Here’s five tips to help you locate the best spot for your business operations:
1 Create a customer profile. This allows you to look at potential retail sites and overlay their demographic profiles. Does your customer profile match the area’s demographics? If not, can you persuade your customers to travel to the location?
2 Consider the financial implications. Just because the rent may be low doesn’t mean it won’t cost you more money. Most retail is marketed as “triple-net” or “NNN,” which means that you (the business owner/tenant) are required to also pay a pro-rata share of the real estate taxes, insurance, and common area maintenance as well as utilities. These costs can easily make an attractive rent unaffordable. Some landlords also require a percentage of sales.
3 Look for high foot and road traffic. Choose a visible location where there’s a lot of pedestrian traffic. Make sure you’re close to public transportation or ample parking. Avoid any barriers between your business and your customer. You want your store to be easy to get to and easy to find, whether you’re located in a strip mall or on a main street.
4 Don’t overlook tenant mix synergy. You can benefit immensely by moving into a location that already draws customers like yours, but from other, non-competing businesses (like the neighboring deli and florist in Classic Cobbler’s case).
5 Develop a “turnkey” construction plan. If you’re building out or improving your storefront, a “turnkey” plan is the best way to avoid unforeseen construction cost overruns. A turnkey construction plan is one that the landlord pays for; any cost overruns are the landlord’s responsibility. Otherwise, overruns will need to be paid out of your pocket. In that case, some landlords will allow you to finance unforeseen costs over the term of the lease. Either way, that means spending more money and having less cash on hand to develop, expand, and promote your business.