How to choose the best location for your store ?

If you're reading this, chances are you've made a business plan and are ready to find a business location that's right for you.

As you walk down the main street of your neighborhood, you will notice various stores offering their goods and services to the community. For those who are successful, the choice of business location has certainly been carefully planned in advance. For businesses that disappeared quickly, a poor choice of location may have played a determining role.

Now happens to be the perfect time to establish a physical location for your business. Physical stores are booming. So where to start ? We've put together this little guide to help you avoid mistakes and identify the best possible trading location.

The importance of your business location

The location of your business can impact the volume of organic foot traffic your store receives. Business location can also influence your business branding and image, which increases your ability to attract new customers. In other words, the location of a store can be a determining factor in its success. The phrase “location, location, location” gets thrown around a lot in real estate for good reason.

How to choose the right business location?

Finding the right business location requires strategy and careful research. You need to weigh the attractiveness of a location against its cost, while ensuring you follow local laws and regulations. To find the best location for your business, follow the five-step checklist below.

1. Understand your target audience

Your business probably has an ideal customer that you want to reach. If you have a hip clothing brand aimed at Gen Z, you won't choose a location in the suburbs. If you sell high-end handmade ceramics, you probably don't want your business to be located in a neglected mall next to an accounting firm.

So here are some questions to ask yourself about your target audience:

Where does your target audience live? Reaching your buyers where they are is crucial. Consider the demographics of your target audience and compare them to the neighborhoods or streets you're considering.

Where and how do they prefer to shop? If your business was exclusively online before and your customers are not grouped in one place, this may impact your choice of business location.

How important is foot traffic to you? Maybe your business is already well known and people come from far and wide to visit. But if this is not the case, you need to know the volume of foot traffic a location receives. Visit the location at different times of the day and week to gauge footfall.

2. Study the competition in potential locations

Explore the communities you're considering and examine the businesses that already have a presence there. They should complement your business rather than directly compete with it.

However, being close to competitors can have a potential advantage: if these stores attract a lot of customers in the area, you can also attract impromptu shoppers who want to compare products. Just make sure your products are clearly distinguishable from those offered by other stores.

How close are your competitors? Are you next door or a few blocks away?

Who is your competitors' target audience? Even if a store sells similar products, its target audience may be different.

What added value does the competition offer? Your product may have a different style, newer features, or lower prices.

3. Think about the accessibility of the space

We've already talked about foot traffic, but there are other aspects to consider when looking for the right retail location. This is primarily about how easy your store can be spotted, accessed, and left.

Is your storefront easily noticeable? Does your business location have clear, prominent signage? Will you have enough space to display your products to passers-by?

How accessible is your business location? Is it easy for a person with a disability to get to your store? If you sell maternity or new mom clothes, you might want a place with no stairs or wide doorways for strollers.

What is the parking situation? No one likes looking for a parking space. If your business is located in a neighborhood where everyone drives, you don't want your customers driving around the block and not finding a space before giving up and driving somewhere else.

4. Pay attention to your budget

When choosing a business location, managing your finances is essential. Whether you self-finance your business or get a business loan, you likely have a set budget that you need to stick to to keep your store financially viable. Business owners need to consider several recurring costs that they will face in addition to monthly rent.

What are the recurring charges? Consider monthly expenses such as utilities (electricity, water), annual state taxes, or business insurance.

Are you planning any development or renovation work on the space? Unless the premises are ready for use, you may need to upgrade or install new equipment to meet your business needs. Even minor renovations, such as painting or re-flooring, can be an additional cost.

What size space do you need? If you are planning to hold events at your premises, you may need to look for a commercial location that offers enough space. Or maybe you need more storage areas or changing rooms. Determine your specific needs to avoid paying for excessive space.

5. Don't ignore local laws

Each county or city has its own regulations that businesses must follow in order to establish themselves. Be aware of zoning rules which may influence the use of space. Before renting or buying premises, make sure your business can comply with local regulations.

Do you have the right to modify or enlarge the space? Zoning rules may limit the height or size of the commercial building. They can also restrict the type of signage you can use on your storefront.

Are there any noise restrictions? If you plan to host events or create noise, find out about local regulations regarding acceptable sound levels or hours when noise is allowed.

Can you sell alcohol? If you plan to offer wine tastings or serve alcohol in your establishment, be sure to know the local laws on the sale and consumption of alcohol.

Choosing the right business location is one of the most important steps to opening a successful brick-and-mortar store. By considering your target audience, competition, accessibility, your budget, and local laws, you'll be better prepared to succeed in the retail industry.