So, you're ready to set up shop somewhere selling your wares to the public. Good for you. There are some extremely important considerations that you should make when choosing a business location. Let's look at a few things to consider.
1. How are your customers going to use you?
This is a very important first consideration that many small businesses miss. For example: if you are opening a lunch counter, you may do better in an area where people work rather than where they live. If you are selling auto parts, you want to be fairly close to the local repair shops. Think about when and how your customers will access your business.
2. Look at Logistics
It's been said that good generals study tactics, while brilliant generals study logistics. Think about your business logistically:
- Is there enough parking?
- If you need a loading dock, is there one?
- Will there be any special infrastructure needs - power, water, trash removal etc.?
- Is access to the location easy for the customers, or will they get lost?
- Is the location in a part of town with increased crime at night which may cost you dearly in insurance or shrinkage?
3. Good Traffic Bad Traffic
As a high-schooler I worked at a shoe store in the local mall. The brilliant mall promoters would bring in soap opera starts to do autograph signings in center court. The mall would be filled with literally screaming teenagers, and you couldn't park or even drive the streets near the mall. The problem with this is - none of the tens of thousands of people the mall brought in foot traffic bought anything. These were some of our worst sales days of the year.
Not all foot or drive-by traffic is created equal. However, some locations will charge huge prices for the amount of foot traffic.
It's a good idea to be near other businesses that attract customers like yours. Do you ever wonder why car dealerships and restaurants will open so close together? Because car shoppers and diners will go to an area to window-shop and everyone benefits from the spillover.
At least spend time in the area you are considering and notice the other businesses and who's shopping there.
4. Consider Cost
Retail space in malls is pricey. The foot traffic and promotions malls do can bring in a lot of business. However, there's still high turnover at many malls. The most expensive spaces are not always the most profitable.
5. Look at History
Every town has at least one retail or restaurant location that spits out business failures over and over again. It always amazes me to see a space where a new restaurant opens at least once a year. If a space seem to have a high rate of business failure, maybe there's something not working there.
Sometimes it's parking or lack of anchor businesses.
These are just a few of the considerations for picking locations. Picking a good location is one of the most important decisions you can make for your business.
J D Moore - Marketing Comet