Total Net Sales ÷ Square Feet of Selling Space = Sales per Square Foot of Selling Space
You are renting a 1000 square foot space for $5.00 a square foot or $5,000 a month in rent. In addition, you have utilities, insurance, maintenance, cleaning, taxes, water not to mention stock and employees. Your sales are $300,000 per year which makes your sales per square foot around $300. In order to be profitable you want to make sure that every square foot of space that contains products or services contributes to the profitability and performance of your office. Benchmarking SPSF, yearly and monthly will help you increase your optical business.
- Calculates your ROI (Return on Investment)
- Helps to make purchase decisions
- Helps to create a goal is to generate more business from existing areas
- Assists in managing business and profitability
Top Performing Retail Stores
- Apple- $4,000 per square foot per year
- Costco Wholesale- $976 per square foot per year (2008)
- Forum Shops at Caesars $1300 per square foot per year
Tactics to Increase Sales Per Square Foot:
- Put a Sale Rack in the back of the store- to get consumers to walk thru the whole store.
- Set aside up to 5% of an area/stock dedicated to ongoing ‘test’ markets. Sales are then monitored and evaluated as to results.
- Empower employees to each create a ‘Eye Profit Zone’ – let each be responsible for a ‘Eye-Zone’ profit. As an example- Staff ‘A’ is responsible for Accessories, Staff B is responsible for Contact Lens, Staff B responsible for tracking and sell through of Sunglasses.
Our suggestion- do this monthly and share with your staff- involve them in the success of your optical office. Make it fun and rewarding to continually strive to grow your business.