Allowing for Future Growth

All things being equal, a business facility that can accommodate potential future growth would be more attractive than one that does not. However, realistically, all things are rarely equal. If one facility offers more room, you can expect to pay for it some way: in price, location, or other terms or features. If this is true, does it make sense to pay now for the benefit of easy expansion later? It may, but only if you reasonably believe (not just hope) that you will need the extra space in the not-too-distant future and that any additional costs that go along with this extra space will not be an undue drag on current business growth.

Justifying the Cost of Additional Space

When faced with the question of paying more now for additional space that would be useful only if the business expands, some brash entrepreneurs would say: "Think big — then make it happen." Others would advise against this, saying: "Spend wisely now and put the money to current use." The weight of authority would seem to be with the more conservative approach. Most small business advisers suggest that startup businesses keep a tight rein on costs. Business plans can be put together that envision additional facility requirements, but actually acquiring the additional space should probably be put on hold until business activity and profits justify taking on the added expense.