When Should You Lease A Bigger Space?
It’s an exciting moment when you realize your business is ready to grow into a bigger space!
Maybe, you’ve been wondering how to know when it’s time for your aesthetic business to expand. Today, I am sharing a few ways that you can make the best financial decisions for your business when it comes to expanding.
I understand that the current economy presents attractive lease rates. However, no matter how “great” of a new lease deal you get, it isn’t “great” if your business can’t reasonably support the expense. How can you know if your business is ready for an expansion/ higher lease expense? By tracking your Performance Metrics.
Before you seriously consider leasing a larger space, a thorough Capacity Analysis and Worker Analysis should be performed. Other Performance Metrics that should be measured are your Cost-Benefit Analysis and ROI on space/ revenue. Schedule a meeting with your accountant before making any decisions. Also, consider what new services you would add if you did have more space.
If your business has experienced a robust comeback since the COVID-19 business closure and has reached the capacity of your space/ hours, then it’s probably time to expand.
However, if your business is struggling, has not reached capacity for your rooms/ hours/ appointments, and isn’t profitable, then it is NOT time to expand. The financial stress and strain from leasing a space that is too large can be avoided with careful evaluation of the right reports. I want you to own your business, not it own you.
If, after running your metrics you find that expansion is not favorable for your business, consider renegotiating your current lease terms to be more favorable.
Building out a new space or moving to a larger one can be a big expense. If you were thinking about expanding before COVID, and need to do so to grow your business, this is a good time to do it. If expansion is not a good idea for your business right now, but you plan to soon, take the right steps now! Budget, track your metrics, meet with your accountant, market your business, and reach your goals!
Have more questions about expanding your aesthetic business? Send me a message!