I’ve been asked recently to look at a couple of business plans.
Both business owners want to expand – that’s a good thing, if it’s justified.
But, both business owners want to buy or lease big spaces.
Because they’ve outgrown their current spaces – their home kitchens.
This is generally a good problem to have.
When you’re producing product in a cramped space, you fantasize about a gleaming new kitchen, friendly staff helping the customers streaming in and out and a business that’s booming.
It’s great to have a vision.
To fulfill that vision, we need to look at the bad words: space, overhead and inventory.
While there’s not a business owner alive who doesn’t yearn for a pristine workspace, when you start to look at what it takes to get there, you have to decide if it’s worth it.
To move to a bigger space takes money. A lot of it.
And it’s a constant. You’re always paying for it.
It’s not just the monthly payments. It’s the cost of building it out, buying equipment, bringing it up to code, having the inventory you need to make more product, etc.
Then there’s the time. Time spent finding a space, negotiating the deal, getting stuff hooked up, hunting down contractors or landlords, meeting with banks.
And time is money. And all this is taking you away from making your product, the one that people want enough to make you think about having that new space.