by WES MORGAN
Most discussions about selecting a site for a small business center on the adage, “location, location, location.” No matter how many times one repeats “location,” however, the choice is only as good as the amount of research invested. For example, a particular address may have a high degree of positive recognition in your community, while the cost per square foot in an apparently bustling shopping area may be perfect for a startup’s budget. But other factors may make them anything but desirable for your business.
Here are some attributes to consider as you evaluate potential places to literally set up shop:
Where are your customers? As part of the research for your business plan, you should have a good idea of your target market’s demographics and buying habits. Businesses that rely on walk-in traffic (e.g., food, convenience items) or specific business hours will obviously focus on convenience, and a specialty goods retailer may not need a Main Street location, as customers will be coming to you.
What’s around you? Are you in a retail- oriented area where people shop on a daily basis, or a block or two away? Are there offices and restaurants with steady daily traffic, or hotels and churches where activity varies? Again, the degree to which you rely on walk-in traffic dictates how close you want and need to be to those coveted customers. Also look at the proximity of competitors — you don’t want to be too close to them if they have a prime location and you don’t.
Can you be found? Visibility and access are essential to helping customers find you. A popular shopping mall may sound ideal — unless you’re offered space in a dead-end corner or amid empty storefronts. Also consider accessibility from area streets and transit systems, availability of parking (dedicated to your business vs. shared) and signage options and limitations.
How much does it cost? This will depend on the aforementioned attributes, and the amount of space you need. Precision is critical. Overestimate, and you’re paying for space you don’t need; underestimate, and your cramped quarters may limit growth, especially if you are in a long-term lease.
What’s the lease like? Rates vary depending on the size of the space, lease length (month-to-month vs. multi-year), utilities (included in rent or separate), maintenance responsibilities, space fit-up and capital improvements, termination notification and penalties — and many other factors.
Demand for space may vary depending on market conditions, but most landlords are usually willing to negotiate lease terms. You should consider two or three locations when you start negotiating terms of your lease, in order to have points of comparison and leverage to say that someone else is offering you a better deal. Also, you should always have a lawyer review the lease before you sign it or any related documents
Wes Morgan is a SCORE volunteer mentor and a NAI Beverly-Hanks Commercial Broker. To learn more, contact asheville.score.org. SCORE — which originally stood for Service Corps of Retired Executives — is a nonprofit organization whose volunteers provide free, confidential business mentoring and training workshops to small business owners.