You’ve done your market research and are ready to choose a location for your new business. Should you locate next to Wal-Mart, a grocery store, or in a strip mall on the other side of town? Find out how to scout and research potential storefronts for your business.
This week our discussion on starting a brick and mortar business continues. We’ve already talked about creating a Startup Plan to manage the process and conducting market research to gauge the viability of your idea.
This week we discuss how to find the best location for your business. This isn’t a difficult process, but will require some homework on your part. You can use a commercial realtor to help you scout for locations, but the real research you must do yourself.
When I was scouting locations for my brick and mortar store I took the time to drive around town to familiarize myself with every foot of vacant retail space available.
I spent a lot of time sitting in parking lots. You can learn a lot just watching cars go by at different times of the day. For example a location may be great in the morning, but lousy in the afternoon. Or maybe the parking lot is full at lunch, but empty the rest of the day.
You should also consider which side of the road works best for you. For example a drive thru coffee shop has a much better chance of success if it’s located on the side of the road with the morning rush hour traffic, while a takeout joint has a better chance of success if it’s located on the side of the road with the going home traffic.
Here’s how I found the best location for my store in my hometown of Madison, Alabama. The city of Madison is sandwiched between Highway 72 on the north and Madison Boulevard on the south. Both stretches of road contain fast food restaurants, strip shopping centers, and lots of vacant retail space.
I was opening a specialty retail store, so foot and automobile traffic would be essential to success. On the Madison Boulevard side of town the predominant strip was a Wal-Mart center, but I knew that locating near a Wal-Mart was no guarantee of success. To the contrary, Wal-Mart is notorious for killing smaller neighbors, so to survive in a Wal-Mart strip you have to be a niche business in a market that Wal-Mart doesn’t already own. My products were firearms and self defense items, which research told me that Wal-Mart was phasing out at most stores, so locating next to Wal-Mart could be a good move.
However, there was a lot of empty space in the Wal-Mart center, which told me that either those retailers tried to, but ultimately failed to compete with Wal-Mart on its own turf or there wasn’t enough traffic for them to survive.
I spent some time in the Wal-Mart parking lot at different times of the day and found that – in my humble opinion – there was barely enough business to keep the Wal-Mart open, much less smaller retailers.
The problem is that the south side of Madison is not a high growth residential area, which is needed to sustain a rural retail location. Madison Boulevard is busy during the lunch hour thanks to nearby industries, but because there is a major interstate running parallel Madison Boulevard is not heavily trafficked at other times of the day, hence the abundance of vacant retail space and my decision to look at the north side of town.
Highway 72 bounds the north side of Madison and is heavily trafficked most of the day because it connects the city of Huntsville to the east and Athens to the west.
The north side of Madison also boasts a number of affluent residential developments. Most of the residents living in those neighborhoods drive daily along Highway 72 to and from work, making it one of the most heavily trafficked highways in North Alabama – at least that’s the way it appears when you’re stuck in traffic there.
There was vacant space on the north side of the highway in a Publix Shopping Center and two other strips anchored by smaller grocery stores. The Publix Center appealed to me because it was also home to a Books-A-Million, a Staples, an ice cream shop, several restaurants, and a number of other niche stores, guaranteeing traffic throughout the day.
Across from the Publix Center were a number of vacant buildings that would have worked well except for the fact that they had small parking lots and no opportunity for foot traffic.
After doing my requisite site research it didn’t take long for me to realize that even though the space in the Publix Center was smaller, yet more expensive than all other space along the way, it attracted more organic traffic than the other locations. I knew the amount of traffic my store would get from patrons going to other stores in the strip would be well worth the extra cost.
That logic proved true. I expect there are very few gun shops in retail strip malls, but the location has proven to be a winner for us. We have men coming in while their wives are grocery shopping at Publix and couples coming in after they dine at the restaurants in the strip. We even have women stopping in after getting their nails done. Go figure.
Now that you know how I chose the location for my store, next week we’ll talk more about the other things you should consider before choosing a location for yours.
