Most people would agree that a good retail location is essential to company success, although the best advice for choosing this all-important business locale isn’t as universally known. In fact, you may be surprised at what works best. Hint: There’s more to it than the old adage “location, location, location” might suggest.
Keep the following tips in mind when you are scouting locations for your business.
Start with ideal customers, not ideal neighborhoods
Many business owners begin a real estate search by looking in the most desirable neighborhoods. This seems logical on the face of it, but this approach overlooks one of the most important selection criteria: where your customers are. A better idea is to focus on where your highest concentration of potential customers is likely to be.
Start broadly by noting city demographic trends reported by the U.S. Census Bureau’s American FactFinder. For neighborhood-specific information, use City-Data.com or real estate search engines such as Zillow or Redfin. Neighborhoods change quickly, so tap into local real estate brokers for up-to-the minute advice and information about neighborhood trends.
Be near your competitors
Contrary to popular belief, it’s often a benefit to be near your competition. When you open your coffeehouse near an established neighborhood café, for example, you are likely to catch an overflow of patrons who can’t find a table at the local fixture. The two businesses may also create a kind of mini-hub for coffee that will draw even more coffee lovers to the area. Even if your competition is a large chain, proximity may be particularly helpful. As the Journal of Marketing Research discovered in a 2014 study, small businesses that drew attention to their larger competition and proudly noted their independent status tended to draw more customers and see higher sales.
Rethink your assumptions about traffic
A location on a well-traveled road or in a busy city center can be an advantage, but remember that the only traffic that matters is comprised of customers who will buy from you. If the traffic near your location does not include your target customer, traffic may only prove to be an impediment to customers who want to get there. In some cases the best location for you may be a more out-of-the-way spot that is easily accessible and includes parking. When you are considering traffic, also think about how easily employees and suppliers will be able to reach you.
When you are investigating traffic to a location, consider when your prospects will be there. Plenty of families may want to visit a location you are considering for your toy shop, but they may only come by when you plan to be closed. Likewise, young professionals who are ideal for your coffee shop may live in a neighborhood but buy their coffee closer to work. When you have a neighborhood in mind, visit at different times and dates to observe the kind of traffic each area receives. Aim for places that hit peak activity when you’re planning to be open for business.
Spend time in the neighborhood
When you have narrowed your search and are considering a spot, do some on-the-ground research. Consider talking to other business owners in an area by simply introducing yourself and asking them to tell you briefly what they like and don’t like about the neighborhood. You should also spend time just watching who comes and goes. Local discussion boards may also be helpful in providing insight into neighborhood issues.
Where you decide to set up shop can make or break your company, so choose carefully and stay focused on what matters most to your business. A good location decision can pay off for years to come.Print this article