Population and Your Customer
If you are choosing a city or state to locate your retail store, research the area thoroughly before making a final decision. Read local papers and speak to other small businesses in the area. Obtain location demographics from the local library, chamber of commerce or the Census Bureau. Any of these sources should have information on the area's population, income and age. You know who your customers are, so make sure you find a location where your customers live, work and shop.
Accessibility, Visibility and Traffic
Don't confuse a lot of traffic for a lot of customers. Retailers want to be located where there are many shoppers but only if that shopper meets the definition of their target market. Small retail stores may benefit from the traffic of nearby larger stores.
- How many people walk or drive past the location.
- Is the area served by public transportation?
- Can customers and delivery trucks easily get in and out of the parking lot?
- Is there adequate parking?
Depending on the type of business, it would be wise to have somewhere between 5 to 8 parking spaces per 1,000 square feet of retail space.
When considering visibility, look at the location from the customer's view point. Can the store be seen from the main flow of traffic? Will your sign be easily seen? In many cases, the better visibility your retail store has, the less advertising needed. A specialty retail store located six miles out of town in a free standing building will need more marketing than a shopping store located in a mall.
Signage, Zoning and Planning
Before signing a lease, be sure you understand all the rules, policies and procedures related to your retail store location. Contact the local city hall and zoning commission for information on regulations regarding signage. Ask about any restrictions that may affect your retail operation and any future planning that could change traffic, such as highway construction.
Competition and Neighbors
Other area businesses in your prospective location can actually help or hurt your retail shop. Determine if the types of businesses nearby are compatible you're your store. For example, a high-end fashion boutique may not be successful next door to a discount variety store. Place it next to a nail or hair salon and it may do much more business.
Besides the base rent, consider all costs involved when choosing a retail store location.
- Who pays for lawn care, building maintenance, utilities and security?
- Who pays for the upkeep and repair of the heating/air units?
- If the location is remote, how much additional marketing will it take for customers to find you?
- How much is the average utility bill?
- Will you need to make any repairs, do any painting or remodeling to have the location fit your needs?
- Will the retailer be responsible for property taxes?
The location you can afford now and what you can afford in the future should vary. It is difficult to create sales projects on a new business, but one way to get help in determining how much rent you can pay is to find out what sales similar retail businesses are making and how much rent they're paying.
If you plan to work in your store, think about your personality, the distance from the shop to home and other personal considerations. If you spend much of your time traveling to and from work, the commute may overshadow the exhilaration of being your own boss. Also, many restrictions placed on a tenant by a landlord, management company or community can hamper a retailer's independence.
Your retail shop may require special considerations. Make a list of any unique characteristic of your business that may need to be addressed.
- Will the store require special lighting, fixtures or other hardware installed?
- Are restrooms for staff and customers available?
- Is there adequate fire and police protection for the area?
- Is there sanitation service available?
- Does the parking lot and building exterior have adequate lighting?
- Does the building have a canopy that provides shelter if raining?
- What is the crime rate in the area?
- Are there (blue laws) restrictions on Sunday sales?
Don't feel rushed into making a decision on where to put your retail store. Take your time, research the area and have patience. If you have to change your schedule and push back the date of the store's opening, than do so. Waiting to find the perfect store location is better than just settling for the first place that comes along. The wrong location choice could be devastating to your retail business.