The Numbers Don’t Lie: How Micro-Renting Could Have Saved My First Business
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Cafe Catastrophe by Thomas McBryde
Fifty- thousand dollars, months of self build-out, and thousands of hours of combined work, all came crashing down in one instant… literally. The roof collapsed right in front of my eyes, adding a permanent skylight to the building where my cafe was. The water rushed in and within moments the entire building was flooded. In retrospect, my business partners and I should have left the building for safety’s, but I think we were in too much shock.
“This can’t be happening,” one of them said out loud.
The landlords sent a crew out to attempt to pump the water out the next day, but the rain continued on and off for weeks. Eventually, they just gave up and left the stagnant water to fester, resulting in black mold and a terrible smell.
A tarp over the roof, but it might as well have been just a band-aid because it did nothing. A very thin wall separated our cafe from the collapsed building, and we thought, maybe we could weather through, but eventually we all realized we couldn’t make it work. Nothing was ever fixed, the roof remaining collapsed, even as I write about it nearly a year later. Our first business was a total loss.
A few months before this fateful evening, I and a few other partners opened our first cafe in San Antonio, Texas. Like anyone who has ever opened up their first brick and mortar establishment, we were excited and had so many plans to make it a success. We were located right near a crowded college and a busy downtown strip, our crew was fantastic and there was a community of people who loved our product.
We didn’t have state-of-the-art coffee equipment but instead crafted our own unique table-side service espresso making. Were there some issues with the building? Yes, but we were promised they would be fixed, so why not press ahead?
At first, the landlords were willing to give us some concessions on rent, allowing us some time to finish our build-out, which was completely on us. We were told the cosmetics and other issues would be handled, but that didn’t happen.
I’m not sure exactly when we realized we were going to have trouble. It might have been when the wood rotted doors were never fixed. Maybe it was when equipment that we were using for the build-out began to go missing every time the building maintenance guy was around. My spidey senses were tingling when the A/C stopped working and weeks went by with no word on it being fixed. Electrical problems, plumbing issues, a leak that kept getting worse… pick your poison.
Most of these issues weren’t apparent at the beginning, and if it hadn’t been for an unusual amount of rain in Texas that year, we may not have known right away. Water would rush in through the doors with the dry rot, each time flooding the inside of the cafe. The roof began to collect water in areas and the trusses had bent (and we were never informed about this at the time), so it was a disaster about to happen.
It was difficult to endure. On a financial level, we lost close to $50,000. On a personal level, it was hard to see all that hard work be for not. Hindsight is 20/20 and if I had known about better options before signing a five-year lease, I might have avoided a great deal of unnecessary pain.
What my business partners attempted to do was to follow the same pattern that most entrepreneurs do. Have an idea, invest some money, find a place, and build it from there, and sign away your life in the process. Looking back, and for anyone who has done this themselves, signing a five year or ten-year lease is a huge gamble. Sure, it sometimes pays off, but for every success story, there is a multitude of others that don’t live up to the expectations they hoped for.
A New Approach
Every now and then, a new approach is needed on an existing model to enhance it, or make it better. The problem, however, is that people tend to get stuck in pre-existing modes and don’t take the time to see if there are alternatives out there that might better suit their needs. Looking back, I wish I would have been more aware of SpaceCadet and its concept of Micro-renting.
Founded in San Antonio, Texas in 2015, the mission of SpaceCadet is to stimulate urban renewal and empower entrepreneurs, commercial brokers, property owners, and the communities they belong to, by streamlining and simplifying the short and micro-term commercial real estate transaction.
First, renting space for a business can be a daunting task for any entrepreneur. It can be a painful experience for a business owner because there is a substantial amount of risk involved. It’s difficult to completely gauge if a business will fit or succeed in a certain space, and signing up for a long term lease can be a frightening prospect because of the financial risk involved.
With their new model of micro-renting, you have the ability and the support to test your operation out and gather some much-needed data and market information. It can give you the time to perfect your business model before you sign for a long term space. It becomes a tool to help your odds of success increase.
Micro-renting also extends beyond the business owner and begins to positively impact the community as well. When an entrepreneur deems a long term investment to be too risky, it discourages them from using available commercial space. This, in turn, creates an economic problem as the community begins to fill with empty, useless lots. The property owner then begins to lose money on an unused lot and an economic stagnation occurs. Empty buildings and lots encourage vandalism and begin to deteriorate the value of property adjacent to them. So the problem has become systemic and gone way beyond that of just a single prospective business owner.
SpaceCadet and its concept of Micro-renting offer a very unique approach to solve this problem. Micro-renting reduces the amount of empty space, stimulates value in the property, and generates money back into the economy, by activating those communities and their spaces.
Finally, as an entrepreneur, consider the amount of money saved, and how that money can then be redistributed back into your business for further innovation. I personally lost close to $50,000 in my cafe, and before it even had a chance to succeed, a catastrophe happened. Had I known the concept of Micro-renting prior, even if my business still failed, I might have only lost $2,500 (95% less) of my investment!
Business can always be a bit of a gamble. You can do your very best and it might still fail. Does Micro-renting guarantee you absolutely will succeed? No. What it will do, is help mitigate losses on a tremendous scale should that happen. As a business person, you should plan for the best and work hard toward that goal, but in that preparation, you need to have a contingency plan should the unexpected, or unthinkable happen. Why not start on the right foot? Test your market out, test your consumer base out, find out if your business is something you are ready to commit heart and soul to.
Contact the Crew at SpaceCadet, have them walk you through the process, and find out directly how Micro-renting can help you and your business plans succeed.
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Contact us to learn how micro renting can help your business today.