Location, Location, Location - Black Enterprise
Black Enterprise Magazine January-March 2019 Issue

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ENT_locationFinding the right location for your small business may seem as simple as finding a place you can afford. Whether it’s a kiosk, storefront, mall store, high-profile flagship, or suburban stand-alone, not every location is suitable for every business. But before you make a commitment, make sure you are aware of the advantages and disadvantages of leasing one type of location over another.

Where you settle down, your proximity to other stores, and the demographic of nearby shoppers can determine how well your product or service sells, but the lease you sign will determine how much you actually profit.

Before signing a lease, find out the mall developer or landlord’s “occupancy cost to sales ratio, says Barry Wright, a commercial real estate broker at Newmark Knight Frank. The OCR is usually the aggregate cost of rent plus expenses for all tenants of a certain size divided by the total sales of those tenants. The OCR helps developers decide how much to charge each tenant for rent. If the area’s OCR is high then you might not be able to sell enough merchandise to afford the occupancy costs.

“Occupancy cost ratios vary for each property type and merchandising category. High-margin retailers, such as jewelry stores in regional malls, can have ratios in excess of 20%,” says Faith Hope Consolo, a retail broker at Prudential Douglas Elliman Real Estate in New York.

Exposure is also an important standard by which to measure a possible location. Most businesses require high exposure to foot and vehicle traffic, but there are some businesses where location is not as important, and traffic can be drummed up through word of mouth and the brand’s reputation. Ask yourself who are your customers and what will lead them into your store. Based on that answer, find out if you will be able to generate sales and maintain healthy profit margin at this location? Finally, find out if the zoning for the area permits your type of business.

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Marcia Wade Talbert

Marcia is a multimedia content producer focusing on technology at Black Enterprise Magazine. In this capacity she writes and assigns stories to educate readers about social media; digital integration; gadgets, apps, and software for business and professional development; minority tech startups; and careers in STEM (Science, Technology, Engineering, and Mathematics). In 2012, she received two Salute to Excellence Awards from the National Association of Black Journalists and was recognized by Blacks in Technology (BiT) as one of the Top 10 Black achievers in the tech arena for 2011 at SXSW in Austin, Texas. She has spoken about technology on panels for New York Social Media Week, at The 2012 Rainbow/PUSH Wall Street Summit, as well as at Black Enterprise’s Entrepreneurs Conference and Women of Power Summit. In 2011, SocialWayne.com chose her as one of 28 People of Color Impacting the Social Web, and through crowdsourcing she was listed as one of BlackWeb2.0's/HP's 50 Most Notable African American Tastemakers in Social Media and Technology for 2010. Since taking on the role of Tech editor in September 2010, she has conceived and produced five cover stories on Technology and/or STEM and countless articles, videos, and slideshows online. Before joining BlackEnterprise.com as an interactive general assignment reporter in 2008, she freelanced with Black Enterprise beginning in 2003 while working as the technical editor at Prepared Foods magazine. There she further honed her writing skills and became an authority on food ingredients, including ingredients used in food fortification and enrichment. Meanwhile, her freelancing with Black Enterprise and BlackEnterprise.com helped her stay current on issues pertaining to the financial and business welfare of African Americans. As a general reporter for Black Enterprise she attended and reported on the Democratic and Republican National Conventions, where she interviewed Valerie Jarrett, senior advisor and assistant to President Barack Obama and U.S. Attorney General Eric Holder. Marcia has a Bachelor of Science degree in Agriculture with an emphasis in food science from the University of Minnesota, and a Master of Science degree in journalism from Roosevelt University in Chicago. En route to her secondary degree, she served as the editor-in-chief of the Roosevelt University Torch, a weekly, student-run newspaper. An avid photographer and videographer, Marcia is one of several employees at BLACK ENTERPRISE who interned for the publishing company as a college student. She lives in New Jersey with her husband, a food scientist; her seventeen-month-old daughter; and “The Cat”, but still considers Chicago home.

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