blocks away for $2,000,000 with more space and potential. She went from paying $25,000 in rent to paying $15,000 for her mortgage and property taxes instead. That’s $10,000 she saves every month… To say the least the $2,400 that was generated from the shopping center foot traffic is not so significant to her anymore.
In this case, because of the nature of her business her customers didn’t mind driving a few extra minutes to a new location because they trusted her and staff.
Is this always the case? Not always.
What other factors should be considered?
Well, for one, if the move to a new location would affect the business and operations.
This is just some of the ways that you can make a big difference to your business if you take the time to analyze your operations and make sure that you are always aware of your situation. Moving into this space may have been the way to get her “feet wet” when she first started 5 years ago, but her business has evolved and has moved on to bigger and bigger things.