Location, Location, Location!

Choosing a location is one of the most important decisions entrepreneurs make when planning or relocating their business venture.

Here’s a request we received from a retail client: “I might have an opportunity to move on to the main street, but I need more information for my business partner. He doesn’t seem to think it will make that much of a difference.”

Here is our advice:

Know your customer

The right location will totally depend on who you’re selling to and their buying patterns. Find out from your target customers what their preferences are.

Exposure vs. Destination

Once you know your customers you can determine whether your business will rely on exposure or will be a consumer destination.

If they are impulse buyers, “…oh, let’s grab a coffee before we head out of town!”, you’ll luke-chesser-KR2mdHJ5qMg-unsplashneed a location that provides exposure. Consumers will typically buy impulsively if your product is not differentiated from your competitors. Great signage will remind potential customers to buy your product when they pass-by. In many cases, the better visibility your retail store has, the less advertising you’ll need. A specialty retail store with less visibility will need to spend more on marketing than a store located on a main thoroughfare.

If your product is unique enough… “This is the best ________ store in the area!” …you don’t have to worry as much about locating your business in a high-traffic or high-exposure location. When your product is different from your competitors, your customers will come to you!

Destination business are often high-end or unique products that can’t be found elsewhere, or strong brands that are the first to open in your area. Keep in mind, this isn’t an all-or-nothing choice. Most destination businesses will still benefit from high exposure, but, depending on your business, you might not need to pay the premium it demands. If tourists are part of your target group, then marketing, good exposure and business-to-business referrals are important.

 Competition or Convenience

Have you ever wanted to go out for a meal with friends but were unable to decide on a street_signrestaurant? “Let’s head down to Hypothetical Avenue,” says one of your friends. “There are lots of places to eat down there.” In this case, several competing restaurants have clustered into a node. People know that in certain areas they’re sure to find a restaurant they enjoy.  Locating in a ‘district’ with similar businesses can attract new customers to the area and benefit all.

If you open your business in an area that’s already has businesses like yours, you might find there aren’t enough customers to go around. Similarly, if there’s a well-established brand already controlling the market and your product doesn’t offer customers a unique advantage, it’s unlikely you’ll be able to draw the customers away.

Locating with complimentary businesses or businesses with the same customer base can be beneficial. Customers visiting neighbouring businesses may be drawn into your store because they must pass by your door. Consider what other stores your target customers frequent. Potential customers with a similar profile may become new customers due to convenience.

Walk, Bike, Ride…

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When you know your target customers, you will know how they are getting to your proposed location. Will they need parking? If so, consider their parking options: street parking, public lots, paid parking. Consider how many open spaces are available during your busiest hours. If your customers are using public transit, the closer you are to the drop off point, the more convenient it will be for your customers to frequent your store. Accessibility for staff and customers with disabilities improves business. Here’s a link to, “Accessibility in Ontario: information for businesses

Questions?

For more information or if you have question contact Nick Kinkel at nick.kinkel@ontario.ca

By: Nick Kinkel

Agriculture and Rural Economic Development Advisor

Source

Ramachandran, Nandini. “5 Steps for Finding the Right Location for Your Retail Business.” 5 Steps for Finding the Right Location for Your Retail Business, Qualico Commercial, 20 July 2017, blog.qualicocommercial.com/blog/5-steps-for-finding-the-right-location-for-your-retail-business.

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