2 rental-space locations, a 2.2-million-yen loss over 29 months: the full numbers behind 730,000 yen in sales and 95 bookings

“You can start with little capital.” “Hire someone and it basically runs itself.” Rental space is often described this way. Way Back Inc., an Osaka-based web-production and ad-management company, opened two locations in November 2021 and shut them both down in April 2024. In a blog post titled “Is rental space unprofitable? A business that failed and didn’t make money [sales disclosed]” (published August 3, 2026), the company lays out the complete financials for both locations in table form.

It’s rare to see the full numbers of a business that failed to turn a profit published in this much detail. Here, we check the published table against the underlying math to see exactly where the losing hand was dealt.

The published financial table

The figures cover 29 months, from November 2021 through March 2024.

The table checks out internally. Location 1: 731,514 − 227,150 − 862,820 = -358,456 yen. Subtracting the 640,400-yen upfront cost gives -998,856 yen. Location 2: 304,658 − 85,740 − 733,207 = -514,289 yen. Subtracting upfront cost gives -1,209,089 yen. Combining both locations, the total loss comes to 2,207,945 yen. The company’s stated “about 2 million yen in total losses” refers to this combined figure.

One caveat: the company’s body text states rent, “including shared-area fees, was over 70,000 yen,” but the “operating costs” line of 862,820 yen, divided by 29 months, works out to only about 29,750 yen a month. Part of what would normally be rent may be booked under a different line item, and the article’s text alone doesn’t clarify which. What follows takes the table’s numbers at face value.

What appears when you divide by month

Dividing by 29 months brings the shape of the business into sharp focus.

Location 1: sales of 731,514 yen ÷ 29 months = a monthly average of 25,224 yen. Ninety-five bookings over 29 months works out to 3.3 a month. Per-booking price comes to roughly 7,700 yen. Location 2 is worse: sales of 304,658 yen average to 10,505 yen a month, with 59 bookings averaging 2.0 a month at a per-booking price of about 5,164 yen. Working out the monthly loss: about 12,360 yen for Location 1 and about 17,734 yen for Location 2 (the company’s own text confirms the former figure directly: “a monthly loss of about 12,360 yen”).

Even so, the space wasn’t without potential. The company writes that “peak single-month sales reached 223,658 yen,” achieved during the year-end/New Year period in December and January — roughly 100,000 yen in profit that month. So a space capable of 220,000 yen a month averaged only 25,000 yen. Location 2 was even more lopsided: across all 29 months, only 2 individual months were profitable.

The commission rate is worth checking too. Location 1: 227,150 ÷ 731,514 = 31.1%. Location 2: 85,740 ÷ 304,658 = 28.1%. This roughly matches the article’s stated “commission takes 30% to 35%.” In a model where nearly a third of sales is skimmed off the top, monthly revenue of 25,000 yen simply doesn’t work.

No turning point — that’s the point

There is no moment in this case where the trajectory changed. Across 29 months, the business ran at a loss almost continuously, with a brief spike at year-end/New Year, then a return to baseline, repeating that pattern until the company exited. As the company puts it: “sales grew less than expected, and we regret not clearly deciding an exit line and letting it drag on.”

If a turning point exists at all, it sits before the business even opened. The company names three failure causes: “spent too much on upfront costs,” “should have kept rent lower,” and “should have set an early exit line”, all decisions locked in before opening. The moment the property lease was signed, a fixed cost of over 70,000 yen a month was locked in. The moment new furniture was purchased, an upfront cost of 600,000–700,000 yen was locked in. The moment no exit criteria were written down, the ceiling on total losses disappeared. The outcome of this business was decided largely before operations even began, not by how it was run afterward.

The company is candid about its motivation for entering too: “we entered simply because the market value seemed to be rising, and it ended in failure.” A growing market is no guarantee that any one specific location will fill up.

Why didn’t it fill up?

The company attributes the failure primarily to fixed costs, but the numbers point to a deeper structural issue.

