7 Things You Need To Know About Selecting a Retail Location
7 Things You Need To Know About Selecting a Retail Location
1. Type of Business.
Well before hitting the streets to look for a location, take a hard look at the type of business you will be operating. For example, how many different kinds of products will you be selling? Your product mix will have an impact on such things as the amount of square footage and storage space required at the location. If you are a service provider, factors such as office space will be an important consideration.
Start brainstorming or "white-boarding" ideas of what your target audience might expect when they enter your store - make a list of all the factors you can think of including display space, # aisles, aisle width, shipping/receiving area, storage space, office space, in-store traffic flow, etc. Once you visualize what the shopping experience looks like for your customer, you will gain a better idea of what will be required in a location.
2. Demographics.
Another critical component of retail location selection is understanding your target market, both in terms of your target shopper and the geographic area surrounding your proposed location. Once you have established your target market i.e. gender, age, income level. etc. start researching some of the following information:
* What neighborhoods are home to your target market?
* How far will prospective customers travel to shop at your location?
* What are the statistical trends in a proposed location i.e. population growth; income growth; aging trends, etc? How might this affect your store 5 or 10 years after locating?
* What are the employee demographics in particular areas? With labour shortages becoming an ongoing challenge for retailers, does your proposed location have access to potential full time and part-time employees?
3. Competition.
Make sure that you have thorough knowledge of all the competitors in a proposed location, good and bad.
Bad competitors are those that will have a negative effect on your business. Some examples might include retail stores that might be selling the exact same products (at a discount) or stores that attract the opposite target audience as your retail operation.
Good competitors are retail stores that compliment your business by drawing a similar target audience to your store's surrounding area. A good example are retail "pockets" that exist in many cities - shopping destinations that attract larger numbers of consumers by offering complimentary stores in close proximity to one and other i.e. fashion districts, areas with a high concentration of art galleries, auto malls, etc.
4. Traffic Patterns.
It's also important to know how vehicle and pedestrian traffic patterns might affect business at a proposed location. Some things to look for include:
* Access to the store by traffic moving in both directions (both by car and on foot).
* Number of cars passing the store location.
* Number of pedestrians walking by the location.
* Proximity to public transit.
David Gray, Principal of DIG360, a retail consulting firm in Vancouver, BC, shares some suggestions about scoping out store locations in a recent article in BC Business. “If you’re savvy about it, you do a whole lot of looking. You’d be in a car and do it, and then you’d be on foot. And you’d go weekends and weekdays, just to make sure there’s not a big traffic difference. Find out which side is the busy side of the street, and check out where the parking is."
5. Merchant Associations.
An often overlooked factor when considering a location is the presence and strength of a local merchant association. According to the The BC Women's Enterprise Centre, merchant associations can offer a number of benefits to your retail operation:
* A strong merchant's association can promote and maintain business in a given area.
* The presence of an effective merchants' association can strengthen your business and save you money through group advertising programs, group insurance plans, and collective security measures.
* A strong merchants association can accomplish through group strength what an individual store owner couldn't even dream of. Some associations have induced city planners to add highway exits near their shopping center. Other have lobbied for -- and received -- funds from cities to remodel their shopping centers, including extension of parking lots, refacing of buildings, and installation of better lighting.
* Merchants' associations can be particularly effective in promoting of stores using common themes or events and during holiday seasons. The collective draw from these promotions is usually several times that which a single retailer could have mustered.
6. City By-Laws, Zoning and Planning.
Understanding all the "rules" and plans your municipality has laid out is very important when it comes to selecting a location - your retail store's long term success could depend on it. Some things to consider are:
* Zoning - Are there any restrictions that might prevent you from doing specific renovations or leasehold improvements?
* By-Laws - What are some of the laws that might have an affect of your retail operation? For example, are you able to use the space in front of your store for promotions...are you restricted from operating during certain hours, etc?
* Planning - Are there any major development plans that could impact your retail operation? Is there any major road construction planned close to your store?
7. Don't Rush - Be Patient.
It's very tempting to jump at a location you fall in love with - but just like in residential real estate, "head over heart" is the best approach when it comes to picking a retail location.
David Gray cautions those who want to act on impulse. "You could just destroy your business being in a bad location. A bad spot might well be (a real trendy area); it might be that you can’t take a left turn or there’s no parking, so don’t rush into anything until you know it's perfect, or close to it."
The BC Women's Center has the following advice:
"Selection of a retail location requires time and careful consideration. It should not be done in haste just to coincide, say, with a loan approval. If you haven't found a suitable location, don't plan to open until you're sure you've got what you want. Put your plans on hold; don't just settle for a location you hope might work out. A few months' delay is only a minor setback compared to the massive -- often fatal -- problems that occur from operating a retail business in a poor location."
7 Things You Need To Know About Selecting a Retail Location - To learn more about this author, visit Mark Smiciklas's Website.
