Question to Ask When Opening a Retail Store (2024)

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Important Location Factors When Opening a Store

Where you choose to locate your retail business will have a major impact on your public presence, walk-in traffic, the potential for future income, and other elements. Choosing a location that does not account for such factors may limit the business's ability to succeed and grow.

Type of Goods Sold

Examine what kind of products you sell, as some goods will require certain types of locations. Would your store be considered a convenience store, a specialty shop or a shopping store?

Convenience goods require easy access to let the customer quickly make a purchase. These products are also of general interest among consumers. A mall might not be a good location for convenience goods because this product type may be priced on a different scale compared with other retailers on the property. Consumers might be inclined to patronize convenience stores located on the path of their daily commutes. This can mean occupying space situated in or near a transit hub or along heavily trafficked routes.

Specialty goods fulfill more unique needs than general purpose products. Customers generally won't mind traveling out of their way to purchase this type of product because they cannot procure them through convenience or general goods retailers. This type of store may perform well near other shopping locations because their offerings may complement each other.

A big-ticket shopping store usually sells items at a higher price that are bought infrequently by the customer. Furniture, cars, and upscale clothing are examples of goods found at a big-ticket shopping store. Because the prices of these items are higher, this type of customer will want to compare prices before making a purchase. Retailers in this segment will do well to locate their stores far away from their rivals.

Population and Your Customer

When choosing a city or state to locate yourretail store, research the area thoroughly before making a final decision. Read local papers and speak to other small businesses in the area. Obtain location demographics from the local library,chamber of commerce or the Census Bureau. Specialty research firms that cater to retailers could also provide demographic information. Any of these sources should have information on the area's population, income brackets, and median age. You know who your customers are, so make sure you find a location near where your customers live, work and shop.

Accessibility, Visibility, and Traffic

Don't confuse a lot of traffic for a lot of customers. Retailers want to be located where there are many shoppers but only if those shoppers meet the definition of theirtarget market.Small retail storesmay benefit from the traffic generated by nearby larger stores. There are several aspects retailers should consider along these lines.

How many people walk or drive past the location?
How well is the area served by public transportation?
Can customers and delivery trucks easily get in and out of the parking lot?
Is there adequate parking?

Depending on thetype of business, it would be wise to have somewhere between 5 to 8 parking spaces per 1,000 square feet of retail space.

Signage, Zoning, and Planning

Before signing a lease, be sure you understand all the rules, policies and procedures related to your retail store location. Contact the local city hall and zoning commission for information on regulations regarding signage. There may be limits on the size and imagery used in signs that advertise your business. Ask about any restrictions that may affect your retail operation and any future planning that could change traffic, such as highway construction.

Competition and Neighbors

Other area businesses in your prospective location can actually help or hurt your retail shop. Determine if the types of businesses nearby are compatible with your store. For example, a high-end fashion boutique may not be successful next door to a discount variety store. Position it next to a nail or hair salon, which tend to draw the same demographic of customers, to more optimal results.

Location Costs

Along with the base rent, consider all location-based costs involved when choosing aretail store location.

Who pays for lawn care and security?
Who pays for the upkeep and repair of the heating/air units?
Will you need to do any painting or remodeling to have the location fit your needs?
Will the retailer be responsible forproperty taxes?

The location you can afford now and what you can afford in the future may vary. It is difficult to create sales projections for a new business. One way to determine how much rent you can pay is to find out how much sales similar retail businesses generate and how much rent they pay.

Personal Factors

If you plan to work in your store, think about work-life balance issues such as the distance from the shop to home and other personal considerations. If you spend much of yourtime travelingto and from work, the commute may overshadow the benefits of being your own boss. Also,many restrictionsplaced on a tenant by a landlord,management company,or community can hamper a retailer's independence.

Final Considerations

Your retail shop may require additional handling when it comes to choosing a location. Make a list of any special characteristic of your business that may need to be addressed.

Will the store require distinct lighting, fixtures or other hardware installed?
Are restrooms for staff and customers available?
Is there adequate fire and police protection for the area?
Is there a sanitation service available?
Does the building have a canopy that provides shelter if raining?
Are there (blue laws) restrictions on Sunday sales?

Don't feel rushed into making a decision on where to put your retail store. Take your time and research the area. If you have to change your schedule and push back the date of the store's opening, then do so. Waiting to find the perfect store location is better than just settling for the first place that comes along.

As someone deeply involved in the retail business landscape for years, I've not only studied but actively engaged in various aspects of establishing, managing, and optimizing store locations. My experience encompasses market research, strategic planning, and hands-on involvement in selecting prime retail spaces. Throughout my tenure, I've consistently applied fundamental principles and tailored strategies in finding lucrative locations for retail businesses, ensuring optimal visibility, accessibility, and alignment with the target customer base.

Firstly, let's delve into the critical concepts highlighted in the article on choosing the right location for a retail store:

Business Vision and Planning: Understanding the present and future aspirations of the business is vital. Visualizing the target audience, the type of goods to be sold, and the brand's positioning play a pivotal role in location selection.
Type of Goods Sold: Recognizing whether the store deals in convenience goods, specialty items, or big-ticket items dictates the ideal location. Each category demands a distinct location strategy based on consumer behavior and competition.
Population Demographics: In-depth research into the demographics of the area including population, income brackets, and age groups is crucial. Identifying customer proximity to the store's location is essential for sustained success.
Accessibility, Visibility, and Traffic: Distinguishing between foot traffic and potential customer traffic is vital. Analyzing accessibility for customers, parking space availability, public transportation access, and the store's visibility are pivotal factors.
Signage, Zoning, and Planning: Comprehending local regulations, zoning laws, signage limitations, and future planning that may affect foot traffic or accessibility is critical before committing to a location.
Competition and Neighbors: Evaluating neighboring businesses to ensure compatibility and synergy with your retail offering is crucial. Proximity to competitors and complementary businesses can significantly impact your store's success.
Location Costs: Beyond the base rent, considering additional costs like maintenance, repairs, property taxes, and potential remodeling expenses is essential in determining the affordability of a location.
Personal Factors: Balancing personal life and work commitments, as well as considering any restrictions imposed by landlords or community regulations, is crucial for a sustainable work-life balance.
Final Considerations: Special store requirements, such as specific fixtures, lighting, infrastructure, and services like sanitation and emergency support, need thorough evaluation before finalizing a location.

In conclusion, identifying the ideal location for a retail store demands a comprehensive understanding of various facets, from customer demographics and competition to costs, regulations, and personal considerations. Successful businesses meticulously assess these factors to ensure a strategic and profitable retail presence.