Would you move in a recession (shop!)

suzialwaysbroke

Sorry if this is in the wrong place, but this is my usual stop!
I run a small retail business with my DH & we have been in the same place for 23 years now(eek!!)
Low overheads, well established etc. etc.....
Now, we have the opportunity to move about 2 miles up the road to a much bigger place (about 6 times bigger), own parking & easy access, right by railway station & buses. Oh & bigger overheads (natch). Current premises - very small & cramped, parking has become a big problem over the years - double yellow lines, amount of traffic going THRU village, but not stopping has increased tremendously. All in all, I feel, time to move on. Problem is OH, doesn't want to move, points out, quite reasonably that we are established & although shop trade is dying (he does admit that) internet sales & calling out to customers is ok. He feels we will jeopardise our house by moving & taking on bigger overheads. I feel that if we move, we will increase our shop business enormously because of the parking/access. We are a rural business in a rural area, just would be intersted in other peeps thoughts?

Love Suzi xxx

Cumbrian_Male

How much would your turnover have to increase to support the new premises and maintain your current net profit? If you need to increase trade by 10% or more to just make the same £'s profit (ie reduced profit %) then I agree with your husband stay where you are until next year. The recession is making uncertain times, if you are increasing internet and call out business, why worry about on site sales?

for example, If you have a £45k net profit on a £150k turnover then 30% net profit. The new premises add £15k in rent rates and utilities to your costs. You now need to turnover £200k just to make the extra £15K profit to cover the overheads. I know the figures are not a true reflection as we should be looking at gross profit while looking at costs but you can see that a small increase in overheads needs a proportionately large increase in turnover. Unless your goods are essential to the running of rural businesses then can you justify the risk at the onset of a recession?

CAFCGirl

Personally I would opt to ride things out, protecting what you've built up till this point is the safe option.

It might also be worth talking to other retailers in the proposed location and see how they find trade, admit you're thinking of moving there and get to know their take on the current climate.