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Selecting a location for your retail store is one of the most important decisions you will make as a small business owner. Picking the right location can lead to success and profits - choosing the wrong spot for your retail operation could put you out of business.
1. Type of Business.
Well before hitting the streets to look for a location, take a hard look at the type of business you will be operating. For example, how many different kinds of products will you be selling? Your product mix will have an impact on such things as the amount of square footage and storage space required at the location. If you are a service provider, factors such as office space will be an important consideration.
Start brainstorming or "white-boarding" ideas of what your target audience might expect when they enter your store - make a list of all the factors you can think of including display space, # aisles, aisle width, shipping/receiving area, storage space, office space, in-store traffic flow, etc. Once you visualize what the shopping experience looks like for your customer, you will gain a better idea of what will be required in a location.
2. Demographics.
Another critical component of retail location selection is understanding your target market, both in terms of your target shopper and the geographic area surrounding your proposed location. Once you have established your target market i.e. gender, age, income level. etc. start researching some of the following information:
* What neighborhoods are home to your target market?
* How far will prospective customers travel to shop at your location?
* What are the statistical trends in a proposed location i.e. population growth; income growth; aging trends, etc? How might this affect your store 5 or 10 years after locating?
* What are the employee demographics in particular areas? With labour shortages becoming an ongoing challenge for retailers, does your proposed location have access to potential full time and part-time employees?
3. Competition.
Make sure that you have thorough knowledge of all the competitors in a proposed location, good and bad.
Bad competitors are those that will have a negative effect on your business. Some examples might include retail stores that might be selling the exact same products (at a discount) or stores that attract the opposite target audience as your retail operation.
Good competitors are retail stores that compliment your business by drawing a similar target audience to your store's surrounding area. A good example are retail "pockets" that exist in many cities - shopping destinations that attract larger numbers of consumers by offering complimentary stores in close proximity to one and other i.e. fashion districts, areas with a high concentration of art galleries, auto malls, etc.
4. Traffic Patterns.
It's also important to know how vehicle and pedestrian traffic patterns might affect business at a proposed location. Some things to look for include:
* Access to the store by traffic moving in both directions (both by car and on foot).
* Number of cars passing the store location.
* Number of pedestrians walking by the location.
* Proximity to public transit.
David Gray, Principal of DIG360, a retail consulting firm in Vancouver, BC, shares some suggestions about scoping out store locations in a recent article in BC Business. “If you’re savvy about it, you do a whole lot of looking. You’d be in a car and do it, and then you’d be on foot. And you’d go weekends and weekdays, just to make sure there’s not a big traffic difference. Find out which side is the busy side of the street, and check out where the parking is."
5. Merchant Associations.
An often overlooked factor when considering a location is the presence and strength of a local merchant association. According to the The BC Women's Enterprise Centre, merchant associations can offer a number of benefits to your retail operation:
* A strong merchant's association can promote and maintain business in a given area.
* The presence of an effective merchants' association can strengthen your business and save you money through group advertising programs, group insurance plans, and collective security measures.
* A strong merchants association can accomplish through group strength what an individual store owner couldn't even dream of. Some associations have induced city planners to add highway exits near their shopping center. Other have lobbied for -- and received -- funds from cities to remodel their shopping centers, including extension of parking lots, refacing of buildings, and installation of better lighting.
* Merchants' associations can be particularly effective in promoting of stores using common themes or events and during holiday seasons. The collective draw from these promotions is usually several times that which a single retailer could have mustered.
6. City By-Laws, Zoning and Planning.
Understanding all the "rules" and plans your municipality has laid out is very important when it comes to selecting a location - your retail store's long term success could depend on it. Some things to consider are:
* Zoning - Are there any restrictions that might prevent you from doing specific renovations or leasehold improvements?
* By-Laws - What are some of the laws that might have an affect of your retail operation? For example, are you able to use the space in front of your store for promotions...are you restricted from operating during certain hours, etc?
* Planning - Are there any major development plans that could impact your retail operation? Is there any major road construction planned close to your store?
7. Don't Rush - Be Patient.
It's very tempting to jump at a location you fall in love with - but just like in residential real estate, "head over heart" is the best approach when it comes to picking a retail location.
David Gray cautions those who want to act on impulse. "You could just destroy your business being in a bad location. A bad spot might well be (a real trendy area); it might be that you can’t take a left turn or there’s no parking, so don’t rush into anything until you know it's perfect, or close to it."
The BC Women's Center has the following advice:
"Selection of a retail location requires time and careful consideration. It should not be done in haste just to coincide, say, with a loan approval. If you haven't found a suitable location, don't plan to open until you're sure you've got what you want. Put your plans on hold; don't just settle for a location you hope might work out. A few months' delay is only a minor setback compared to the massive -- often fatal -- problems that occur from operating a retail business in a poor location."
7 Things You Need To Know About Selecting a Retail Location - To learn more about this author, visit Mark Smiciklas's Website.
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