Where To Locate Your Retail Business?

Setting up a shop is one of the most exciting parts of putting up a business. When you get to see spaces for rent, you can’t help but think about what you want to place where and how everything would look like. It is exciting because you can already feel the business coming into existence. However, before you indulge with all the excitement choosing a location brings, you must first understand how it would affect your businesses. Here are a few choices you can consider in choosing the kind of location your business will be in and how they affect your way of work:

1. Home-based. Working at home is a dream for many. You get to sit wherever you want, manage your own time, and even profit while just wearing undies. This is perfect for setting up a small or online business. One of the main problems when you decide to have your business at home is storage space. Everything will be everywhere unless you have a room dedicated for your inventory. Home-based businesses are also only good for people with a strong discipline. Sure, you get to work in the comfort of your couch, or even bed, but can you resist the urge to turn on the television? The urge to play games? Do online shopping? Sleep? If you are sure for yourself that you have the tendency to slack off, better choose a different location for conducting your business (in coffee shops perhaps). Choosing to go a home-based setup will surely put your discipline to the test, but it is the easiest way to start your own small business.

2. Mall space. There are a lot of potential customers all around your store front. All you have to do is be relevant and inviting, more so than your competitors also in the mall. The main disadvantage of malls is the sky-high leases. On top of this, most malls now have renovation standards that are expensive to comply with. Mall spaces provide you with the best opportunity to really make big money because of the volume of people visiting the mall. Unfortunately, competition here is also the most intense and for most newbies with limited funds, it is safer to test less challenging environments at first.

Also, due to restriction on what structure you can build, businesses that depend on using their building itself to convey the uniqueness of their brand and culture will not be as effective as stand-alone locations. The physical dimensions of the mall space, along with contractual restrictions, limit what could possibly be done. The uniformity of mall spaces lessens your possible differentiators.

3. Stand-alone. Concept stores work best in this kind of places. Take a look at high-class buffet restaurants and hipster coffee shops. Why do they have that much customers despite their eerie locations? They may only have one or two branches, but they get to be a unique go-to place for their patrons and adventurous people. They have the freedom to shape their own concept and retain their value in the market. Plus, they don’t necessarily venture into competition as concept stores tend to work on their uniqueness.

Acquiring suitable commercial land spaces is far more capital intensive as compared to renting mall spaces. If you happen to own one, or have a family member or relative that have lands you can use commercially, consider leasing from them or partnering with them.

4. Condo Space. If storefronts do not affect your business that much, you might opt to rent condo spaces. They can provide you with ample space for a medium-scale operation and you can focus on interior renovations (solely because that’s all you paid for) — makes it easier for you to make everything look professional. Condo spaces also get to enjoy the benefits of security as all of them will have security personnel and receptionists provided in the lobby area.

The problem with renting condo spaces is that your business will be a bit tricky to find, especially if the building is mixed with residential units. Your office will be affected by any electrical and sew-age maintenance by the building owners, that although will be good in the long run, will surely cause you problems for a few days. That is not bad as you get to enjoy the benefits of having available maintenance crew anytime of the day.

Location is the most factor in a retail business. Treat choosing the right location as part of your strategy. Getting it right will contribute to your success as much as getting it wrong will make you consider closing shop. There is no guaranteed formula that you can use in choosing the right location for your business. A little observation will make you see that even multinational retail chains make mistakes in location. Nevertheless, spending time and capital to look for the best location for your retail venture is a wise investment.

*Originally published by the Manila Bulletin. Manila Bulletin, C-4, Sunday, February 28, 2016. Written by Ruben Anlacan, Jr. (President, BusinessCoach, Inc.) All rights reserved. May not be reproduced or copied without express written permission of the copyright holders.