Location, Location, Location
Every real estate expert you talk to will confirm that location is critical to market value of a property. Location is the sum of many variables, including “prestige”, convenience, aesthetics, visibility, and a multitude of tangible and intangible factors. When a business selects a location, it is important that the benefits of the location outweigh the cost of the location.
When selecting a location for your business, take time to examine the expectations and the realities of the location – as it is. Examine everything carefully: the overall size of the location, to how much of the location you will occupy, allocated and authorized signage, parking, and ease of entry and exit into the location.
When selecting a location, list all the things you would like to have and those you expect the location to “drive”. Include in your list things such as the following:
- “Walk-in” customer traffic
- “Drive-by” marketing
- Advertising (through building signs and listings on any directories, etc.)
- Ease of access
- Cost per square foot
- Cross-marketing – shared customer-base demographics of other businesses
If you are leasing or renting in a new building, whether under construction or not yet begun, be sure that you are careful to get all details spelled out clearly and completely in your written agreement. Also, make sure that you take into consideration the impact of “neighbors” on your operations. Will your lease protect you from business in direct competition with yours?
In many situations the total signage on a building, parking allocations, and other factors are influenced or decided by the ability of the other businesses to negotiate. For instance, national chains and franchises have greater experience and leverage in negotiating favorable terms for leases. These terms often result in a trade-off between occupants – there are generally limitations on parking, signage, and other physical elements. If one business gets a larger share, it has to come from somewhere.
Evaluate your location decision based on is the variables: regulations on signage, layout of parking lots, number of entrances, and so on. Also, check your assumptions against facts. Many people make the mistake of equating the number of cars driving by or through a particular intersection with “prospects”. Not every vehicle driving by will turn in and become a prospect. Not everyone who meets demographic requirements walks in the door.
Copyright ©2006 FOCUS Resource, Inc.