“location, Location, Location.”

How to evaluate and choose a winning retail location

HANOVER, MASSACHUSETTS (Thursday, September 01, 2005) - The perfection of a “touch and feel” approach to evaluating and choosing retail locations is the key to successfully siting a retail business. This is a crucial ingredient maximizing the store’s revenue potential.

The Convenience Factor

For convenience oriented service businesses, the “touch and feel” formula begins with an assessment of sites within a targeted geographical region. The site should be convenient to a commuter route, on the AM side of the road (where commuters pass on their way to work), and situated before the entrance to a highway.

The site will ideally have 2 curb cuts to facilitate ease of entering and exiting, and offer an adequate amount of square footage, requiring as little build out as possible to minimize costs.
If a site isn’t available directly abutting a commuter route, the next best alternative would be a location in a shopping center, near a supermarket.

Demographic Nuts and Bolts

One of the basic components in evaluating the potential success of a retail location in a given geographic area involves the procurement of an independent demographic assessment. An outside independent source, such as ESRI Business Information Solutions, will run the demographics, building a profile of discretionary spending in a particular locale.

Variables such as expenditures for health care, take out food, cable TV, toys for pets, health clubs, and dry cleaners are included in this evaluation. The national average spending index is 100, so a more desirable area is one in which the spending index is 200, twice the national norm.

Next the dollar amount available for spending on a given service is calculated, within a 2-mile radius of a specified location. To determine the “fair share” of the market for a new business entering the area, the amount available for spending on a given service is divided by the number of businesses offering the same service within that 2-mile radius.

“Running the Market”

The essence of the “touch and feel” approach literally involves driving the target market area. For example, stand in front of a seemingly ideal potential retail location on the AM side of the road during the peak of the morning commute. A steady volume of traffic would be expected to pass by on the way to a nearby highway entrance.

If only limited traffic materializes, it becomes necessary to backtrack and determine where the traffic headed. A shortcut to the highway may have bypassed this seemingly ideal retail location, making it less than desirable as a winning retail location. Clearly, verifying where the traffic is coming from is essential.

The final aspect of the “touch and feel” approach to evaluating and choosing a winning retail location entails additional hands-on, on site analysis, conducted by asking passers by what they think about your business being located at this site. It’s a straightforward and economical approach that may yield positive results, or may save you from making the mistake of a lifetime!

Lawrence Friedman, a Lapels co-founder, is the CEO and sole owner of Lapels Dry Cleaning, an innovative national franchise organization with 20 units including one in Bridgewater, NJ , offers its franchisees comprehensive training and an extensive array of support services, including the opportunity to shape the infrastructure and policies of the franchise.

The company is always on the look out for ideal retail locations.

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