How to Choose the Right Property for Your Business
According to statistics, 1 out of 5 businesses fails within the first two years of opening. The reasons are varied - owners not being adept for business, opening the business at the wrong time, economic recessions, products that are not enticing, products that are too expensive - or choosing the wrong commercial property.
It’s true - the property you pick can help your endeavor by attracting customers, complementing your business and commercial activity, and becoming a staple in the community, or it can work against you. If it’s cramped, aesthetically unappealing, in a bad location, or overpriced, it can sink your business before it even takes off. Here is how to choose the right property that will complement your business perfectly and allow it to flourish.
The Right Location
First thing’s first - the location has to be right. There’s no use opening a professional-grade gym in a neighborhood full of seniors, or a discount store in an affluent part of town. Location, location, location is always the first and foremost concern when it comes to real estate, be it commercial or residential.
The most important thing is for the location to be accessible. You don’t want to be hidden away somewhere unless that’s part of the appeal and mystique of your business. Great if you’re a speakeasy, less so if you’re a store. Ideally, you want a space that is visible from a main street, for maximum opportunity. Otherwise, a location in close proximity to a major landmark or other recognizable institutions is also great.
Ample Foot traffic
You also want a location that gets passed by people regularly, everyday, at all times of day. If you’re in a visible location, but that isn’t frequented by anyone, that’s a problem. The more people you can get in, the better, so aim for a major shopping street, social hub, business center, etc. with a lot of foot traffic, depending on what your business does.
Finally, make sure the location makes sense for your business. Who is your target customer? Are they present in this area? Are they likely to pass through the area or be interested in your product or service?
Look into other similar businesses and their presence in the area. Is the area underserved? Is it because there is no interest for a coffee shop in this area, or is it just because no one has opened one yet? Can you fill in that niche? On the flipside, if the area already has a strong community of cleaners, you don’t need to also open a cleaners here, because chances are you won’t get a lot of business.
The Right Size
The size of the space is also crucial. Too big, and you’re paying rent or a mortgage to waste space. Too small, and you’re cramped, which can affect your image, the experience your customers have, and the overall success of your business. Here are some aspects to take into consideration.
Space for Clients / Customers
First and foremost - is there enough space for you to comfortably run your business? If you have a restaurant, for example, is there enough space for a kitchen and for tables for customers? If you’re opening a store, is there enough space for the merchandise to be displayed properly? Crowded SKUs don’t make a good impression and don’t encourage sales.
Space for Storage & Backroom
For most types of business, you’ll also have to factor in some backroom space for storage, order processing, food preparation, break rooms, etc. At first glance, a space may seem large enough, but you may realize that it cannot appropriately accommodate all your needs that are separate from customer service and interaction.
Space for Bathrooms
Most businesses will also require you to have a proper bathroom. Whether it’s for customers in a restaurant or coffee shop, or just for employees’ needs, it’s not something that can be skipped. More importantly, it requires extra space, extra money, and other construction considerations.
The Right Price
Let’s get down to brass tax - most business owners will be the most interested in the price, so that’s one of the primary considerations when it comes to choosing a property. The better and more central the location, the more it’s going to cost.
Your rent or mortgage payment is going to be your biggest financial commitment and that’s something you need to accept. But you can still make a smart choice. Sometimes, making a bold move and renting an ultra visible - and expensive - space can pay off thanks to accessibility and exposure alone. But you can’t bank on that. In order to lower costs, you can sign a lease for a longer period; that’s going to incentivize the owner to knock down the price.
You may have the rent figured out, but that’s not the only thing you need to worry about. You also have to budget for extras. Depending on the location, you will have different financial commitments like property tax, parking spaces, utilities like energy, water, or your internet bill, not to mention general maintenance expenses you also need to account for. Remember that the monthly rent is not your total.
The Right Look
Fair or not, looks matter, and most customers’ first impression will be created based on what your space looks like, so choosing a property that is visually appealing is half the battle.
When viewing potential properties, look closely at the overall structure - what does it inspire? Is the architecture interesting? Does the building stand out, or does it blend in? Are there any interesting particularities you can take advantage of in order to make this space pop among the other retail spaces on the same street? It doesn’t need to be perfect - that comes later. But the basic structure itself should have good potential.
A Good Eye
When you’ve got a good building, you can easily transform it into whatever you need it to be to attract customers. Is it going to be an independent bookstore that stores books in quirky alcoves? A modern coffee shop where teenagers come to take advantage of the free Wi-Fi? A hardware store with a hard, industrial vibe only for the most select connoisseurs? Think about the kind of client you want to attract, and then create a space that they would feel comfortable in.
Opening a business can be a delicate balance and a nerve-wracking experience. With 20% of businesses failing during the first two years alone, you have to make sure that you are creating the perfect environment to thrive. The property is a big part of that, because it has so much to do with the way you present your business.
Your commercial space should be spacious enough to accommodate all of your needs and operations, not so expensive that it eats into your profits, and most importantly - in the right location that is going to attract customers and help your business gain visibility and popularity.