A great location can be the cornerstone to your business, but do you know why it is so great? There is a lot of criteria that goes into what constitutes great space and every business will think about it differently. As things have changed quite drastically in recent months, its possible things have changed for your business as well and you are starting to think about how you might embrace it.
Moving or expanding to another location is not something you do on a whim and there can be many reasons as to why you might be considering it. If your business is not doing well and you are outgrowing your current space, you may want to move to another location that will better support your business model and budget. You may need to move if your customers have moved to make it convenient for them to have access to your services or product as demographics do change periodically. A few good examples of why demographics change could be that your area is being rezoned,gentrified, has increased density, fluctuating cost structures, and competition.
If your business is doing very well, you might want to move to a bigger location, a more high-profile area, or maybe even consider expanding with a secondary location outside of your current trade area. You will want to take advantage of your expanding customer base by making it more convenient for them to consume your product or service with a new location closer to them. The options are endless depending or your situation as no two are alike. Your business and how you choose to run it is unique and your approach to site selection should be too.
Below are some of the criteria that is considered in site selection. They are not placed in order as each business may approach them differently. They are not meant to exhaustive, but it is to illustrate how seriously you should consider choosing where you will be conducting your business. The formula needs to be right in order to maximize your competitive advantage and profitability while considering your own personal needs as well as your staffs, customers and competition.
- Median age, age by percentage, total population?
- Medium income, disposable income for your service category?
- Total number of people, dwellings, daytime vs nighttime?
- Family make up, total children?
- Ethnic or cultural make up, languages spoken?
- Growth potential in all categories?
- Traffic, pedestrian counts?
Area and Building:
- Where do you live? How far do you want to live from work?
- What type of building? Multi-Unit, Condo, special purpose building, tower, custom design?
- Where in the building? Does visibility matter? Windows?
- What type of Landlord? REITS? Small business? Medical?
- Type of neighborhood? City, country, industrial, special districts, high density, low density?
- Close to gym, food, lifestyle district?- Lobby and Security?
- Ample Parking?- Public Transit, bike racks, walking paths?
- Storage, lockers, cafeteria, elevator, signage?
- Design of building, neighborhood, aesthetics?
- How many others? Who are they?
- Do you need to be near competition, or far away?
- What is the saturation point?
- Is there a lack of your service/product in the area?
- Is there demand for your service in the area?
- Barriers to entry?
- What is your budget?
- Are you financeable?
- Can you afford it, does it fit your business model metrics?
What about your Lease?
- Is it a gross lease, Net lease, Net Net, Triple Net?
- How many years?
- Special clauses, use?
- Exclusivity, longevity, cost, construction, demolition?
It can be difficult to know every detail of choosing the right place to put your business. There is software to help with gathering information but qualifying it can be tough. It could take multiple locations and demographic studies thereof before you even know how much investment and financing you will need to open properly in your chosen trade area and location. Information is relative and you need to compare different data sets to be sure you are making the right choice.You also must be prepared to make concessions within your own criteria.
One thing will lead into the next and changes might just happen organically in your business for better or for worse. If you want to reproduce that success you are having, or change your business to make it better, you need as much information as possible to make the correct choice about whether to move or expand. It is a decision you cannot take lightly as you might be there for a while, so you must get it right.
In times like we are experiencing; you may get a chance to rethink your location and position in the marketplace. I think there might be some (maybe a lot) of vacant space hitting the market soon. Maybe it was a location you always drove by,or one you could never lease because it was always to full or out of budget. When you change your business model in reacting to the changes in demographics, trade areas, products and the way your customers consume, your location might have to change with it. It might be your chance to rethink everything