Using sense and the Census to locate your business
There are many factors that go into choosing the right retail location.
What may be considered prime space by one company may not fit the needs of the next.
Finding the right spot for your business requires careful consideration and an understanding of who your customers are and where they live, work and drive, say experts.
"You have to identify your customers in demographic terms," explains Chris Gattis, founder of Blue Point Strategies, a Huntsville, Ala.-based site location and business consultant.
And the best way to do this is by creating a profile of your target customer's characteristics. Think of your customers in census data terms (i.e. income, marital status etc.), says Gattis, who offers seven steps to site selection at bluepoint strategies.com/uploads/Retail _Site_Selection_for_Small_ Business.pdf.
Once you've identified your target customers, you can try to locate them by sorting available demographic data by ZIP code for your area using the basic search criteria at the U.S. Census Bureau Web site (see factfinder.census.gov/home /saff/main.html?_lang=en), suggests Gattis. Identify those ZIP codes and neighborhoods where your target customers are most likely concentrated, and visit them.
Look at where the main retail areas are, as well as major work centers and feeder businesses where your target customer would also be expected to shop, he notes.
"You need to go to the area that you're considering and drive around that marketplace and visually see the foot traffic and car traffic each shopping center has," explains Stuart Fagen of The Fagen Group in Syosset, which specializes in retail leasing and shopping center consulting.
When Fagen goes into a new market, he likes to visit the dominant shopping center. You can tell a lot about the customer demographic by just sitting in the parking lot, he notes.
Also, pay attention to the tenant mix of the sites you're considering, adds Fagen, founder of The Retail Network, an industry networking group.
"Most smaller retailers would benefit from being near a high-traffic generator such as a supermarket or deep-discount retailer," he says.
Keep in mind you may have to adjust your expectations for highly desirable sites, says David Latman, president of DLL Real Estate Ltd. in Manhattan, which specializes in retail leasing.
"If it's a prime location, there will be many sophisticated contenders," says Latman. "You need to be flexible and creative in choosing a site because the best locations are going to be highly sought after."
Adam Rosner, president of Bagel Boss Holding Corp., which runs and owns the Bagel Boss franchise, understands this. Over the years, he's had to compete for sites for Bagel Boss, which has 13 locations on Long Island.
"It becomes a real estate game," says Rosner, who has worked with Fagen. The more desirable sites can take years to get into, he notes, adding that it took him 20 years to land a spot in a prime shopping center on Union Turnpike in Lake Success.
"I'd call the landlord twice a year," says Rosner, noting persistency paid off.
Securing a broker can help because often they have the inside track to sites, says Rosner.
It also helps to enlist a good real estate attorney to help navigate the lease, which should include your signage rights, whether you can negotiate to be the only provider of your type within a center and what provisions, if any, will be made if a major anchor leaves a site, says Eric Rubenstein, a partner at Ruskin Moscou Faltischek in Uniondale, who chairs the firm's real estate department.
You should also consider the landlord's financial viability, he notes.
"Make sure you do your research," Rubenstein says.
Long island retail vacancy rates
Rates are improving on Long Island.
1st quarter, 5.1 percent
2nd quarter, 5.3 percent
3rd quarter, 4.7 percent
4th quarter, 4.5 percent