The company correctly identifies that sales have a structural ceiling. For a space open 24 hours with a 12-hour daily booking rate at 1,500 yen/hour: 1,500 × 12 × 30 = 540,000 yen, the theoretical maximum. A realistic target, they state, is 1,500 × 6 × 30 = 270,000 yen. Because time-rental businesses are capped by “one room × hours available × per-hour price,” the only way to scale sales is fundamentally to add locations, which is exactly why keeping fixed costs down determines your margin. So far, this reasoning is sound.

But the company’s actual result was 25,000 yen a month, under a tenth of even the realistic 270,000-yen target. The problem, in that light, wasn’t that “the ceiling is low” but that demand stalled out well short of that ceiling. Even if rent had been trimmed to an ideal 40,000–50,000 yen, a 25,000-yen monthly revenue still wouldn’t have closed the gap.

So why did demand stall? The company answers this itself. “Marketing on our own was difficult, and customers using rental space generally find it through platforms like Spacemarket or Instabase, so ranking well within Spacemarket or Instabase mattered more to sales than SEO/MEO or social media marketing.”

There’s a negative loop here. In marketplace-driven acquisition, search ranking determines bookings, and ranking is itself a function of booking history and review count. A space that can’t accumulate early bookings never climbs the ranking, and without ranking, bookings don’t come in. With 95 bookings over 29 months at Location 1 and 59 at Location 2, that review base never reached a level that would earn strong placement on the platform. Paying a hefty toll of 30–35% commission, the company never received the exposure it was ostensibly paying for.

A contrasting case is instructive: the company also ran a rental gym in parallel. According to the article, that business turned profitable, recovered its initial investment, and was eventually sold via M&A. Same basic format (unmanned, hourly space rental) but opposite outcomes. The company cites two conditions shared by successful cases: “operate in a good location” and “keep upfront and fixed costs as low as possible.”

A footnote: the on-the-ground operations weren’t broken. Two months after opening, they secured a cleaning staff member at around 1,500 yen an hour through a local job-matching service, and by month three had reached a state where “all our company had to do was handle customer inquiries and manage sales.” What failed to turn over was the demand side, not the operations. That distinction matters.

What’s reproducible, and what isn’t

What this case offers isn’t a template for success, but conditions for reproducing failure, worth knowing in advance.

Constraints on property selection can be known ahead of time. The company writes: “many landlords were wary of the kind of complaints this business could invite and wouldn’t rent to us,” and “in fact, the unit we did end up renting was a room in an office building, not a residential building.” Because many landlords guard against noise-related complaints from neighbors, options tend to narrow to commercial-building units, which also narrows room for rent negotiation. The company’s own reflection, “you should always negotiate rent at the time of the initial contract” and “even a few thousand yen off makes a big difference to the bottom line”, genuinely matters for a business running on monthly revenue in the tens of thousands of yen.

Cutting upfront costs is also reproducible. Their upfront cost breakdown was “security deposit, key money, first month’s rent / fire insurance, lease guarantee, furniture, fixtures, and delivery fees,” and they reflect: “we got too attached to buying new furniture and fixtures.” The ideal, they write, would have kept the total under 300,000 yen with a 1–2 year payback horizon.

What’s hard to reproduce, on the other hand, is the exit decision itself. The company kept running for 2 years and 4 months while aware of the losses. The fact that the loss ran only 12,000–18,000 yen a month, a “non-fatal” amount, arguably let the decision keep getting deferred. Their closing statement (“since it’s a low-risk business, setting an exit line from the start prevents it from becoming fatal”) cuts the other way too: small, steady bleeding doesn’t stop on its own.

And the biggest non-reproducible factor is location and demand. The company’s stated conclusion (“you won’t grow sales unless you operate in a high-traffic area; naturally, rent goes up and competition increases there, but the benefit of having more people around outweighs that”) is an argument for tilting the rent-versus-traffic tradeoff toward traffic. The 29-month, 2.2-million-yen loss is, in effect, the bill for choosing the opposite.

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