How much can you spend on rent for a business?

Question

If my business is taking in $5,000 per month, how much can I afford to spend on rent?

Answer 1

You're not selling enough to justify paying for a business location if you're only earning $5,000 a month.  You should be doing that per week in order to have a business location.  When you rent you should look at the type of business, location and what you want your clients and customers to see.  Never pay more than ten per cent of your monthly income for your premises.  You will need the rest for inventory, advertising, wages, utilities and taxes, and other unforeseen expenses.  Only after all these have been met will you be able to see a profit.  If you're only taking in $5k/month you should be trying to increase your sales force or your work force, if you're a service-oriented business, until you can afford a business location that is not part of your house.

Answer 2

I don't know what you business is, but if you are doing stuff online or the location doesn't matter, the best place to do it is in a residential area. Go to craigslist.com (for your city) and look for rooms for rent. Then put a small bed and all your office furniture in there. Put a lock on the door. You can get a nice place for under $400 doing this.