by: Peter D. Morris CRX, SCLS, SCSM, SCMD
Greenstead Consulting Group
Specialists in Commercial Real Estate Training and Consulting
In the first three steps we started with the business plan and became more specific with each subsequent step. These steps set the stage for being active in the market and securing the right space. Now we are going to look at the bigger picture again.
Now you want to determine the ideal areas to place your business. When I say area, I am not yet speaking of a specific location, but rather general parts of the city that are most suited to your business. You want to understand the market characteristics for the immediate future, the mid-term and the long term and how they will affect your business in each cycle.
This involves both science and art, as a good location for one business may not be a good location for another. For example, consider the business needs and criteria for a coffee shop and a fast food operation.
Since most of the coffee business will occur in the morning, the owner will want to find the highest traffic intersections for traffic heading into work. The owner should also consider locating on the corner, if possible, and on the far right hand side of the intersection from the traffic flow. Locating here generally means traffic will be slower than in the middle of the block, affording greater visibility. Even a few seconds of additional visibility can help a potential customer decide if they want to make an impulse purchase, such as a cup of coffee.
Conversely, the fast food outlet would be wise to locate on the side of the road with the greatest amount of traffic heading home. This allows the potential customer to easily grab and go with dinner, and avoid complicated driving maneuvers that may deter a sale. Again, the location should be on the far side of the intersection for that all-important visibility.
The adage that the three most important things in real estate are: Location, Location and Location, is definitely true. But that adage is meaningless unless you know what makes a good location.
An entire book can be written on location analysis alone and there are several services you may want to consider. For example, GIS mapping can be a great tool to understand the market potential for your business in different areas. Your city hall can provide traffic information as well as giving you insight for the future of various neighbourhoods. Your Chamber of Commerce or Economic Development Commission/Agency can also be a good source of general information.
I advocate walking or driving the various areas you are considering at various times of day and on different days. An area that looks perfectly safe during the afternoon may turn into an area your employees want to avoid at night. You will also want to assess area amenities for your staff such as food availability, alternate parking, etc.
If your business is dependent on customers driving to the location, make sure there is ample, simple parking.
If your business is dependent on a skilled workforce or you are relocating your existing workforce, you will want to take accessibility for staff into consideration. This includes commuting times, access to various types of transportation, etc.
If your business is warehousing you will want to determine availability of multi-modal transportation, access to primary markets, etc.
The task of location analysis becomes more complicated if you are expanding into a new geographic area or to a new city, county, state/province or even a new country; so it pays to take time to carefully consider the options.
Always bear in mind that you will have to live with the location you have selected for many years.