DECISION BRIEFDecision
Goal
Profitable expansion without compromising cash reserves.Constraint
Keep at least six months of operating costs in reserve.Options considered
| Option | Upfront | What it tells us | |
|---|---|---|---|
| Full second location | £180,000 | Highest upside, but uses most of the reserve before demand is proven | NOT YET |
| Three-month pop-up | £25,000 | Tests demand in the new area at a fraction of the cost | RECOMMENDED |
| Postpone expansion | £0 | Protects cash, but leaves the demand question unanswered | FALLBACK |
Key financial considerations (full location)
| Fixed costs | £14,000 / month | Contribution margin | 37% |
| Break-even revenue | ≈ £37,800 / month | Expected revenue | £62,000 / month |
| Expected contribution | ≈ £9,000 / month | Payback on £180,000 | ≈ 20 months |
Main uncertainty
Whether enough new demand exists, or the second site would mostly draw customers from the first.What would change this
If the pop-up points to less than ≈ £37,800 a month in new revenue, a full location would not break even.Next action · Learn
Run the three-month pop-up and track new versus existing customers before committing to a lease.Indicative calculations based on the founder’s own figures. Illustrative example only.