There is an old phrase that suggests the three most important factors in determining the desirability of real estate property are “location, location, location.”
With respect to the location of your business, the “where” of a property can make or break the best of business plans.
An obvious starting point is to determine what type of location is best for your business.
However, before getting to the stage of touring properties, here are some initial questions to ensure you are clear of your space needs.
Will customers come to your location? If so, how will they arrive? On foot? Or will they drive and require a place to park?
Will you attract more customers if you are positioned around other businesses, and perhaps even close to your competitors? For example, your business could benefit from other retailers that draw people to the area, industrial or office parks.
Does the area or building help to draw customers or are there concerns that will keep them away?
Will you be able to recruit employees and what will their commute be like?
How much rent can you afford? Research average rental costs to make sure your budget is adequate. Higher rent may result in higher prices, so think through whether your customers can afford it.
Are there restrictions that will prevent you from running and growing your business? The facility needs to be appropriate and adaptable to your needs. Will you outgrow this space too quickly? Are the wiring, air conditioning and other amenities adequate? Will zoning regulations or bylaws present hurdles?
Armed with an inventory of space requirements, it’s essential to do preliminary research. Location analysis tools are available that can provide traffic pattern information, demographic and lifestyle data and competitive analyses. If possible, poll your local network to gather information on their experiences with business areas and costs. Enlist the help of a local real estate expert from an established company in your geographical area. You will want to ensure they understand your customers and have proven experience in representing tenants in commercial real estate transactions.
Once you find that perfect location, you can start negotiating lease terms. Hidden expenses in agreements can surprise novices, so you will want to have a clear understanding of charges above your fixed or base rent. Depending on the strength of the market, you may also be able to ask for concessions from the landlord. Don’t go it alone with negotiating leases unless you have the knowledge and experience to do so. At any rate, you should have a lawyer look over the final lease before signing.
Depending on your space requirements, a fully informed decision on location can be complex. Determine your priorities, explore all your options, research thoroughly, and use expertise to protect you in this decision.
Cathy Goddard, owner of Lighthouse Visionary Strategies can be reached at email@example.com. She offers business and life coaching, workshops and the popular Open Forum speaker series. Cathy is founder of Lighthouse Mentor Network, providing mentor groups to local professionals and was nominated two years in a row for a Small Business BC award in recognition of the impact this program has on the Whistler community.