Is Your Lease Eating Your Profits? Benchmarking Occupancy Costs in a Small Brewery
Occupancy cost for your brewery consists of base rent and any NNN (triple-net) charges. Comparing these numbers to your annual revenue gives you your occupancy percentage of revenue - a valuable measuring stick for benchmarking. The generally recommended upper limit is around 10%. Anything above that can be a red flag, especially if your revenue has been volatile.
Rent vs Market: How To Know if You’re Overpaying per Square Foot
It’s well worth your time to calculate your dollar-per-square-foot-per-year rate, which is simply your total annual occupancy cost divided by your square footage. Then compare that to local listings. Market rates can shift quickly, especially if it’s been a couple of years since you last negotiated.