One storefront; two stores. That’s how many small and growing businesses, like Octane Coffee and the Little Tart Bakeshop in Atlanta, have managed to cut costs and maximize profits. Retail space sharing allows two or more businesses to work under the same roof for half the rent. It’s not a new concept, but thanks to the economy and small business trends like pop-up shops, it’s growing in popularity, and it’s bringing new opportunities and new challenges along with it.
As the name suggests, retail space sharing involves two or more businesses sharing a single building or location. These arrangements will usually come about one of two ways: a business owner can sublet part of his/her current space, with the landlord’s approval, or a group of hopeful business owners can seek out and lease a single space together. In some cases, the businesses share everything, from a door to the utility bills; while in other cases, the businesses are able to maintain more independence with separate entrances and individual utility meters. Either way, the businesses save money by splitting one lease into two.
Beyond saving money, retail space sharing may bring additional benefits to each of the businesses. It’s an opportunity to share not just space, but customers, too. For example, Octane Coffee and Little Tart Bakeshop make a one-stop shop for customers who need a pre-work pick-me-up. Customers can get coffee and a pastry at the same location, while still supporting local businesses. Complementary businesses often make for good “roommates” in a space-sharing arrangement.
It’s also an opportunity to expand a business while minimizing risk. Many space-sharing arrangements are short-term in nature, making them attractive for experimentation and new ventures. A smaller rent bill could be just enough to make expansion possible, even if it comes with a smaller space.
At the same time, retail space sharing can create many of the same challenges your college roommate did. Businesses share not only the same retail space but also cleaning and maintenance responsibilities, parking spots and the risk of opening a new location. If the businesses – or business owners – are not complementary, the saved money may not matter.
Despite the challenges, retail space sharing works well for a growing number of businesses. Storefront, a retail space matching start-up, helps to make these arrangements possible. Storefront lets business owners post their sublet opportunities and connects them with other business owners looking to share space. Storefront also caters to new and pop-up businesses by offering inexpensive, short-term arrangements. If you’re a business owner looking to lease space, think about negotiating a sublet option into your lease before making arrangements.
Retail space sharing helps small business owners pool their resources and support each other for joint success. When it works, it’s good for business and it’s good for the community.
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