I've been in the same location for the last 26 years, and our lease is coming up. Currently I'm in 1200 square feet and with NNN kicked in I'm paying about $5800/month. I have the opportunity to move to a different location but it's 1500 square feet and with NNN kicked in it'll be about $6000/month. Moving costs and getting the present location back to vanilla will probably be $50k ish. The new location will have alot of traffic (next to a gym) however, I'm more of a destination stop than a walk in business. The new location has a great lay out. I just hate paying the most per square feet in the center because I've been here the longest.

Business location:
18591 Brookhurst St.
Fountain Valley CA 92708

Thanks in advance everyone for your input

Will the extra space increase sales/productivity or make you any more money?
On the surface 300 extra SF doesn't seem much of an improvement.
However, if there will be more walk-in traffic business then it could be worth it.
Only you know the the area and business climate surrounding it.
Good Luck

Can you negotiate the current location lease?

Dave, I think you should strongly consider it. Your reputation will follow you and so will your existing clients. The chance to have new blood and more walk through traffic seems like a winner. Bottom line is will the space help? Also, I assume your existing landlord wont take a haircut.

Dave, my .02, for what it's worth, would be to see if you can negotiate with your landlord to stay in your current location.

As mentioned, since you are more of a destination business, as opposed to a walk-in, you may end up losing a few customers due to the new location. If you are able to save a few $$ by renegotiating, you could put the savings into advertising.

Where I am in the Chicago burbs, local jewelers seem to like advertising on highway billboards.

quote:

Originally posted by smschulz:

300 extra SF doesn't seem much of an improvement.

25% more space for 3.5% more rent, and "the new location has a great lay out."

Might be worth it.

Just looking at what you wrote, it's hard to figure because there must be other factors other than just the rent itself to consider.
Does the extra square feet make a huge difference and a guesstimate of the income difference between the two. The rent money difference isn't enough to worry about.
If it's not, I'd be tempted to do some negotiation with your present landlord as staying would be beneficial to both of you.
Also, how close are you to retirement age and if near, what's the exit plan and how will this effect that plan?

If the new space works and provides you with a 25% increase in work/display space for $200 a month, it's a pretty tantalizing offer.

OTOH, you could leverage it with your current landlord for a better renewal rate, your new space is $48/ sq foot, vs $58 per sq foot where you are now... (if I did the math right, $6K*12/1500.

If you can do so you would stay at the current location and be paying $4,800 a month if you can negotiate the same per foot rate with the current landlord as the new space.

Plus you have the option to take the $50K and pocket it, or improve the current space and equipment without the hassle of a move.

If not you said move to the other location will take $50K as you said and you'd need to calculate the ROI for that sum. Will moving allow you to upgrade the shop in that $50K, new counters, better safe, larger work tables etc.

Lots to consider.

quote:

Originally posted by 220-9er:
Also, how close are you to retirement age

He can’t retire. Mild-mannered jewelry shop owner is the cover for Dave’s secret identity as a super hero.

Commercial rent-any build out costs included?
Parking lot vs on street parking.
The per sq ft price is cheaper in the new space at $48/sq ft. $58/sq ft in existing space.
Proximity to USPS or UPS or Fedex?
1st floor location? Compliance with ADA laws.
Security--well lit, opportunity for smash/grab,etc.

Why should the senior tenant be paying the highest rent per sq ft?

What does your gut tell you?

I vote don't screw up what you already have.

Also, $50k in moving costs isn't nothing. Even if you are paying a 10% premium over your neighbors, it's going to be something like 86 months before you recoup your moving costs based on rent premium.

Basically, your bet is that moving to a "better" location will drive more business to your shop--enough that it will make up the $50k in moving costs and additional $200 per month (and whatever increase in NNN and CAM). But how much business do you really expect from walk in clients? Is that going to go up or go down in the future? Do you expect things like Yelp and Google reviews to be more or less influential in the future?

Never in my life have I walked past a jewelry store and thought I'd pop in just to browse (unless I'm on vacation and want to buy something local). Maybe it's because I've always just bought jewelry from you and haven't ever needed to look. But, I think with your reputation, it might make sense to look into one of those office/warehouse spaces in an office park, get your rent super low, and just lean into the fact that shoppers are going to come find you wherever you might be if you were going to move at all.

