My search for a suitable UPS Store location lasted 6 months. What made the process more challenging was the number of existing Mailboxes Etc. stores (prior to the rebranding, there were around 12) situated in the best neighborhoods in San Francisco. There were only a couple territories left that I felt made sense for a concept like Mailboxes Etc./The UPS Store.
One of the retail buildings I’d been eyeing suddenly had 3 spaces available or soon-to-be available. One was about 1,200 sq. ft, the other was around 1,000 sq. ft., and the smallest was approximately 800 sq. ft. Guess which one I ended up getting? The biggest one — the one that matched my big dreams, of course. Looking back, it was not a very smart decision. There was just too much wasted space, and made the store look eerily empty most hours of the day.
From what I’ve observed, the size of a retail space has very little impact on top line revenues. Far more important are foot traffic, visibility, and the right demographics for the concept.
If I ever find myself in the same situation again, all else being equal, I would choose the most compact space that still satisfies the minimum requirements of the franchise, but in the best possible location that meets my budget. I could have easily made the 800 sq. ft. space work. That comes out to a third less square footage. But with a more efficient layout, every last inch of space could have been fully utilized.
That one decision cost me an extra $1,000 a month in rent — which adds up to $12,000 a year, and $36,000 during the entire three years I owned the store. I could have used that extra money to spend on additional advertising, some extra part-time help, or even just to reward myself for all my hard work.