Retail Business Planning
If you are planning on starting your own retail business in the near future, the selection of the right location for your business is vital to your success.
Below is an excerpt from “How to Start a Retail Business” posted Entrepreneur.com in 2007 regarding finding a location, read the full article here
“How to Start a Retail Business”
Finding a LocationNovember 13, 2007
“Although a great location may not guarantee success, a bad location will almost always guarantee failure. A new retail business needs to be where the customers are. You want a location with a reasonable degree of security, access to public transportation for your customers and employees, adequate parking for commercial as well as personal vehicles, room for an office, and that all-important sales space. Where you locate will determine the hours you keep, who your clientele is, and what types of promotions you do. Also, where you set up shop will impact how long it will take you to grow. Luckily, you have lots of options.
The Homebased Retailer
Despite the benefits of running a business from home–low overhead, no commute, and technology options that make it easy to project a professional image–a retail business is one of the few businesses that is difficult to run from home. This is largely due to a conflict between needing customers to come to your place of business and the penalties of having a stream of clients visiting your home. Most residential zoning excludes retail, so your neighbors can report you to city or county officials if your business creates noticeable traffic, noise or parking problems. Some communities prohibit commercial vehicles or cars and trucks with signs on them from parking on the street.
One option for retailers who want to work out of their living room is to sell their goods and services from booths or tables at craft fairs, in cooperative booth space at emporiums or expositions, by mail order, or at flea markets. You can also sell retail on the internet.
The best retail location combines visibility, affordability and lease terms you can live with. Brick-and-mortar retailers need to be where the action is, so deciding where to put your business is every bit as important as the business you decide to go into.
Take the time to analyze the areas that appeal to you. There are three phases of choosing a location for your retail business: selection of a city, choice of an area or type of location within a city, and identification of a specific site.
In choosing a city, investigate these main factors:
- Size of the city’s trading area
- Population and population trends
- Total purchasing power and who has it
- Total retail trade potential for different lines of trade
- Number and size of competition
- Quality and aggressiveness of competition
Once you have a general idea of what city you like, choose an area or type of location within a city by evaluating these:
- Customer attraction power
- The nature of competition
- Availability of access routes to the stores
- Zoning regulations
- Geographic direction of the city’s expansion
- General appearance of the area
- Sales and traffic growth prospects of the trade area
- Demographics of neighborhoods
These are factors in narrowing down your site choices:
- Traffic flow
- Complementary nature of neighboring stores
- Adequacy of parking
- Vulnerability to competition
- Cost of the site”
Catalyst Analytics has created a tool called the 3L Score that will assist you during your retail business planning process. The report is easy to read and understand and we can measure any location in the United States. Look at the demo video below and don’t hesitate to contact us with any questions.