If there is one mistake I have seen many young entrepreneurs make, especially in places like Lekki, it is rushing to rent a shop without sitting down to do simple calculations. I understand the excitement. You finally want to start your business, you want a fine location, you want visibility, and you want people to take you seriously. But let me tell you from my experience as a business coach — that decision can either build your business or quietly destroy your finances.
I have had conversations with people who spent millions setting up a shop, only to start struggling within a few months. Not because their business idea was bad, but because they didn’t think through the numbers before committing. This is why I always tell people — before you pay for any shop, calm down and do small calculation first. That one step can save you from unnecessary pressure later.
Let me break this down in a very simple and practical way using a real example that many people can relate to.
The Lekki Shop Scenario Most People Ignore
Let’s assume you want to rent a shop in Lekki to sell shoes. You’ve seen a good location, the environment looks attractive, and you’re already imagining customers walking in every day. Then you ask for the cost, and here is what you get.
The rent is ₦10 million per year. The service charge is ₦2.5 million. Agency fee and other related costs come up to about ₦2 million. When you add everything together, you are looking at a total of ₦14.5 million just to secure that shop.
Now, at this point, many people stop thinking. They start looking for money, calling friends, borrowing, or even using their savings to secure the shop. But that is where the problem starts. You are focusing on paying for the shop, but you are not thinking about sustaining the shop.
Why This Simple Calculation Matters More Than Motivation
Motivation is good, but numbers are better. You can be motivated and still run into losses if your business does not make financial sense. This is something I always emphasize when I’m advising business owners — your business must work on paper before it works in reality.
Before you pay that ₦14.5 million, you need to ask yourself one simple question: can this shop pay for itself? Not emotionally, not by hope, but by actual numbers. Because at the end of the day, business is not about vibes, it is about sustainability.
This is where the small calculation comes in. It may look simple, but it reveals the truth many people avoid.
Step 1: Estimate Your Monthly Sales Volume
The first thing you need to do is estimate how many units of your product you can realistically sell every month. In this example, let’s assume you plan to sell 100 pairs of shoes monthly.
Now, I want you to be honest with yourself here. This is not the time to guess or overestimate. This is where many people make mistakes. They assume big numbers because they are excited, not because they have a solid marketing plan.
Ask yourself — with your current strategy, your current audience, and your current experience, can you truly sell 100 pairs of shoes every month? If the answer is not clear, then you already have a warning sign.
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Step 2: Break Down the Annual Rent into Monthly Cost
The next step is to convert your total shop cost into a monthly figure. This is very important because your business operates daily and monthly, not yearly.
Your total cost is ₦14.5 million. When you divide that by 12 months, you get approximately ₦1.2 million per month. That means every single month, your business must generate enough money to cover at least ₦1.2 million just for the shop.
And remember, this is only rent and related costs. We have not added salaries, electricity, inventory, marketing, or logistics yet. So the real monthly cost will be much higher than this.
Step 3: Calculate Cost Per Unit
Now this is where it gets interesting. You take your monthly shop cost, which is ₦1.2 million, and divide it by your estimated monthly sales, which is 100 pairs of shoes.
₦1.2 million divided by 100 gives you ₦12,000.
This means that every single pair of shoes you sell must contribute at least ₦12,000 just to cover rent. Not profit, not cost of goods, not anything else — just rent alone.
Take a moment and think about that.
Step 4: The Moment of Truth
This is the point where you need to be completely honest with yourself. Can your business realistically support this structure? Can you sell shoes where each pair contributes ₦12,000 for rent alone, and still remain competitive in the market?
Also, can you consistently sell 100 pairs every single month? Not just one good month, but consistently. Because business is not about one-time success. It is about consistency over time.
When I walk people through this step, many of them suddenly realize that the shop they were excited about is actually a financial trap. Not because the location is bad, but because their numbers don’t support it.
The Hidden Costs People Forget
One of the biggest mistakes I see is that people only calculate rent and ignore other expenses. In reality, rent is just one part of the equation.
You will still need to buy inventory, pay staff salaries, handle electricity bills, run promotions, and manage daily operations. All these costs will add up quickly, and if your sales are not strong enough, you will start dipping into your personal funds to survive.
That is how businesses begin to struggle. Not because they are not selling, but because the structure is too expensive to maintain.
Location Is Good, But Profitability Is Better
Let me say something that might sound uncomfortable. A good location does not guarantee a successful business. Many people believe that once they secure a shop in a place like Lekki, customers will automatically come.
But that is not always true. Without proper marketing, branding, and customer strategy, even the best location can remain quiet. And when that happens, your expensive rent becomes a burden instead of an advantage.
I always advise people to focus on profitability first before prestige. It is better to run a profitable business in a modest location than to run a struggling business in a flashy environment.
What I Usually Advise My Clients to Do
When I work with clients who are planning to rent shops, I don’t tell them not to do it. Instead, I guide them to think strategically.
Sometimes, I recommend starting small. Test your market online or from a less expensive location. Build your customer base. Understand your sales pattern. Then, when your numbers are strong and predictable, you can confidently move into a bigger space.
Other times, I suggest negotiating better terms or looking for alternative locations that reduce financial pressure. The goal is not to stop your progress. The goal is to make sure your progress is sustainable.
Business Is Not About Pressure, It Is About Strategy
One thing you must understand is that business is not a competition. You don’t need to prove anything to anyone by renting an expensive shop. What matters is that your business is working and growing.
Too many people are under pressure to “look successful” instead of actually building something solid. They rush into big commitments without proper planning, and later, they start struggling to keep up.
When you remove pressure and focus on strategy, your decisions become clearer. You stop chasing appearance and start building real value.
Conclusion
Let me be very clear — I am not saying you should not rent that shop. What I am saying is simple. Do your calculations. Think deeply. Make an objective decision based on numbers, not emotions.
That small calculation we just did can save you millions of naira and months of stress. It can help you avoid a situation where your business is constantly under pressure just to survive.
Before you commit to any shop, ask yourself the hard questions. Run the numbers. Be honest about your capacity. And then decide.
Because at the end of the day, a smart decision at the beginning can save you from regret later.
Ngwa, go and calculate well before you pay 😄💰