5 tips for conducting a thorough site review
The importance of choosing the right geographic location for your brick-and-mortar store or service business should not be underestimated. “Whereas a good location may not guarantee success, a bad location will almost always guarantee failure,” writes Marc Joseph in his book The Secrets of Retailing, Or: How to Beat Wal-Mart! Business owners must consider a variety of factors — some obvious, others more opaque — to help them pick the best location for their new outposts. Here are five:
Your customers.
Rod Bodner, co-owner of The Laundromat Guys, has been buying, selling, locating and relocating laundromats for more than 20 years. He says that the “quest for the dream location” is about more than a demographic study and can be “compared to an onion, where one must peel layers to get the desired information.”
Peeling the first layer begins with a site review. Think about your existing and potential customers. Are they here? Is this business location convenient to them? Analyze foot and vehicle traffic patterns. Be thorough in your due diligence and keep an eye out for potential hindrances. “Are there any road projects slated for the future that may change traffic patterns or reroute flow away from the store? Aerial views of your market, available on the Internet, can be helpful in identifying the presence of natural barriers and overall traffic patterns,” says Bodner.
Think about parking, security, ease of access, public transportation and storefront visibility.
Neighborhood.
Consider the other businesses in your neighborhood. Big-name stores tend to have tried-and-true approaches to evaluating locations, so if those are in the area and have similar customers to yours, that could be a good sign. Are there popular restaurants? People may need to kill time while they wait for a table. Is there a movie theater? That will generate a steady flow of potential new customers. Keep your target customer in mind as you take a common-sense approach to evaluation. For example, if your customers are families, look for the presence of schools. Bodner’s customer base is the mobile renter population, so he notes the number of mailboxes, electric meters and cars in the driveway to evaluate the percentage of renters in the area.
Competition.
Analyze the competition. Some competing stores could be a good thing, depending on your industry. It probably means your customers are here, but you have to consider whether the market is large enough to support a new addition. “The first question shouldn’t be ‘Should there be another store here?’ but rather, ‘Should I have a store here?’ Examine what the competition does well and doesn’t do well. What will your store do better? “What owners forget is that this is a market-share play, meaning you aren’t creating business, you’re merely trying to gain the largest share of the business within the market,” says Bodner.
Personal preference.
Think about how the new office location will affect you, urges Joseph. Do not overlook the significance of the convenience and lifestyle factors for you and/or the individuals who will be running the location. Is this a desirable place to do business? Consider the type of hours your store will have to maintain and the distance from where you live. Because such factors will influence the mood, atmosphere and culture of your business location, they will also affect your customers.
Cost.
It’s not the right location if you can’t afford it. You will need to confirm that the price per square foot fits your business model and budget. A commercial real estate professional can help you understand the market, negotiate the best price possible, and work with the landlord to accommodate build-out costs.
A common mistake business owners make when evaluating office locations is failing to go deep enough with their review. You don’t want to learn about a rezoning issue or exorbitant build-out costs after you’ve signed on the dotted line. “Don’t just seek one definitive answer; keep peeling layers off that onion. There’s no such thing as too much information when it comes to evaluating a potential location for your business,” says Bodner.
