Choose your store location wisely as it can have an effect on your store's profitability. Consider these five factors when choosing a location:
- Zoning: Ensure the area is zoned for retail businesses.
- Demographics: Determine if the demographics of the local population are a good fit with your business (age of the population, income, family size, and so on).
- Traffic analysis: Ensure that you are in a high traffic area and that the store is easily accessible (public transit, parking, and so forth).
- Competition: Make sure that nearby stores are complementary and not in direct competition with your business.
- Future development: Find out if zoning or road changes are expected in the near future or if new development is planned. Such activities could help or harm your operation.
Consider the best scenario for your type of store:
- Convenience stores (supermarkets, hardware, bakeries, drug stores, and so on): Your business may benefit from being in a busy mall or other high traffic area that offers easy access for quick purchases. Since many people enjoy one-stop shopping, you can attract customers from co-located complementary stores.
- Specialty stores (selling unique, hard-to-find products): If you have a specialty store, your products are more unique and often customers do not mind travelling out of the way to purchase your specific products. You could take advantage of lower rent, free parking, and larger warehouse and display space.
- Shoppers' stores (clothing, major appliances, and so on): With a shoppers-type store, you may actually benefit from being near your own competition. You could sell your goods in a shopping centre or mall where consumers can easily compare quality, price, and service offered by a few competing stores.
Consider these issues before signing a long-term lease:
- Do you plan to operate your business indefinitely or for a set number of years?
- Will you be able to expand your business at this location?
- Is the lease flexible? Can you opt to renew or seek another location if need be?
- Is the rent fixed or is it pegged to sales volume?
- Make sure any promises the property owner has made to you are in writing (repairs, construction, alterations and maintenance).
Help in choosing a location
You may wish to hire a consultant to analyze two or three tentative locations. Considering the importance of a store's location, it pays to invest in the best spot. If you haven't found a suitable location, don't open your store until you are sure you have what you want.
Get data that sheds light on population characteristics such as location, age, income, education level, and more.
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