How Much Space Do I Need for My Retail Business?

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If you are about to open a retail business or professional service business, you will need to consider everything from location to the amount of internal space you need. Space costs money as you typically pay per square foot. So, how much space do you actually need for your business? This will depend entirely on the type of business you run and how you operate.

How much space do I need?

Some businesses require larger spaces than others, so you must keep in mind exactly what you’re running before looking at commercial retail properties.

For instance, if you intend to open a sit-down restaurant, you will need to have a larger space to accommodate more tables. Below is a table of general rules of thumb for the minimum amount of retail space:

  • Small Sit Down Restaurant – 1,200 square feet. Smaller restaurant is often a good way to start, as it allows you to keep your expenses down, and as business growth occurs, you can think about expanding business and your space. If you are running a part take-away, part dining or full take-away food business, you could probably look at even smaller spaces – depending again on what you are looking to achieve.
  • Mid Size Sit Down restaurant – 1,200 to 2,400 square feet
  • Take Out Restaurant Only -1,300 to 1,500 square feet
  • Solo Practitioner Doctor’s Office – a good rule of thumb is probably 1,200 square feet.
  • Hair Salon with 5 to 7 Stylists – about 1,200 square feet.

In general, the amount of space you need should be estimated based on your industry, business model, and preferences. The below are just rules of thumb.

What to Consider When Choosing the Space for Your Business?

It’s important to keep your current and future situation in mind when choosing a space for your business. How much do you expect to grow? Do you intend to hire more employees for the space? Do you expect a large uptake of what you’re selling?

For example, if you run a restaurant, do you intend to start off as a smaller establishment with fewer tables but intend to grow within the next year or two? You may need to consider a slightly bigger space to accommodate your growth without having to move to a completely new space. Here are some questions to consider –

  • How many people will you currently employ? Do you expect to add more employees in the future?
  • What kind of business do you want to run?
  • How much space does each employee need to perform their tasks?
  • Do you need separate areas within the commercial space? For example, a separate kitchen (for a restaurant)
  • Have you sketched out your office or retail space needs to determine how much space you want? You can can hire an architect to help you do this, but a hand-drawn sketch to start should be sufficient for the initial concept. Imagine the daily routine of each employee. Are they at fixed locations all day like a hair salon or are they moving around to different spaces like a waiter or waitress?

Once you’re able to answer these questions, you should have a more comprehensive idea of the space you need for your commercial establishment.

How to Ensure you Don’t Overspend?

While you may dream of expanding your business, you must be realistic from the start so you don’t end up overspending. It’s important to set a practical budget for your store and the rent, along with utilities, products, and everything else you need for your business so you don’t end up underestimating your outgoing costs.

If you are choosing a space and intend to be there for the next few years, you should not only budget for today’s costs, but keep in mind the future costs of growth and expansion. It is easy to fall for large, luring spaces but you must be practical about your financial position to give yourself the best chance of success. It’s always best to be “bursting at the seams”, then to be paying for space you can’t use yet. Larger spaces also cost more to “build out” (i.e. finish construction and decorate), as well as more in utilities (heating, cooling), and will increase your share of common area maintenance from the landlord since you typically pay pro-rate for these types of expenses.

These guidelines should give you a good idea of how much space you need for your business and how to budget for it.



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