A nail salon is hoping to open a new location on the other side of town. An ideal space becomes available, but the rent is very high and the salon already has some debt from repairs after a minor earthquake. It is significantly more than comparable rent in the area. Should the nail salon take the space even though it will require using credit since it much more expensive?

Question

A nail salon is hoping to open a new location on the other side of town. An ideal space becomes available, but the rent is very high and the salon already has some debt from repairs after a minor earthquake. It is significantly more than comparable rent in the area. Should the nail salon take the space even though it will require using credit since it much more expensive?

• No, the business is better off waiting for a more affordable space.
• No, the nail salon should only expand if it requires using no credit.
• Yes, having the right location is more important than sticking to the budget.
• Yes, the rents in the area will probably go up anyway, so there is no point in waiting.

Answer 1

I would recommend that the nail salon should not take the space if it requires using credit, as it is already in debt from repairs after a minor earthquake. It would be better to wait for a more affordable space or explore other options for expansion that do not involve taking on more debt. Sticking to the budget and managing existing debt should be the top priorities in this situation.