“Location, location, location” – have you heard that one before? If I had a nickel…oh yah if I had a penny…., I’d be a rich man. Is it true? It can be; but start-up businesses should not get all wrapped up into thinking that location is the “be all and end all’.
It is important; and if you could find a small space on Rodeo Drive in which to set up a little business and pay only $2,000 per month then it is definitely true; but that is unlikely to occur.
Most of us have a preference – uptown versus downtown or in a major mall – nevertheless, it is sometimes hard to find exactly what you are looking for at the price you had in mind. And it is the price thing that ultimately comes into play when searching out a location.
If you have completed a financial forecast you will have an excellent idea what price you can afford to pay in rent.
- And keep this in mind – You don’t find a concept for a space; you find a space for a concept.
Remember when looking for a location, you are the customer. Nothing happens until you agree to sign a lease. Until that moment, you are in control; and enjoy that power. Exercise that power in negotiations.
If you are good at what you do (and are not thinking of opening your business next to the sewage treatment plant), your customers will find you. Parking and curb appeal are also important, as is ready access for deliveries and pick-ups. If you have thought your concept through in detail, you will already have a good idea about the size and layout of your space. When you see it, you’ll know. Sometimes a smaller place is better because it needs fewer customers to make it look busy.
Do not panic. Sure it would be great to make July 1st or December 1st; however, you are in it for the long haul and there are always more summers and more Christmases.
- If you make a hurried decision and potentially a rash one, you could be stuck for five years in a lease that you don’t like and cannot really afford.
Take your time. Make sure that you end up with the right deal not just the right place. Seasonally affected revenues can be dramatic; nevertheless, you should be able to make money in every month not just the big months. That is important because it is easier to lose money than make money in business.
Now, if you have the opportunity to secure, what you think is an ideal location, and it is not within your budget then re-work your numbers. Ask yourself this question. “Will the location increase our traffic and ultimately our sales and will those sales be able to cover the additional rent?” Take your time and squeeze your numbers.
There are numerous other factors that come into play when selecting a location and they include whether the city is planning to rip up the street for the next two years, and whether your business neighbor appeals to a less than favorable clientele. You have to do your research.