Have a good plan for your business – Part 3 (if you missed Part 3, CLICK HERE)

Have a good plan for your business -Part 4

Planning for a good business location

Avoid the fatal mistake of a bad location

Some years back, when I was opening my first business, I made the near lethal error of leasing a business location without a plan. All I planed for was how much I felt I wanted to pay in rent and who would be my realtor.

Once I got in the location I had to do three times the amount of marketing necessary just to contend with the competition. I spent more on marketing than I would have spent on the extra rent of a better spot on the street I was on.

But you live and you learn so here are some things I learned that I hope you can make use of.

Understanding and matching your needs with a business location.

When planning for a new location keep in mind your business specifications.
• Will you need a warehouse, store front, office…?
• Do the clients come to your location?
• Are your clients upscale or bargain bin (rich or poor)?
• How much space will you need?
• Based on projections, how much income do you expect this location to make?
• Will you need to renovate?
• How much are you prepared to spend for renovation?

Targeting cities for your business

If the clients never come in to see your location, I think it’s ok to get a location that’s as inexpensive as possible. Cut out all extravagant expenditures to save on overhead and start up/renovation costs.

Just don’t skimp on safety, or peace of mind. Make sure you and your staff can be comfortable working there.

If you are a store front selling to the local market, the locals must make the type of income necessary to purchase your products. You’ll sell more authentic Luis Vuitton items in Beverly Hills than you might in Compton.

Some cities have areas specifically for certain types of businesses which can help cut at very least marketing costs.

Take for instance a city with a farmers market or two. A produce company will get exposure to hundreds, if not thousands, of people and for much less in rent than opening a small market near a residential area.

However you should always keep your business mission in mind. In the example of the produce company imagine they want to sell upscale food without the haggling customers associated with farmers markets. Well they’d have to get their own store, in a very specific city or part of town, to target a particular market and income level.

Note that it is always a good idea to visit any prospective locations and spend some time there. Find out if the businesses nearby are beneficial to your company. It’s also a good idea to talk to the neighbors and see what they are like. What they have to say about their experience in the area can save you time on research.

If you want to be even more sure the location gets the type of traffic you’re looking for go there at different times of the day for one week and count traffic.

Once you have decided on the area, size, and amenities of a location find out the going lease rates or property values (and interest rates) if you plan to purchase.

Try and understand what will be included or excluded in your lease agreement. Will the lease include triple net payments? If not what services (like trash or maintenance) will be covered by the Landlord and what is the tenant expected to cover.

Once you get the numbers mapped out, make your cost projections. Include projected utility and finance costs along with regular expected maintenance costs.

Now you’re ready to write out a strong plan that will land you the location your business needs. You now know the “who, what and how much” of the location. The next step is to call a good realtor or agent.

If you need help finding a good business real estate agent don’t hesitate to email us for guidance. We have some excellent resources that may help you get your dream location.

As for the rest of my lovely readers out there in blog-land, we’d love to hear from you! Contact us with any questions or concerns regarding today’s topic.

Best of luck on your business endeavors.