Good morning and happy Wednesday. Even though it is a little cloudy, I am certain that it is going to be a great day. I also updated yesterday’s blog to include a picture of Brendan at his award ceremony. I am a very lucky dad.
Last weekend while we wandered downtown Portland, Kubae and I got to talking about business locations. We would see a thriving business on one corner and another that appeared on life support a few blocks away. We saw businesses that seemed out of place in relationship to the other businesses nearby. It made us think about the old saying, “A great business in a poor location will fail. A poor business in a great location will thrive.” Or, “Location, Location, Location”.
Where you locate your business is a critical element of your strategy. This goes from what part of the country you locate to which part of a neighborhood you occupy. I have often seen small businesses in challenging locations and when I discuss it with the owner, the answer has been typically, “It is what I could afford.”
I can appreciate the response but I think you owe it to your customers to really give this thought. For instance, imagine you own a specialty home goods store. You buy handmade decorative items from artisans in your area. So far so good. Now, who is your target customer?
Lets say your target customer happens to be a working couple who have limited time to shop but have lots of discretionary income. They like shopping at other specialty stores and currently prefer to “touch-and-feel” their way through a shopping experience. They eat out two or three times a week and prefer nice restaurants over fast food.
Knowing these basics, where are some locations and why might you choose one over the other?
- A strip mall near a busy intersection with good traffic flow. The strip mall has a hair stylist, a convenience store and 3 other vacant spaces. Rent is reasonable.
- An industrial type warehouse with some manufacturers and truck storage. It is a little out of the way but the rent is very reasonable.
- A strip mall located across the street from a major regional shopping mall. There are other specialty shops such as a children’s boutique, a spa and nail salon, a highly rated restaurant. Rent is on the high side.
I have given just 3 examples but you get the point. The right location can help your small business get additional exposure. It may cost more but the potential for new business may be worth the additional cost. Think about this in relationship to the spaces above, your business and your target customer.
Chances are, your prospective customer is not going to search for you on the internet; at least not initially. This business described above is solving a problem that the prospect doesn’t know he has. By locating in the first strip mall, you might save money but probably will not get the right traffic flow. The same goes for locating in a warehouse away from every day traffic. Definitely a potential money-saving move but may not help you generate additional traffic.
If you are certain of your target customer, you might evaluate that being near a highly rated restaurant and other specialty – but not directly competing – businesses might be the right opportunity. You could get walk-in traffic from before and after dinner or those who were shopping at other specialty stores very close by. You will definitely pay more but your odds of attracting the right customer, your target customer, will greatly improve. And getting your target customer in your location is absolutely critical.
So as you plan and budget for your business, think about location and the opportunity for increased sales, not just the cost of the space. As you are planning, consider bringing in your accounting professional to discuss your budget, your plan and even your target customer. Your accounting professional has a wealth of contacts and information that can be of huge benefit to you in the planning phase. If you do not have an accountant or are interested in a second opinion, feel free to reach out to us at Currie & McLain. We are happy to offer a free no obligation consultation to help you determine if we are a good fit for you and your small business.
Have a great day.