Will the new floorplan be more useful space?
Sometimes square feet are wasted space.

Will the new location increase or decrease your security? (having been broken into once)

Will the new visibility/foot traffic bring in the clients you want to cultivate or just more people looking to use the washroom and try sleight of hand shoplifting?

Will the new location make the commute home easier or harder?

Yes, play hardball on negotiations if any inkling to stay put.

Not an expert. But perhaps fall back to the 4 P's and SWOT analysis.

You are the brand. How does the brand change with the new location? How does the competitive picture change w/ the new location? How does the opportunity change w/ the new location? How much of your current regular customer base will you lose; how much will you recover w/ new customers?

A diligent SWOT may be telling....

Well that just sucks! The new place just got an LOI in and signing docs today. Lets see what the creative minds of Sig Forum can help me get a reduction in rent!

We recently had to open a new location for our primary offices (we have satellites around the state).

Telecom has been a nightmare. The buildout is still underway. Google locked out business account for re-verification when we changed an address. Yelp is always a PITA if you aren't paying them monthly. PLUS...our network backup RAID drive has somehow lost the power cord that was taped to it.

I hate moving. Markets are wonky, pretty much everywhere. Some good, some bad. What is the likelihood of the owner replacing you if you leave? I'd certainly try to negotiate for a better deal and stay in place. If you can let them know you're considering moving for a better location, would that help in the negotiations?

Mid-move we discovered the USPS would no longer deliver packages to the old office location, and the new location has been over 2 weeks in place and the new USPS office still isn't delivering our mail despite calls and visits nearly daily to them. Amazon has been our largest supplier, most of the office consumables we need can't be sourced locally. They won't ship anything but USPS now, so we're really in a pickle.

I'd strongly consider NOT moving if that is an option. Some headaches you don't know until they happen. These days you have to assume incompetence and screw ups with every company involved, from USPS to the telecom and buildout contractors.

quote:

Originally posted by davetruong:
Well that just sucks! The new place just got an LOI in and signing docs today. Lets see what the creative minds of Sig Forum can help me get a reduction in rent!

A market survey and a legitimate threat of leaving are the best tools you have.

quote:

Originally posted by davetruong:
Well that just sucks! The new place just got an LOI in and signing docs today. Lets see what the creative minds of Sig Forum can help me get a reduction in rent!

That's going to depend a lot on your local market.
Are there a line of others waiting for your spot or other nearby vacancies looking for a tenant like you? Is your landlord an individual owner that you have a long relationship with or corporate employee that is only looking at the numbers?

If you are a destination location, then you should be able to negotiate with your landlord, because all of the shops around you are building off of your success. That should count.

Otoh, if the new space has great parking and attractive amenities around it that complement your business, then it may be worth it.

My husband and I looked at moving our business from the location it’s been for 15 + years, but ultimately decided not to, simply because our patients have been coming to us for so many years at that location- that is what they know, so if we moved out and a similar type business moved in, they would simply be stealing our thunder, depending on how important it was for that person to wait and find us.

Another example: today I went to get my hair cut. I’ve been going to the same place for two decades, but recently since Covid the owner retired, and two of the stylists in her shop decided to open their own shop a block away. Guess where my wandering mind took me this am? Not to the new space!

I don't know how long your leases are for but maybe for next time, start the analysis in advance so it gives you more time to plan and put you in a better negotiating position.

Aeteocles' thinking process (not his conclusion) is more my preference. And I know the answers to the questions below are difficult but going through them will help in the analysis.

What will any new place do for your business financially? Will it increase your sales or decrease your costs by, for example, improving efficiency? It's anyone's guess but your gut ballpark estimate would still be valid.

How many months will the financial benefits of the new place equal the moving cost which would include informing current customers?

Over the same period of months, if instead of moving, you spend the moving cost into something else (like advertising - but I can't think of anything better), would you be able to increase your sales or lower your costs the same amount as moving?

Good luck, David.