Retail Space - how to choose?
Retail Space - how to choose?
I own a business that sells directly to customers we find through local Facebook and Google advertising.
Our profit model is just ok - the business pays its own bills but I don't feel that it's been worth my energy yet.
About 2 years ago I opened a retail shop in the city, decorated it nicely, but in a poorly located building that doesn't have much walk-in traffic and very little parking.
I'm considering relocating to an area that would be much better located for parking and walk-by traffic. Of course the price is higher, about twice as much.
I'm looking for advice about how to decide if this is a wise move. I don't understand which metrics are important for retail as I try to spreadsheet this idea, and my background is in e-commerce and services businesses.
I'd like to be able to make some educated assumptions about whether our sales will increase and by how much.
One approach could be to use your current location data and then extrapolate for the new location.
So estimate the total foot traffic of your current location, then the % of that you feel you capture. Then estimate the foot traffic for the new location and forecast foot traffic and sales from there.
So if you capture 15% of 1000 (150) passersby per day at location A, and location B expects 2000 passersby then you can forecast sales based on 300 customers per day.
You may also have to define an average sale per transaction to then forecast turnover. This can be tricky if differing location demographics are involved.
Also, I recommend forecasting on the conservite side so if things go well, great, but if not then it's as expected.
Yes I think the idea of an extrapolation may be the best we could do. There's not much aggregated foot traffic data for the old location but we can collect it over the next couple of weeks. The new location has a lot more to go from and there are other retail shops near by.
There are demographic differences as the new area is touristy while the old is not, and this city is still recovering. It's about to be the high season too.
In some sense I'm trying to decide if I should pull the plug on the business at the end of the year and sell it, or give it another shot with a better location, which is perhaps the missing ingredient.
The industry (micromobility), is still up and coming in the city, so there has been a sense that if I wait long enough the tide will rise.