Location, location, location

Written by Nate Hendley

If you’re like many retailers, you choose the location of your stores mainly by gut-feeling. But when it comes to making this important decision, you simply cannot depend on the famous saying, “Build it and they will come.” In fact, you might have the best prices or selection in town, but choose the wrong location, and your business could still fail. Maureen Atkinson, a senior partner with Toronto retail consultancy J.C. Williams Group, offers the following advice on how to choose a location that will thrive.

Locate your competitors

It’s not uncommon for retailers to choose a store location based on a lack of competition in the area. In fact, picking a location near successful competitors can be advantageous. “If you go to a place where your competitors are,” says Atkinson, “they’ve already proven there’s demand in that spot.”

Shoppers often prefer to patronize an area with several stores selling the same product. They like having options, and the ability to compare prices, service and quality. In addition, competition can keep you from getting complacent.

Think carefully about pioneering — that is, being the first retail outlet in a particular area. There might be myriad reasons why an area doesn’t have any stores like yours.

Space out

Decide in advance exactly how much space you truly need. Your space requirements are largely dependent on the product you sell. A CD store can thrive in a tiny space. A mattress store can’t. “There are good reasons why a lot of furniture stores are in suburban locations,” says Atkinson. “That’s where you’re going to get larger spaces at reasonably affordable prices.”

Bigger isn’t always better

Are you on a tight budget and having trouble deciding between a small store in a great location and a spacious store on the outskirts of town? Atkinson almost exclusively recommends the former. “If I was concerned about cost, I would always trade a smaller store for a better location,” she says. For one thing, it’s always possible to find ways to become more productive in a smaller space, and you can try to expand if the opportunity presents itself.

Mall versus Main Street

Mall locations have their pros and cons, but they might not even be a real option for you. “Malls aren’t interested in independents,” says Atkinson. In fact, she says, a mall that encourages independent stores to set up shop “is probably not doing well.”

Setting your sights on a higher-end mall? Even if the property managers express interest in your store, you’ll wait a while, as there will likely be a long waiting list of retailers looking to sign leases. And if you do score a spot in a busy mall, it’ll cost you big bucks. “You have to measure the value of what the mall is going to deliver to you,” suggests Atkinson.

All that said, shopping malls can be ideal locations for certain kinds of businesses. “If you’re in the fashion business,” says Atkinson, “then you should always be looking at a mall.”

Park it

In bigger cities, parking is a major issue. Your location, client base and the type of product you sell will determine your parking considerations.

Location: If you’re located at in the heart of downtown — say, Toronto’s popular Yonge & Bloor area — then parking might not be a huge concern, because customers can access your store by foot or public transit. “But if you’re in the middle of nowhere, without parking and transit, that becomes a huge problem,” says Atkinson.

Client base: A record store catering to teenagers, for example, can get away with limited or no parking, as can stores where customers come in only briefly, such as dry cleaners.

Product type: If your product is at all heavy and must be carried away by the customer, then picking an area with adequate parking is an absolute must.

Do your homework

A quick look at your potential new location won’t suffice. “Don’t just go and look at the real estate and leave. Go at different times of the day, different times of the week,” says Atkinson. “Check the level of traffic.” Before signing a lease, you should feel 100% sure that you’ll be happy.

Read other pointers on How To contribute to your business success!

© 2003 Nate Hendley

Originally appeared on PROFITguide.com