“Just because you build it, doesn’t mean they will come” – Business Owners Wondering Where Their Customers Are
When we decide to start a business, be it opening a dental practice, a retail store or some other brick and mortar space, the idea of business can make us turn a blind eye to some important items. One of them being the location we choose.
You see, starting a business venture can be one of the most exciting times of your life. The possibilities of the future, excitement of the unknown is what allows business owners that initial burst of enthusiasm. We find the extra hours to work on an idea, don’t mind running on a few hours of sleep, and high doses of caffeine, all to see our dream a reality.
Keep in mind though. That the excitement we are experiencing, can also mean we overlook key items. We justify settling, we opt to just make things work, because for most of us patience isn’t a virtue!
Location is the biggest one we will settle on. Many times this is because real estate is sometimes limited in the area we want to be, so when something comes up with perhaps the right square footage, we leap.
First hand experience here. My retail space was only going to be 1000 sq. ft. No more, no less. To me, if it was that size it would be manageable and comfortable. That size is also not the easiest to find. So when I found one, although there were some reservations of doubt happening, I figured it would be okay. I was stuck on the size.
It didn’t have the best parking, and visibility from the road was okay, but wouldn’t catch the eye of most. Yet, because the size was where I wanted it (and I desperately wanted to start my business) those weren’t going to be huge issues. I would just advertise more (which costs more money) and well, most of the other tenants had just moved out, so parking was good (another red flag)!
When looking at location, you need to focus on the things you can’t change, and how they will impact your business. The layout and design of your new space, can be built out to nearly exactly what you want. You can choose the colors, change the flooring, put your office wherever you want. Just like making changes in your home, you can make the interior look just like your vision. This is what architects and contractors are for. Trust me, any space can be recreated.
It’s the physical location, parking, signage, upkeep of the commercial space that you won’t have control over. Funny, these are also the items that can help promote your business or detract from it.
Below are my 10 key items I look at when viewing a commercial space.
1. Visibility. How visible is your office from the road. Will people see your sign? How will they know you are there? Is the building hidden behind trees, is the front facing the road? If you were a potential patient, would looking at the building tell you the practice was there? How visible the office is can drastically help with advertising, and reduce that budget. It costs money to get those new patients, and will be like that throughout the life of your business. Why not have a highly visible office, and let the sign on the building do some of the work for you?
2. Style. What kind of structure is this? A stand alone building, or an office in a multi story building? Will you be in a strip mall, at an intersection? A stand alone building is great, however you have no foot traffic. An office building can be great because you will have instant people to attract as new patients, however, visibility might be low, other dentists could move in (a clause you would want added to a contract), and parking might be an issue. A strip mall might see higher levels of turnover in other businesses, but foot traffic and visibility are usually really high. Parking may or may not be a concern.
3. Parking. What other tenants are in the building. How many spaces are there. How many employees are you anticipating having? There was plenty of parking near my retail store, until a hair salon opened and then well, parking became a problem. If your patients can’t park, how can they get to their appointments?
4. Utilities. This is one that is easily overlooked, and there is no standard. Do you have control over your own thermostat? Are utilizes metered individually or on a single meter and then divided? What are CAM or maintenance dues each month?
5. Signage. If you’re in a strip mall or free standing building, you most likely can have a huge sign that attracts people. A monument or pillar sign might up also, listing all the tenants in the building. Office buildings will typically be more strict, and may not offer any signage at all. There was a local building that had 3 dentists in it. The building was beautiful, plenty of parking, good area. But not one sign. No one new what was in there. The newest dentist was struggling, because he wasn’t prepared to advertise, and didn’t have a patient base , so could rely on word of mouth (which yes is great, but does take time). Needless to say, he was moonlighting for the Public Health Service to earn a living.
6. Other Tenants. This is actually really important, because how busy they are or how many employees they have could be an asset to you. Some dentists like being in a building with other dentists, I don’t get this at all. I’ve been in building where there are 5 general dentists offices all in a row! Talk about taking money out of your own pocket. My suggestion, find businesses that have people coming back frequently (good for marketing). Like a chiropractor office, beauty salon, law office.
7. Days on the market. This is HUGE! If a space has been on the market for over a year, I would say no. There is a reason then, it might not be noticeable at first, but there is a reason. Obviously the space isn’t in high demand. Or perhaps the landlord is difficult to work with. If it’s been sitting, I would step back for a minute. In addition, just because a commercial space has been listed for a long time, does not mean they will negotiate. You won’t get a screaming deal.
8. Upkeep. Do not just assume! What will the landlord be taking care of? Do they wash the windows each season (nothing ruins the view worse than dingy windows!), do they plant flowers in the spring, do they have a house keeping service to clean the common areas? If there is a public bathroom that you intend on using for your patients, is someone cleaning it at night? No question is dumb, ask them all!
9. Visit more than once. Do not make a decision from a single 20 minute visit. Go by at different times of the day. If you go by at night when the other building tenants, have left, you might miss out on the punk rock music from the salon next door or the smell of pizza coming from the local eatery that comes through the vents. Different days, at different times. That’s my opinion. Surprises can difficult to deal with.
10. Get an agent. Yes, you can scour the internet and look at a ton of listings yourself, or find a real-estate agent that specializes in commercial leases. They can help with negotiations (which we talk about in another blog), find properties that might interest you and keep you updated as new locations are coming available. They are usually a wealth of knowledge and can help make the process a little smoother.
Listen, I get it. You want to start that business now! It is the right time, or at least it feels like it to you. But, a bad location choice can do some major damage in terms of how fast you grow and how much money you will need to throw at advertising or even if you are in business after that first year.
My expert advice, look at the things you can’t change. If any red flags pop up, stop. Think about it. Will it increase your advertising budget? Will it deter people? Ask friends to drive by and give you their initial thoughts. Think about it from a patients eye.