Ask any business expert to tell you the three most important factors to success in business these days, and they’ll likely tell you:
“Twitter, Facebook, and Instagram.”
At least that’s how it seems. Of course, the old cliché is actually “location, location, location.”.
The Internet may have fundamentally changed how businesses today are run, but one thing that hasn’t changed is that you still need a great storefront location. The right location can mean the difference between a booming business and a struggling one. So here’s a handy checklist of 12 things to look for when opening your next retail location.
The neighborhood reflects my target demographic
If you’re selling digital gadget, you may not want to set up next to a retirement community and/or trailer park. But if you’re next to a college campus, then you may have found a gold mine. Know who your target demographic is then open in an area that reflects that demographic. CityData.com, the SBA, and even local chambers of commerce often offer this info for free.
My neighbors will drive traffic
Consumers are often strapped for time and if they’re running multiple errands (shopping, laundry, salon, etc.) then they may prefer to do all those things in one place, like a mall. Look at large retailers your target market frequents – like maybe the Apple store for the digital gadget example – and try and be conveniently close to them so you can become part of a one-stop shop.
I have adequate parking
No matter how great a product or service is, nobody enjoys having to spend half an hour looking for parking. Make sure you have enough parking spaces to accommodate a reasonable flow of customers. Similarly, though, if you’re running a tax prep firm don’t overpay for 15 reserved spaces when you’ll never use more than three.
The location is accessible to my target market
If your market is in a densely populated urban area, you should probably try and put yourself near public transportation. If you’re depending on cars, put yourself near a traffic light or another place people won’t have to cross four lanes of traffic. Also, check with your city’s planning board to see if any major road construction is planned near your location. There’s nothing worse than opening up shop and having your street be immediately closed.
It’s an underserved area
It always helps to be the only game in town, or at least the game that makes everyone else look bad. Focus on locations where you can offer a distinct product or experience from some of your competitors, or locations where there’s a complete lack of competitors. For example, if you notice there’s not a single coffee shop within five miles of a large community, you can pretty much go ahead and print money if you open one up.
I’ve checked economic incentives
Politicians love nothing better than talking about the tax breaks and incentives they’re giving to small businesses. So if your local congressman has been talking the talk, see if he or she has walked the walk. Many underserved areas – or even entire states – have programs designed to help you out if you open in specific locations. The SBA, as well as your local government, can help you figure out where the best opportunities are.
I can recruit the appropriate employees
While opening a law firm in an “up and coming” area might make sense in terms of bringing business to an underserved community, you may find it hard to convince people with law degrees to commute a long way to get there. Similarly, if you depend on lower-paid workers, you need to make sure your business is close to public transportation.
The space can accommodate my business
Spend timing thinking about how you want to layout the location. If you want customers to have a lot of room to walk around looking at products and talking to sales associates, then make sure the location has enough space to accommodate a reasonable amount of customers. If it’s more of an office setting and you’re OK with cubicles, then you may not need much space at all. Just try to plan ahead if you think you might need to hire more employees or if you think you’ll generate more foot traffic once you get going.
I know the local laws
Minimum wage can vary from city to city and state to state. So can insurance requirements, corporate taxes, sales taxes, inspection costs, building requirements and other little hidden regulatory costs than can bleed you dry before you even open your doors. So do your homework before signing your lease, and consider hiring a lawyer if you’re unsure about anything on the lease.
The price is worth the investment
If you’re new to the world of commercial real estate, typically leases are signed by the square foot, per year. So when you hear “That place is going for $80,’ that’s what it refers to. It’s important to realize what you’re paying for, and to know whether you’re getting ripped off. Since most real estate transactions are a matter of public record, there are several sites that will tell you what commercial real estate is going for in the area. You can even use this information to try to negotiate a better deal.