Starting your own business might seem a daunting task, but taking risks is the key to success and what better time than to start now! Even in uncertain times, small businesses (SME) are considered the backbone of the U.S. economy. They account for nearly two-thirds of net new private-sector jobs and are also responsible for creating more jobs and giving higher wages. Thus, the government’s response to COVID-19 and the elements of the CARES ACT that focuses on the redistribution of financial support to small business owners. In the long run, when executed correctly and managed closely, there are more benefits than disadvantages to launching a small business today.
So, how can you achieve your goals as an SME? The answer is simple: LOCATION. Location is everything and can either make or break your business. Poor location selection is results in massive loss of investments due to poor traffic, over supply of competition or lack of community need for your services. In the next few months, while an influx of inventory will return to the marketplace, it is still important to perform a comprehensive review and analysis of every neighborhood in consideration before jumping on a new deal. Operational regulations and social distancing requirements will transform the course of business, but with a strategic relocation plan inclusive of a comprehensive knowledge of the community you will mitigate your risks for failure. Here are a few critical benchmarks to follow when it comes to “finding your business a new home”:
- Research and identify your customer demographics. When it comes to choosing your location, it is smart to think of the demographics you are servicing or targeting. You target audience, their shopping behaviors and the advantage of a location that is most accessible to them while transform your opportunities for sales. This critical preliminary step of demographic profile will make it easier for you to research ideal neighborhoods for your business.
- Assess your competition. Before purchasing or leasing a property for your business, it is important to identify a healthy amount of local competition. In some instances, businesses can find success in locations where there is a market gap of vendors. But in busy New York City, a location with no competitor in your respective business maybe a sign to step back and review the barriers of entry. If your location is in a luxurious residential district or close to churches or schools, leasing a premise for a bar maybe a costly failed venture due to licensing limitation or community boards rejection of businesses like yours. Know and investigate the community to get a handle on what decisions you should make. Don’t allow competition to run you from an area, as competition is healthy since it means that more people are likely to visit an area for the continuity.
- Scrutinize low cost locations with low visibility. If you are a service business, exposure to critical to introducing your business to a new population. Locations set deep into residential side streets, or non-commercial districts, may come at an attractive price tag but are not in the pathways of your potential consumers. It is vital to calculate the prospective cost-benefit of a location with a slightly higher price tag within a secondary commercial area with essential businesses nearby. If you are not a major brand that customers specifically search for, its critical to identify anchor operators nearby that can facilitate brand exposure and visibility. Is there a busy coffee shop, grocery store, pharmacy or pet store nearby that is frequented by your ideal customer?
- Overwhelming foot traffic in premium districts isn’t always the best. As a small business owner, cash is king and mitigating excess costs in the first 5 to 10 year of operation is the surefire way to succeed. While most may thing paying a premium for locations like SOHO, Madison Avenue or Herald Square will automatically assure you success, there are many examples to the contrary. Premium locations priced in excess of $250 per sqft do not always mean more of your customers entering your doors. You need to consider if the premium rent is aligned with an eating or shopping district if you have a restaurant or boutique. What is the volume of sales necessary for your brand to not just meet but exceed breakeven points into profitability? Maybe you should consider niche districts that have a cultural or social population driver but less traditional tourism or foot traffic for your operation. Don’t settle for an area that is off-putting for your customers when a few blocks change in location may put you closer to your ideal customers natural paths.
- Are all these factors OVERWHELMING, employ the help of a real estate agent to help with your next steps? As experts in commercial and retail real estate, the right team can help you identify the best locations for your desired business. With critical industry tools and information you selected professional can help you make a sound and educated decision. At Virtuoso Realty Group, we can help pair an ideal location and your business. We provide the most innovative solutions and strategies that will result in the desired growth and longevity for your business.