Space is an asset until it is no longer producing adequate income. Then it becomes an anchor on profits. Remember that the costs of using space go far beyond rent, lease payments, mortgages, taxes and utilities. Here are four steps to take to see if you can reduce your space costs:
- Dig deep and find out what the true cost of ownership is for every space you have.
- Review how productive each space is for your business. How much revenue does it support or generate? Retail space is usually measured in revenue per unit space (e.g. $/square foot).
- Ask yourself what would happen if we reduced or eliminated this space?
- Once you know the answers to #3, see if you can eliminate the space, reduce the space or put it to other productive uses.
One of our clients that did this reduced costs by $95,000 per year and then sold an entire building for a significant profit.