When future business owners come by they have questions and ideas about every aspect of their business. You would think that the location is a key factor for many prospective business owners to think about. Unfortunately this is not the case. "I'll just go rent a building" is just as stupid as saying "I'll just sell my product". The location of your business will have more impact than the logo, the name and sometimes even more than the product. We will focus here on a physical building, for a general SME business. For more specific guidance, contact our team.
Unfortunately there is no such thing as a universal step-by-step plan to guarantee success when selecting your location. But when you take the next few things into account you will get pretty close. Always use common sense to apply these techniques on your business. A car dealership will have different needs than a flower shop.
Commercial real estate is categorised in 3 categories: A-, B-, and C-locations.
Actually that was a lie, as the first categorie is split up in two sub-categories. A-locations are the store- or office buildings in super top spots and high end streets. A-locations can be split up in two sub-categories. A1-locations are properties in a city center. For a store a A1-location would be Regent street in London, 5th Avenue in New York, Champs-Élysées in Paris, George Street in Sydney. Streets with high foot traffic, and come with a very high price tag. These locations are unfortunately not accessible to small businesses. Not every business would thrive in such a location. i.e. a car dealership, imagine doing a test-drive in rush hour traffic. A2-locations are locations outside the city center which are easily accessible by car for stores or public transport for offices. These are most interesting for furniture stores, white goods stores, supermarkets, etc.
B-locations are properties with relative interesting locations. Major access roads to the city center. In those locations you will find a wide variety of stores. The fit for these locations really depend on additional factors like parking and proximity of competitors.
As last we have C-locations. Those are far away from city centers or access roads. Potential customers do not pass by, but have to come to your store because they want to. These locations are relatively cheap, with opportunities for parking and beautiful landscaping opportunities. C-locations are not top properties, so you will need top marketing to attract your customers.
Think about what elements are crucial for your business to work. Are you a lunch bar but there are no large offices nearby? Do you sell fridges and freezers but you don't have parking? You sell pulled pork burgers in a muslim dominated neighbourhood? One factor missing can break your business. So double check if everything is present. A previously successful tenant in the property is not enough.
Some examples of contradicting features:
First you have to think if it is worth renting out a location year round. Are you selling Christmas decorations? Maybe you can alternate in the location with a company that sells swimming pools? Councils and local governments very often have programs to limit the amount of empty commercial properties in their cities. These locations can be rented for a short time and are usually in an A-location for a C-location price.
When you decide to settle somewhere permanent, the next choice is buy or rent. Not everyone should buy a location, but not every business can rent. As this is a choice with too many variabels, schedule a meeting with our team to get more info on the pro's and con's of both renting and buying commercial real estate.
Do you require some more guidance in all of this? Feel free to schedule a meeting with our team, and we will be happy to help.