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What Size Building or Store I Need?

Calculating Retail Selling Space


Exterior of an empty store in a suburban strip mall with 'FOR LEASE' sign posted in a window, Michigan, USA
Joelle Sedlmeyer/ Photolibrary/ Getty Images

What size building or store do you need? When planning your retail store, the amount of selling space will be one of the most important factors in selecting a location. It is can also be one of the most difficult to determine.

As with any new business, most of your assumptions will be based on industry research and comparing similar stores operating in similar locations. To get an estimate on how much selling space your store must have, divide the planned sales volume by your industry's sales per square foot.

Sales Volume ÷ Sales per Square Foot = Selling Space

Let's say you believe your proposed book store will do $250,000 per year in sales and market data says the average sales-per-square-foot in a book store is $150. By plugging those numbers into our formula, the amount of selling space you will need is approximately 1666 square feet.

Besides selling space, remember to factor in extra square feet for an office area, stockroom, storage, and/or bathrooms. Although you may want room to grow, keep the size of the building close to your store's needs. A big store takes more inventory to fill and an empty looking store may not attract customers.

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