A move to a new neighborhood nearly pushed Matt McCormick's smartphone repair business off the map.
McCormick had spent a year in a shared office near downtown Chicago, where he replaced cracked iPhone and iPad screens. But his business, JCD Repair, was getting too big for the space.
He decided to move to a storefront in Chicago's Jefferson Park neighborhood in 2010 that offered a one year lease. He thought his customers would follow him to the store since it was just a 25-minute train ride from the city's downtown area.
He was wrong.
JCD Repair's sales fell about 50 percent in the first month. The new neighborhood was mostly made up of blue-collar workers who didn't own iPhones, McCormick says.
"We struggled to get people in the door," says McCormick.
Opening a store in the wrong neighborhood can be a costly mistake for a small business. Researching demographics and nearby competitors is vital. Pick a storefront that's too far from target customers, and sales can slide.
McCormick and his business partner had to stop taking a salary for nearly four months in order to keep JCD Repair alive. "We lived off of our savings," he says.
He tried to make the location work. He beefed up the company's website, www.JCDRepair.com, to rank better on search engines. He bought advertisements on Google. More Chicagoans began making the train commute, and sales rose, but they were still down from its days in a shared office. McCormick knew he needed to move.
With the one year lease at the Jefferson Park location coming to an end, he began biking around Chicago's more affluent neighborhoods, looking for vacant space.
He found one in the Lincoln Park neighborhood, about a mile from an Apple Inc. store. In the month after moving into the new location, sales jumped about 70 percent from the first store. "We didn't do anything special. It was just the location," McCormick says.
The company has since opened three more stores in Seattle, Bellevue, Wash. and Madison, Wis. McCormick carefully picked more affluent neighborhoods, first opening shared office spaces and building a reputation with customers, and then moving into the retail stores. The company made over $1 million in sales last year.
He says he may not have made that first move into Jefferson Park store if he had done one thing while he was in the shared office space.
"We should have asked customers if they would go there."
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