Thinking ahead to next year. There’s just the two of us at the moment, we make good quality kitchens, I make the cabinets and doors and DW paints them, we also do our own installs. We work from a rented workshop in a village, but there is no showroom potential, we get most of our leads from advertising in lifestyle magazines.
In a nearby, busy, town there a high street store vacant that would be ideal for us as a showroom, plenty of people in slow moving traffic could see in the windows, big supermarket and car park around the corner.
If we took on this store it means several things-
more sales, better prices, the need to employ 2 part timers in the store and the need to take on a cabinet maker to increase our output to match the increase in sales as well as the rent for the store.
I realise that there is a risk that the sales won’t be forthcoming, or that getting good staff might prove to be impossible. Normally I would be happy to stay as we are but if we did not expand and something was to happen to me then the business would collapse.
Any thoughts on which way I should go?
John
Replies
Rather than, or in addittion to expanding, BUY a place and stop renting.
You have no idea how this will affect your bottom line not just now, but even more so down the road.
You can rent the building from yourself to the company................
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I say stay small, keep your life simple. Just my opinion. (I'm a one-man operation, with part-time help from my daughter...but she's getting married soon and moving to Montana).
Seems to me your basis for making this decision is backwards. You see a prime location available and get to dreaming, then aask, canwe adjust the business to fit the location.The idea of having a business plan is to map out where you want to go and how you want to get there. The storefront location is merely a vehicle on that road.
So make this decision as though the location were not available. That should clear some of the weeds out of your mind.
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The heck, you say?
I sold my countertop shop four years ago. I had several employees and did 300K a year.
I'm back in the business, but I don't even have a shop. Every time I get a job, I pay a cabinet guy who has plenty of shop space $300.00 bucks or so to let me fab at his place. He loves to see my face. I have no showroom, no employees and no fixed overhead.
A friend of mine just spent a million dollars for stone processing equipment. I send him electronic templates and he sends me fabricated tops at very competitive rates.
There are many over-invested-under-capacity shops out there. You can have thier capacity for a song and with no risk.
I get excellent leads from ServiceMagic, paid $162.00 for $9,800.00 worth of work. If I can clear six figures in '06, I'll never go big again.