My husband and I live in a commercial building. Renting out part of the space to other businesses allows us to see how other people do it. So far, it hasn't been pretty.
Our first tenants were starting up a small publishing business. And figured that they could run a small shop in the front part of their space as well.
I thought, good, they're diversifying their business. That's always a good idea, right?
Their first mistake was to rent space before they really needed it. They had been working out of their home and found it inconvenient.
Then they bought all new equipment. Big, shiny, computerized printers. Really gorgeous stuff. And really expensive.
The shop? Well, after the first couple of days, when no one came in, they sort of didn't bother opening it if they weren't there doing other things. No posted hours, no regular hours, not even any contact information.
And, let's face it, hanging around a shop that isn't busy is frustrating. And when you've spent every dime and then some on the shiny new equipment, you really need those customers to come in. And then there's the rent...
It wasn't too long before the lovely printers were being repossessed. And that was the end of that business.
A friend and mentor gave us the best advice many years ago: start out small and let your customers pay for your expansion.