Business first, space second 🏢

If I had a dollar for every time an aspiring retailer told me they didn’t have their startup budget solidified because “it’s impossible to know until I find the right space,” I’d probably have a downpayment on a vacation home.


Nailing down a budget for a retail space feels impossible if you’ve never rented a space before, but here’s a pro tip: 

✨ The space does not determine your budget – your budget determines the space. ✨


Imagine if I called my residential realtor and said that I was in the market for a new home. And when she asked me for my budget, I responded, “well, I really don’t know yet because it all depends on the space.” 

💸 Should she show me a $4M historic home that needs $500k in electric and plumbing renovations?

🏢 What about a $300k one bedroom condo with $400 monthly HOA fees?

☀️ What about a 6,000sf solar-powered converted barn in the boonies for $800k?

Impossible to answer without more information about my financial and practical needs, right?

Within the context of something we’re all familiar with — residential real estate — it’s ridiculous to think that you’d find a place FIRST and then determine what’s affordable SECOND. Yes, there’s always some flexibility expected, but it’s a given that we’ll begin the process with a pretty clear understanding of our budget — how much we can afford monthly and how much we can afford to fix up the place, if fixing is needed. 

Retail real estate is the same. You CAN and MUST determine your rent and buildout budgets before looking for spaces.

And yet, as intuitive as this is for a homebuyer, the very same rational person can get it twisted as a retailer. They assume they’re going to fall in love with a space first, and build a budget and business around that specific space second.

Let’s look at how that would play out in our homebuying example…

🔨 You’d become Chip and Joanna Gaines to convert the historic beauty. Forget your day job - you’re managing a full-on construction project. Little Timmy’s college fund? Repurposed!

🚗 You’d become a single career woman to live in the condo. Adios, family! You can pay the HOA fee instead of your car payments… without the daycare drop-offs, Ubers suit your lifestyle better now anyway.

📱 You’d become a trad-wife influencer to live in the barn, your 200 Instagram followers be damned! The commute rules out the possibility of your downtown 9 - 5 anyway.

It’s the same damn thing with starting your own business – if you’re putting everything on the line to open a bakery, don’t add pizza because you have an extra 500 square feet to fill. Don't add horseback riding lessons because there's a stable out back. Changing your concept has major operational and financial implications, so you want the concept that works operationally and financially (on paper first!) to determine the real estate commitment you make.

Refining your budget before you start looking for spaces will limit the number of spaces that could work, but that’s actually a good thing. Remember, you’re just looking for one, and spinning your own wheels (or brokers' wheels) won't serve you well. And even if you have an unlimited budget for your buildout, you'll eventually want your business to pay back that investment, right?

The space, the money, and the business are all directly connected to one another. While it can be fun to play make-believe about all of the different businesses you could open, but the magical thinking needs to stop before you make a multi-year commitment on a whim.