12 Tips for Choosing a Location for Your Small to Medium Sized Business
Brick-And-mortar stores are in a very interesting position.
As we mentioned in our post Transitioning from Retail Stores to Retail Experiences – The Store of the Future, business districts have gone from main streets, to strip malls, to malls, and now it’s a whole new world with additions such as the Internet and outlets.
This week, a local journalist posted a bunch of photos of old shopping areas around our county. I went on a trip down memory lane, and after reading people’s comments, I felt as if I remembered their memories as well. There was so much reminiscing around when those major shopping complexes first opened, the stores they used to go to, where they hung out, and how everyone would move from one shopping area to another as the years went on. Though I always knew it and always say it, it finally set in for me. Storefronts have always changed and will always continue to change.
We’re in a new wild, wild, west but the one thing that’s not so different is our mission to be so appealing to customers that they’ll visit us no matter where we are. If your business is relatively new, choosing an area that’s not quite developed yet may be a big gamble. So, we compiled a list of things to take into consideration when looking at retail options.
Guardrails for deciding on a location for your small or medium business:
- All shopping areas are going through a change whether you’re looking at a mall that was popular in the 80’s and 90’s or a historic main street that’s been relatively vacant for over 40 years. Get a feel for what’s happening, what’s happened, and what’s going to happen.
- Understand what the vision for the shopping area is. For a mall to want to be what it was in its prime or a historic main street to hold out for American Eagle is not realistic. They need to serve a need for modern times.
- A lot of historic shopping districts are in the process of revitalization so it may be tempting to purchase a building rather than lease somewhere more developed. This option is appealing for a few reasons. Banks are more likely to talk with you about loans if your business has been open less than two years and it gives you equity. Some of the other factors on this list are really important, too. Your business has to be able to survive the time it takes for the area to turn over.
- Take note of the current businesses that exist and compare it against the vision of the area. Those businesses should reflect the community and not be complete remnants of “what is left”.
- Evaluate the competition in the immediate area and then in the broader city/county. Having an idea of whether there are two competitors versus 14 around you may be crucial and help decide what area is best.
- Ask local business owners or the town council about whether there is a small business alliance group of some sort. Having a group like this demonstrates how the businesses are working together to create a unified shopping area. Zoning standards may have changed but low priced real estate attracts developers who may not care about what businesses come and go from their properties.
- Inquire about the current vacant stores. There are many reasons why shopping areas are bare. Some businesses are handed down to younger generations and just aren’t interested in the business while others may have gone through bankruptcy. Both cases leave a hole in the shopping area when new businesses don’t move in. Knowing these reasons can help you understand the history so that history won’t repeat itself but at your cost.
- Even though your store may have a large population surrounding it, many will still drive a distance to get what they need. Having businesses surrounding yours incentivizes customers to visit and when there are gaps from store to store, it becomes less appealing.
- Social problems and stigmas of certain neighborhoods are real hurdles for customers interested in visiting your store.
- For areas going through gentrification, be aware of your price points and product. Understand the income level of the surrounding community as this will have an impact on store traffic and support.
- Shopping locations with easy access from a roadway and sufficient parking are a plus. Sometimes, parking is not ideal when your business is located right on a street so plan accordingly.
- A clear and inviting window display helps customers determine whether to enter your store or not. Visibility is key, especially as some storefronts have lost windows over the years from being converted into non-retail spaces.
When deciding on the best place for your store, keep in mind that both the shopping area and your business needs to grow and adapt. If you built a house without a blueprint, it wouldn’t go very far and would eventually collapse. An effective business plan and planning of where to put your business can help you in the long run while being successful today. Use these guardrails to build the dream house* you’ve always wanted.