Analyst Sohum Mehta on Identifying Prospective Locations for New Businesses
Few things are as important as location when a retail business is first opening or expanding its operations. We have all heard the old, one word saying, ‘location, location, location,’ as it relates to having a successful business. The repetition of the word only serves to highlight and remind us of its true importance.
Selecting the right space to house a growing business can mean the difference between success and failure. So, business owners must choose wisely.
With that in mind, this is a brief list of things to consider when looking for the best retail space for your business.
1. What type of space do you need?
Does your business require a kitchen or dressing rooms? How much space do you need? These are things to consider when drafting a list you will present to a commercial real estate agent.
It’s also crucial to think about your target demographic when you’re selecting a retail location. You need a space where your target demographic will go or where your target demographic tends to congregate in. You can research areas of the city to see where the best traffic for your business resides.
“Do your due diligence,” says Michael Rodelle, director of real estate for the Papa Gino’s Inc. “Get a demographic overview of the area you’re looking at-age, income, households, etc.”
When writing your location wish list also include a budget of what you are looking to spend, don’t forget to allot for utilities, maintenance and upkeep as well.
2. Hire the right real estate broker.
Now that you have compiled a list of what you need for your business, it is time to hire the right commercial real estate broker. Look for a broker who has experience finding businesses like yours the right retail space.
A professional broker should have no problem finding a client to serve as a reference. Ask to speak to this reference. When you do, ask how the broker meet their needs.
“I believe that in every town, there is some real estate professional who knows his or her city backward and forward,” said Blake Tartt, president and CEO of commercial real estate firm New Regional Planning. “The really with-it real estate person is studying all those trends, traffic patterns and demographics.”
3. Scout Your selection
Once the broker has presented various options to you and you have narrowed down your choices to a select from, take the time to properly vet and scout each location. Sohum Mehta, a commercial banking analyst, advises that potential business location should be thoroughly researched before signing any contracts.
“I recommend going there and counting the foot traffic and customers over an hour, during peak and off peak hours, on weekdays and weekends, during inclement weather whatever various situations that can affect business,” explained Sohum Mehta. “This will give business owners a deep understanding of what to expect when they set up shop and a realistic outlook of what type of revenues to expect.”
Thanks in part to competition from the internet, it is great time to open a brick and mortar business. Rents are low and landlords, more than ever, are in the mood to negotiate with business owners, which is advantageous for those just starting out their business. Utilizing these tips can help any business owner make an informed decision when it comes to selecting their next retail location.
This post has been sponsored by Jeremy Vincent; image by COLLINS: via Wikimedia Commons