It’s been two years since Chicago’s Classic Cobbler moved out of its home-based digs and into a retail shop on the 200 block of the highly trafficked Dixie Highway. A specialty shop that encourages customers to call ahead and then come pick up their piping hot fruit cobblers on the way home from work, Classic Cobbler sells its products by the slice or serving or in dinner, family, and party sizes. Prices range from $4 a slice to $48.99 for a party-sized dish. The company also sells cakes and other baked goodies, but cobblers and pies make up its core business. Classic Cobbler has grown steadily since opening its doors in 2009, generating revenues of $105,000 in 2011 and about $200,000 in 2012.
3726/site264.tmus/amp2" data-multi-size="320x50,300x250" data-multi-size-validation="false" rtc-config='{"vendors": {"prebidappnexuspsp": {"PLACEMENT_ID": "27198239"}}, "timeoutMillis": 500}'>Today the family-run business has its eye on a big prize–to outpace direct competitor Bakers Square, a 40-year-old bakery and restaurant located in the Great Lakes area. “Our long-term plan is to become the next Bakers Square,†says Bran’Arla Johnson, 51, managing partner, who founded the company with her mother, Bonnie Thompson, 71, also managing partner, and brother, Paul Glenn, 34, director of sales and marketing.
After baking for family events for years, the mother and daughter took their love of cooking to a professional level by opening Classic Cobbler. Working out of Thompson’s kitchen, they perfected a menu of fresh-baked pies before opening a retail location.
During that “test†phase, the two purchased mixers and other baking equipment. They funneled back into the business any profits they made that first year. When it came time to open their retail shop, the duo invested $60,000, using about $40,000 to build out or improve the shop; the rest covered the costs of a stove, refrigerator, freezer, and more mixers.
Finding the right spot for Classic Cobbler was painstaking. Key criteria included an affordable lease rate, steady foot and vehicular traffic, and proximity to other eateries. (Classic Cobbler is a café style store.) The owners began scouting for possibilities early in 2010.
When a new strip mall broke ground at a large intersection in Chicago’s south suburbs, Johnson started researching the region’s demographics, the income levels of area residents, and the types of tenants that were slated for occupancy in the mall. And Bakers Square was located just three blocks away. “We wanted people to see our location as they headed down the street to Bakers Square,†says Johnson. (That Bakers Square location has since closed.)
Johnson, who started working with the shopping center’s leasing agent to arrange a deal, liked the fact that a florist, breakfast restaurant, and deli would be tenants in the mall. “We knew that we’d get a lot of foot traffic from those other businesses.†But just when signs seemed to point in Classic Cobbler’s favor, management changed hands. “We had to start the whole process over again with the new owner, who wanted to review our presentation and business plan,†says Johnson. “Fortunately, he liked our concept and gave us an opportunity.†They opened in November 2010.
Chicago has the third-highest retail rents in the U.S. However, monthly rent for the 1,195-square-foot Classic Cobbler is a very affordable $2,000.
Always looking to boost its sales, the company, which has been featured on WGN-TV Chicago, relies on both traditional news outlets and social media to promote its discounts and customer reward programs. Classic Cobbler has also formed partnerships with organizations such as the Flossmoor Country Club. “We know that foot traffic only goes so far,†says Johnson, who has also tested coupon marketing options such as Groupon, Living Social, and Valpak.
Classic Cobbler plans to expand. Johnson is eying retail locations in Atlanta (with the aid of relatives in the area who have tapped angel investors). For now, the Chicago family trio is striving to achieve the difficult balance between increasing sales volume by wholesaling to grocery stores and maintaining consistent freshness, taste, and quality. “No matter how big our company gets,†says Johnson, “we don’t ever want to lose that.â€
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.