Location, location, location: Ensure the success of your business

Do locate your target demographic based upon the product you're selling

It seems so simple, but regardless of how many people can see you, it means very little to your bottom line unless you have formulated market surveys to determine your buying audience for your product. Once you have that, you must determine if that audience is in the general vicinity of where you are considering opening your doors?

There are a myriad of websites that can assist you with this market study. City-Data is a fantastic resource as it breaks down the overall market in terms of median income, age, gender, ethnicity, crime index, etc. These are valuable resources at anyone’s disposal and can assist you in finding the perfect pocket!

Do pay attention to parking ratios

Parking or lack thereof can, and has single handedly been the death of so many small businesses. Many retailers become so enamored with a location and frontage to the traffic that they neglect a critical element in retail success – and that’s convenience to your customer.

How many times have you personally left the parking lot of your favorite restaurant because there was no parking to be found? Only to go to a subpar restaurant because of the sheer convenience. It is crucial that not only should you have exclusive rights to a designated amount of parking spaces within a reasonable distance from your business, but that your neighbors or future tenants, such as a gym, do not have the right to hog all the spaces, which many times they do. It is up to you to bring these items up during the lease negotiation process.

Do pay special attention to the existing marquee signage over the store fronts

Every city has their own rules and restrictions as it pertains to signage, but be sure that the plaza you are selecting didn’t choose aesthetic beauty of the facade at the sacrifice of practical signage. Is exterior lighting in the area adequate to attract evening shoppers? Your signage equates to well over 70% of your first year business, especially if you have recently moved locations and doing everything you can to retain your existing customer base. Remember, it comes down to the convenience of shopping with you. Make it easy for your customers to do business with you, and that of course starts with finding you in the first place.

Do survey the tenant mix within the plaza you’re considering

Are they synergistic to your operations, service or product? Just as landlords sometimes neglect this critical element with their retail center, many business owners do the same, expecting their business to flourish in any location with a “build it and they will come” mentality. This is short sidedness and a problem that can be easily avoided by simply researching who your neighbors are before you open up shop. What type of businesses would be cohesive to your operations?

Do know you get what you pay for

This may be the most important thing. There is a saying in the sales business, “Price is only relevant in the absence of value.” As a business owner that relies heavily on signage and foot traffic, don’t focus only on the rental rate. I can’t be more emphatic about this rule. So many business owners set up shop with the excuse that they are simply building a presence in a certain market and the overall store sales aren’t as important as the presence within that area. It’s always about the revenue, 100% of the time! If you cannot afford to be in a highly visible storefront, then it’s best not to take a chance in a space that no one can see.

If you’re considering buying your space or building, don’t simply get sidetracked with a low purchase price of the property. Make sure you tour the property and find out why the current owner is trying to unload his albatross. Do your own research. Go survey a plaza that has terrible visibility from the street, inferior signage, or awkward entrances such as a breezeway leading you to each space. You will notice how much turnover there is over a 12 month period. Location is paramount to your success as a retail business. You will truly get what you pay for.

Do not take your eye off your current location

Many business owners love the idea of expansion. Overhead walks on two legs. Over- expansion is similar to the issue of excessive overhead. While it may make sense in certain circumstances, expand too quickly and you may likely see overall revenues increase while your expenses supersede store sales by double. It’s never a good idea to spend $1.50 to make $1.00. Supply problems, logistic challenges, staffing issues, and financing concerns are potential obstacles in expanding. Without preparation and constant checks and balances on a daily basis, the attempt to capture more of a market can soon lead to your business becoming a financial prison.

Do not take your eye off your core competency

Many business owners and entrepreneurs in general start get “shiny object syndrome”, meaning they begin to add items to their inventory simply because they’ve expanded into a new store front or begin offering new services. This is a mistake until your well established in your new digs. Most business owners know what to do, but often times they fail to do what they know. Don’t go chasing new ventures within your business until you are absolutely certain your core business is actually benefiting from this new location.

Do not move next door to category killer retail supercenters

Years ago there was an idea that as Wal-Mart began trading up from their smaller centers to supercenters, they would help boost sales of their smaller retail neighbors in plazas they were shadowing. The opposite has actually occurred. Though the dollar stores of the world tend to do well in Wal-Mart's shadow, the mom and pop stores typically wither and die. Stay away from the category killer because they end up absorbing all the traffic that you may have been counting on.

Do not go it alone

Loopnet is to the retail business owner as E-trade is to the novice stock investor. Just because you have access to some resources doesn't necessarily mean they know what they are looking at. Leasing brokers are absolutely critical when it comes to choosing the right location. Think of them as your personal “hot spot mentor”. There is truly an art of systematically locating the standout properties in a certain area. The brokers will give you 3rd party perspective as to why you may want to set up shop at a certain location. Don’t try this at home! Leave it to the professionals so you can focus on what you are best at – building your business!

Do not underestimate your build-out costs

Landlords will give you something called T.I. Credit during negotiations of your lease. Which is tenant improvement credit or build-out allowance. Many business owners neglect the high cost of electrical and plumbing changes or additions. The average tenant doesn’t stop to think that when you move a wall, many times, you must reconfigure electrical components of the space. Many physicians neglect to factor in the cost of reconfiguring plumbing or adding bathroom facilities and increasing electrical service. These are heavy costs to a business owner and may likely burn through your Build-out allowance before you get started. The architectural plans and engineers alone could erode any TI credit you were granted. Once again, leave these costly items to the professionals and utilize their expertise as your customers do yours.