Cutting Back

The above photo is before we actually split the warehouse up and there is roughly another 20m of warehousing behind me. The space we agreed to take in 2024 was from where the boxes are lined up because that gave them the hassle of the internal staff toilets which was roughly 120 square meters of wasted rental space. We have facilities for the staff on our side so having double was a waste of money.

Nearly two years to the day back in February 2024 we made a deal with the landlord to cut our warehouse size thus reducing our rental in a 60/40 split. This was more budget friendly and the new 2400 square meters was adequate for our needs. This was hard at first as space was not something we had to really worry about before and now you had to plan space management.

The empty space we freed up to reduce our rent in 2024.

This week our neighbors who took over the freed up space we left asked if we had any more spare space for them to take thus reducing our costs each month. I mentioned in yesterdays post we had a lucky break and got rid of one of our free loading family clients who was taking up about 400 square meters, but was not really noticed due to most of this stock being placed on warehouse racking.

Having worked in the newly adjusted space now for nearly two full years we could easily trim some more without causing too much problem. I do think we could lose another 30% quite comfortably and still function as normal which is a reduced rental of roughly one third and that is a big savings each month. We had to work in the space to see how much space was adequate and 2 years is long enough.

We have spoken with the landlord and obviously he wants to keep his tenants happy and the next door neighbor actually rents 3 ware houses from him and the pressure has come from another tenant at one of these other warehouses so everyone is playing musical chairs seeing if there is a solution that can be found. If we were not prepared to adjust our warehouse size then the whole plan falls apart so we are negotiating from a position of strength.

We will still stay on our side as there are some weird shapes and sizes when it comes to various rooms and storage that we have made work. The warehouse was once an industrial warehouse and there is still some old machinery embedded in the floor and too costly to remove so they have just remained. The one section houses our trampoline department and another houses the returns and is not part of the main warehouse, but is still a functional area for the business. Very few clients would agree to rent these spaces and why we have such a good rental deal going on and would be reluctant to just swap warehouses. The funny thing is with the previous land lords I talked them into giving me those funny odd areas for free which with this landlord is not the case even though it is a far reduced rental for those special areas.

The timing could not have been better as we are currently working on the budgets again and reducing the rental was never part of the plan until we were approached this week. The family member whose business is moving out has made this possible and we could not have wished for better timing. Once those 8 or 10 truckloads of stock have been removed it will make a huge difference. The favor we were doing for free was costing us which will equate to around a $3K saving each month.

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