STOP! Don’t sign that shop lease!

STOP! Don’t sign that shop lease!

Time after time I see shops open that clearly have zero chance of success.  It has become so crazy that I can accurately predict a shop’s lifespan to within the nearest couple of months.

Setting up a shop is a costly business there is:

  • The shop lease
  • The shop fit-out and signage
  • Stock
  • Utilities
  • Staff
  • Insurance
  • Plus a myriad of other smaller costs

The issue with most physical shops is their location, they rely heavily on the footfall of passing trade.  Unfortunately the majority of small businesses cannot afford the premium rents of high football areas, they therefore lease properties in cheaper areas where there is little to no footfall, or the wrong type of footfall.

In most cases this is a false economy.  Little footfall means little turnover and even smaller profits, in most cases these shops don’t ever reach break-even.

Just a small number of real life examples include:

  • A barber shop that opened up on a block where there was already 2 other established barber shops, this barber shop had only one seat, how could they ever expect to make money, with one seat and close competition they lasted less than 6 months
  • A pet shop opened on a quiet high street within weeks of another pet shop going bust on the very same high street just weeks before, they lasted less than 6 months
  • A bathroom store spent tens of thousands on a shop lease a tons of stock, they lasted 12 months

The sad fact is that the majority of these personal tragedies, sorry I mean business failures could have been avoided with the right planning.

When looking to take on a shop lease ensure you have the marketing fundamentals in place and you know which market you are serving and that the market is big enough to sustain your business.

Don’t forget to leave your comments, thoughts, ideas and feedback below.

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