Before picking your new retail store location, retail shop owners who have come before you suggest that you take the time to consider and analyze multiple factors before locking in that next location. Below we’ve identified 16 of the most important factors for you to consider and review before making a final decision.
You should note that we’re going to assume you’ve mastered your other locations already. Otherwise, why would you dream about opening up a new retail location until the first location has been perfected.
As an added bonus we’re also sharing our research in the form of a downloadable checklist that you can share with your team, and for you to keep and use for all your future retail shop locations.
Here’s all the information in the form of a downloadable checklist.
1. Pedestrian traffic counts
Foot traffic can make or break the success of your new retail location. If you can’t find recent data, stand outside of the location and physically count the people who walk fast. Yes, retail shop owners actually do this!
2. Vehicle traffic counts
Vehicular traffic also plays an important role. Ideally, your new store should be visible to drivers while commuting. If traffic data isn’t readily available for your area, you can have a good idea by counting the number of vehicles that pass by at peak hours.
3. Parking and accessibility
Convenience is key here. If your new location doesn’t have sufficient parking or isn’t easily accessible to persons with disabilities. It can deter potential customers from visiting your location.
4. Building’s history reviewed
Before moving into your new location, it is important to know the property’s history. The history would give you a good sense of what you can expect in the future. Ensure that the building has the ability to support your needs such as electrical, air conditioning, and telecommunications service.
5. Sign rules and restrictions
Without a doubt, signs are critical to any new location. It captures the attention of potential customers and draws in new business. It is important to know what you can and cannot do. Plus, you want to ensure that you comply with the rules and regulations so you don’t get fined.
6. Building’s zoning and ordinances reviewed
Find out if there are any ordinances or zoning restrictions for your area. Certain businesses may be prohibited in certain locations. For example, in many states, liquor stores and other similar businesses are not allowed to do business in a school zone. Be sure to find out what restrictions apply for your business
7. Review previous tenant history
One important tip which is sometimes overlooked is getting to know the history of your location. Who was the previous tenant? What reputation did their business had with the community? Was the business successful? If you are starting out in a location where other businesses have tried and failed then the public perception would be that your business probably would last either and that could work against you.
8. Structure and layout approved by architect
The layout of your store should be one that allows customers and staff to move freely, without unnecessary obstructions. Even more importantly, the structural integrity of your store should be uncompromised for the health and safety of everyone under your roof. Be sure to get the approval of a professional.
9. Researched future developments in the area
Imagine this scenario. You have successfully opened your new location and it has gained traction in the community. You have acquired quite a few loyal customers only to find out that you need to relocate in a few months due to upcoming construction. It is a good idea to exercise due diligence and do the necessary research on future developments before committing to a location.
10. Competitor stores scouted
Opening up a location in a sizable market with little to no competition would be ideal. However, if you do find a location where there is no competition, exercise due diligence. This could be a result of barriers to entry, lack of market demand or previous failed attempts. It is important to carry out research before setting up shop.
11. Demographics of local people
It is critical for any business to know their target demographic. For many businesses such as retail, it is important to be within close proximity to your demographic. Information from a recent census can help you determine what percentage of the local population matches your target demographic.
12. Proximity to other businesses
Convenience is key. Being in close proximity to other businesses allows your customers and staff to use the services of other nearby businesses, making it convenient for them. You can also benefit from foot traffic from the other businesses as well.
13. Additional, non-rent costs identified
While rent is a substantial portion of your outgoing recurring cost, you need to consider other recurring costs as well such as utility costs and local chamber costs. To get an idea of how much it would be, ask your utility company for the previous year’s usage.
14. Crime and safety report completed
There are a ton of websites where you find out about local crime and safety concerns in the area. In fact, you can subscribe to local Facebook groups and neighborhood watch apps. For example like Ring.com provides to stay on top of crime and safety.
15. Local small business groups identified
Check to see what local small business support organizations are available in your new area. Organizations like your local chamber of commerce, local Facebook groups, and blogs can be critical to the success of your new store location.
16. Required permit research completed
Do your homework on what permits will be needed for construction and operations. Better yet, have someone do it for you. There are permit assistance companies who will not only do the research but will also wait in line to get the permit for you as well.
To wrap up…
In conclusion, I’d like to end with one more thought. Don’t break the cardinal rule of retail location selection by sacrificing pedestrian traffic for lower rent. Spend the extra money and you will make more money. Sacrificing your location to save money is the kiss of death in the retail industry.
if you can’t afford the location your businesses needs to be then just slow down and wait until you can.