Determining the Optimal Retail Store Size

[TCSlaguna]

Hey Everyone! 

I was wondering how everyone determined the optimal retail store size they needed for their business. I know retail stores like Apple calculate profit per square foot. But for those of us who are just starting a business and may not have a PhD Candidate as an Operations Manager, I was wondering: 

How did you determine the optimal retail store size for your business? 

Did you compare with competitors? 

Did you estimate the amount of inventory you were going to carry? 

Did you look at retail displays you would potentially carry? 

Did you just buy/lease what was available? 

Would love to hear your insight! 

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[MamiesToffee]

We sell lots of candy and handmade items. My wife says when we are ready the space has to be right for our business. Access for kids to ride bikes or walk to the store. That’s about as far as we have gotten. Since we do shows we know the setup an aware of sun hits the products. We are able to move items around so we don’t lose product to melt down!

[TCSlaguna]

Knowing your customer base is super important. 

Coffee shops next to churches and bagel shops next to schools always do so well. 

[VanKalkerFarms]

I would say our bakeries are easier as we know that we have seating for 12 people plus 4 in our custom Amish buggy with a table in it, then there is 9 display tables for the product, a 30' jar wall, a 24' donut display, and back wall display, kitchen space which is just refrigerators and prep tables and sinks, and then storage racks and bathrooms.  We played with sizes of displays and stuff in lots of sketches and CAD drawings plus we looked at lots of stores, not just bakeries, for ideas.  Our first store was taking over an existing store so we redid some of the buildout but kept most and it wasn't ideal but saved a ton in startup. That store is approx 2,400 ft².  Our second store was a brand new build in a brand new building so it is more what we had envisioned from the start, it is about 3,400 ft² and honestly a tad too big.

[VanKalkerFarms]

This was a facebook live from grandopening in our first store.

[Stacelyn24]

This is beautiful 🙂

[TCSlaguna]

I absolutely love the tiered displays, back wall displays and the buggy! 

[VanKalkerFarms]

Thanks, My Father-in-law made all the table tops, the donut display counter and back wall, and the jar wall.  He has a passion for woodwork and my Mother-in-law did all the wood staining. We poured the concrete countertops together and I welded and painted the legs for the tables.  The buggy was made by a true Amish buggy builder who builds over 50 buggies a year.

We have been leaning into a more modern styling store, but still with old Amish recipes.  This year has been a banner year after winning a lot of categories in a National Donut contest https://www.greatestdonuts.com/winners we saw a 50% bump in the week or 2 after the announcement and have maintained a 20% bump in sales in the months since.

[Lovewell]

@TCSlaguna For us we are a coffee shop with a retail section in store. We like our merch to stay fresh. We get local businesses in and will rotate them through so there is always something new in. For our branded merchandise we like to do 4-6 different runs a year. Different items, different and new logos, and depending on how big a hit it is we will reorder or move on to the next design and products depending on the season. We listen to our customers and what they are wanting. As for how big a space, we have shelving on one of our walls that wraps to the adjoining corner wall! We make do with the space we have.

Probably not exactly the kind of help you were looking for, but thought id share!

[Donnie-M]

@TCSlaguna 

1.  Be careful here as any chain will have different leverage and this is highly unique until you get to franchising stage/multi-unit.

2. This is where you look at your shipping cycles and floor space.  If you can have some things held in a cheap storage or your deliveries are frequent enough you can have a smaller footprint.  This is the notion of just in time delivery where if you have 5 you order 4 when you have 1 and it comes before you are out.  This is dangerous for supply chain disruption, but storage is much easier to find than floor space.

3.  Absolutely, what type of equipment and product are you going to have...draw out a sample floor plan and then move things around as you look at space.

4.  This is probably one of the most important things...location is more important than anything as bad location kills business unless you have one of those concepts that people find you.  Also if you are using the retail location as an add on to a thriving online business you can be more particular.  Look at the foot traffic, signage, exposure, vacancy, other businesses in the area, etc..etc..biggest thing is ..a space can be redone any way you want it.  Your lease terms and location are the most important.

[JessPoynter]

I wish I had a more methodical reasoning as to what made me decide. 

My space was determined for me 😁

Now...that being said...moving to my new space was more of a "feeling" to determine size. 

Wow. Ok. So precise right? 😆 But really. I was first interested because it had the lighting I wanted. Then in order to see if the space was adequate for me and my needs, I went in and did a normal workday "walkthrough" to see how I would use the space. Then, once that was satisfactory, I used painters tape to block out the whole salon and clinic with the furniture I was going to have. 

I hope that helps 😶