Just Starting out - It's All About Location
If you are just starting out, now is a very crucial time, especially finding a location:
All the money in the world cannot buy you success without a good location for your business. It's as simple as that! A secondary location with a cheaper rent will greatly increase your chance of failure that critical first year, period! Nothing drives a new business more the first year of operation than a good location. The longer you are in business, the less important it is, but no matter how good your product or service is, you will struggle that first year without a good location. Ask around of those who know, your fellow retailers, and they will tell you that location-finding takes time, perseverance, hard work and luck (being in the right place at the right time).
Location Information Checklist
To avoid overlooking some location factors, you should develop a checklist of information for evaluating a site. While all the information called for in the following checklist may not be needed; the list can call attention to factors that must be addressed by you at some point in time.
- Dimensions and total square footage of site: If you make your own ice cream, you will need at least a total of 900-1,000 square feet of space, in which 250-300 can be used for ice cream production purposes.
- Linear feet of site frontages: Frontage must be at least 16 feet wide.
- Traffic controls affecting the location: Cars must be able to enter the parking lot in front of your store directly from a stop sign or traffic light.
- Posted speed limits of adjacent streets: Speed limits should not be more then 25 mph. on any road facing your store location.
- On-street parking: Is there on-street parking? Knowing this is very important if your main customer base is day traffic.
- Parking lots that are available: What lots are available and for how many cars?
- Existing structures on either side of possible location: Who are your neighbors and are they helpful to drawing traffic to your shop?
- Type of energy available: Was your possible location used previously for a food establishment? If so, what utilities are available?
- Present zoning classification: How is the space zoned? The space must be zoned for foodservice use.
10. Building limitations: What is the space being used for now? What uses or restrictions is the landlord making regarding the use of the space? Are you allowed to have tables outside your space on the sidewalk?
11. Character of surrounding area within one mile: Besides the one-two mile radius, what retailing surrounds the area of your space going in every direction at least 100 yards?
12. Competition within 1mile radius: While you are particularly interested in what your major competition is, what other foodservice establishments, like restaurants, sell ice cream?
13. Lease price requirements: Don't consider any lease where the rent is going to exceed more than 15% of annual budgeted sales. The following example illustrates how a 15% rent structure might work:
Example: sales- $300,000
Based on 15% rent- $45,000 per year or $3,750 rent per month
Square footage- 800 square feet at $55 per square foot = rent of $44,000 per year comes out to a rent percentage of $3,666.66 per month.
14. Length of lease available: What kind of lease did the previous tenant have in monthly rental cost and length of lease? Knowing the answer to this question will enable you to guide yourself in negotiations with the landlord.
Finally, and critically, can the concept and the potential customer base support the location being considered?