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Revenue Per Square Foot Formula:
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Revenue Per Square Foot is a key performance metric used in retail and commercial real estate to measure how efficiently a space is generating revenue. It's calculated by dividing total revenue by the total area in square feet.
The calculator uses the Revenue Per Square Foot formula:
Where:
Explanation: This metric helps businesses understand how much revenue each square foot of their space is generating, which is crucial for evaluating retail performance and space utilization.
Details: This metric is essential for retailers to evaluate store performance, compare different locations, make decisions about expansion or contraction, and optimize product placement and store layout.
Tips: Enter total revenue in dollars and area in square feet. Both values must be positive numbers. The calculator will compute the revenue generated per square foot.
Q1: What is a good revenue per square foot?
A: This varies significantly by industry and location. In retail, $300-$400 per square foot is generally considered good, while premium locations can exceed $1,000 per square foot.
Q2: How often should I calculate this metric?
A: It's typically calculated monthly, quarterly, and annually to track performance trends and seasonal variations.
Q3: Does this include all revenue sources?
A: Yes, it should include all revenue generated from the space, including sales, services, and any other income sources.
Q4: Should area include non-selling space?
A: It depends on the purpose. For overall efficiency, include total area. For product performance analysis, consider using only selling area.
Q5: How can I improve my revenue per square foot?
A: Strategies include optimizing product mix, improving store layout, enhancing visual merchandising, and increasing sales conversion rates.