Although my small business is not a retailer, I was a financial analyst following retail companies for nearly 15 years. One of the things that I learned from this experience is the importance of location to retail store success.
While a large retailer with dozens or even hundreds of stores can afford to have a few without strong locations, a small business with only one or two stores doesn't have this luxury. Therefore, I believe that finding the perfect retail location is critical. Here are eight tips for choosing a retail store location.
I know from experience that when you are starting a small business (or adding a new location), opening day can't come soon enough, but don't let your impatience cause you to settle for a less-than-ideal location.
Choose a location that suits your business
If yours is a destination retailer that customers are likely to find even if it is off the beaten track, having a top-of-the-line location may not be essential. On the other hand, if you expect walk-ins to be a large part of your business, search for a location with high visibility, great signage, and plenty of foot traffic.
Research consumer traffic
Before selecting a retail store location, take the time to evaluate consumer traffic. How many people walk by the location each day and at what time of day? How much traffic passes by? Is the location easily accessible by car? Is the area served by public transportation?
Check out the neighbors
When I followed retailers, I found that some small retailers, rather than fearing competition from a big-box, chain-store competitor, sought out locations near these behemoths. Their logic was that the thousands of customers coming to shop the big box would result in valuable "overflow" customers to their stores. While you don't need to seek a location near a national chain, do look for one near other shops and businesses that will attract customers for your business as well.
Learn about the neighborhood
Get to know the area where you are considering opening a retail store. Be sure that it is up-and-coming or stable and established not on its way down as a shopping area. Also, research the demographics of the local population to be sure that they match your target market.
Another lesson I learned as a retail analyst is that the difference in price between the best and the second best locations sometimes is greater than the difference in customer traffic. In other words, based on cost benefit analysis, a good but not great location may actually be the better choice.
Don't overlook the importance of convenient parking
Don't let too little or non-existent parking keep customers from shopping in your store as often as they would like.
Be sure the space is suitable for your business
There is no point in taking a too-large location and paying for space you won't use or, alternatively, selecting one that is too small to properly display your wares. Likewise, if you want to tempt window shoppers into your store, a large picture window with spacious display space may be a must-have feature. In other words, take into account your store's special needs as you evaluate space so that you find the best possible fit.
- YEC Member Spotlight: Steph Beer, Chief Communications Officer, nsight2day Young Entrepreneur Council