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You know that the 3 most important factors for your store are location, location and location.
Here comes the classic question - Should you rent or buy for the location of your store?
Before you answer the question, please consider your vision in opening a store, or starting a business in general.
Are you building a business or an asset?
Your answer to the above question is crucial in determining your vision and focus in opening a store.
Building a business
If you want to build a business, I would like to suggest you to rent the location. This way, you preserve valuable resources and use them to build your business, instead - releasing your business cash flow pressure in the early days of your business.
The main drawback of renting a location is, well, paying for rent. Moreover, the property owner will put a pressure on your rental agreement, especially knowing that your store is successful.
Building an asset
If you want to build an asset, I would like to suggest you to buy the property. Not only building your business cash flow, but also asset.
The main drawback of that, of course, is the amount of investment required to secure the location, as well as to start the business.
My recommendation
In my humble opinion, buying an asset is a better option in the long run.
Consider what Ray Kroc, the founder of McDonalds, implies regarding his successful MacDonalds franchise - He mentioned that what he basically do, is to purchase a great property, and ’slap’ a burger business on it.
You see, MacDonalds main asset is not the burger business. Its main asset is the prime locations of the stores, worldwide.
So, again - I recommend you to consider buying the property as your main priority, and let your business grow in the secured store location.
Ivan Widjaya
Secure a location, then start a business
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