In today’s digital age of online marketing, virtual operations, and viral branding, it’s easy for business owners to focus solely on a virtual presence. However, there’s a time and place to consider taking that next step: moving into a physical space to anchor your business and build local traction. For many, the idea of leasing a commercial space in today’s economy may feel intimidating, even unattainable. But if you’ve been hesitating, it may be time to reconsider. Let’s explore why.

The Real Impact of a Physical Location on Revenue and Customer Retention

Studies have shown that having a physical presence can dramatically impact revenue and customer loyalty. According to the U.S. Small Business Administration’s Office of Advocacy, businesses with physical locations generate, on average, 37% more revenue than online-only operations. And it’s not just about sales: data from Harvard Business Review reveals that businesses with a brick-and-mortar location see 30% higher customer retention rates. These figures point to the undeniable value a physical location can offer in terms of revenue and building a loyal customer base.

Additionally, the National Retail Federation (NRF) reports that small retail businesses experience a 40% increase in sales when they transition to a storefront. While this statistic directly relates to retail, other service-based industries see similar boosts; consulting firm Deloitte found that small service businesses report an average revenue increase of 25% after moving to a physical space. Imagine what these numbers could mean for your bottom line.

Getting a Handle on Affordability: Do You Have the Right Tools?

The question many small business owners face is not whether a physical location would benefit them, but whether they can afford it. If that sounds familiar, you’re not alone. But understanding what you can afford doesn’t have to be an overwhelming process. The key lies in having the right tools and knowledge to make an informed decision.

I want to acknowledge the professionals who can help you on this journey: commercial real estate agents, real estate attorneys, tax consultants, and business advisors. These experts are invaluable in helping you navigate lease negotiations, legal implications, tax considerations, and overall feasibility. If you’re in the early stages, however, and feel apprehensive about reaching out to a professional just yet, there’s an excellent starting point that can help you run the numbers and get more comfortable with the idea.

The Rent Affordability Calculator: Your First Step

The Rent Affordability Calculator on Small Bay Solutions’ website offers a straightforward way to begin assessing what you might be able to afford in terms of monthly rent for a commercial space. This tool helps you calculate expenses, determine an ideal rent-to-revenue ratio, and see potential affordability scenarios. This allows you to test out different scenarios, tweak your revenue and expense estimates, and get a clear picture of what’s feasible for your business.

You can start using the calculator here. I encourage you to play with the numbers, then add an additional 25-40% to your projections to factor in potential revenue growth. That way, you’ll be able to see how these numbers line up with the NRF’s findings that small retail businesses typically enjoy a 40% sales increase once they open a physical store.

The Case for a Storefront in 2025

For small business owners, the benefits of having a physical location go beyond just increased sales and retention. A storefront creates a tangible presence for your brand in the local community, gives customers a place to experience your products or services firsthand, and can be a valuable differentiator.

So, as we approach 2025, consider the question: Can you afford not to open a physical storefront for your business? With the tools and data available, now may be the time to take that leap. Imagine the possibilities of greater revenue, loyal customers, and a thriving local presence for your business.