Breaking New Ground

When Will Gist went searching for a location for his new Maui Wowi Fresh Hawaiian Blends franchise, he had specific criteria in mind. For starters, his smoothie business had to be near a high volume of foot traffic and situated in an area where customers would linger as a captive audience for his products. After opening his first location in June 2003, Gist discovered that there is more to deciding where to set up shop than having great traffic flowing past your business.

“I found out that all that glitters is not gold,” says Gist, owner of 15-employee Gist Enterprise L.L.C., in Washington, D.C. The “glitter” for Gist, 30, was the 20,000-seat MCI Center, a state-of-the-art arena that’s home to the NBA’s Wizards, NHL’s Capitals, and WNBA’s Mystics. Realizing that the center attracts thousands of fans in need of thirst quenching, the new business owner jumped at the chance to set up shop in the complex but quickly found out that in return, he had to pay too much to sell products at the venue.

“They didn’t want to negotiate any lower for the space, so I had to go with what they offered; it just didn’t add up,” says Gist, who opened another company in December 2003 in the Washington Convention Center, where he now runs three “much more profitable” kiosks.

Now, Gist has his eye on Dulles International Airport, where he hopes to position a stand between the two busiest terminals. And while his first year in business wasn’t as profitable as he would have liked, Gist, whose firm brought in close to $200,000 in sales in 2004, says he “wouldn’t change a thing” about his early location decisions. “The MCI Center was a gold mine in terms of volume,” Gist adds, “but the downside was that I had an unfavorable deal that just didn’t map out.”

Location Planning 101. Most new and expanding businesses can relate to Gist’s early learning curve, especially since finding the right location can mean the difference between success and failure. Every business has different needs. A small retailer probably needs high foot

traffic and ample parking, for example, while a financial services firm would likely opt for a location near its best customers. A small dry cleaning service would need a location as far as possible from its nearest competitor, while a mid-sized manufacturing firm would want space in an industrial park, where lease rates would be lower than retail or commercial locations.

“Where you place your business can have significant impact on your firm’s success,” says Ronnie L. Bryant, president and COO of the Pittsburgh Regional Alliance, a regional marketing and economic development organization that, as part of its mission, helps firms select locations for their new and expanding operations. “For most companies, that means finding somewhere that’s accessible and visible for customers and affordable for the firm itself.”

For companies in expansion mode, Bryant advises looking for new locations positioned far enough away from the original spot to avoid cannibalizing that location’s business. Also make sure