Choosing the next site for your business depends on the same factors you considered the first time around: type of business, resources you need, where your customers are, and so on. If you’re opening the same concept, look for a similar facility. If it’s not ideal, see if what’s needed can be added. For retailing, you’re looking for customer traffic, but does it have to be foot traffic? If you have a service business, then a fully functioning facility is most important—you don’t want operations to be restricted in any way by your building or location. Will an industrial location be suitable or is a commercial one better? Make sure you look for adequate parking for both employees and customers (you don’t want customers to give up and drive away because they can’t park).
Remember to think about room to grow. Are you planning on hiring more employees in the future or maybe expanding upon another part of the business concept, such as a different service? Are there any ordinances in the area that affect what you want to do? It would be disastrous if you found out later the building doesn’t allow sidewalk sales and that’s a major marketing effort of your business. What about utilities? Is the building hard wired for cable? What kind of Internet service is available? Nothing’s more frustrating than slow computer connections. What is the phone service provider and what do they offer?
Check with your state, city, and local Chamber of Commerce for suggestions. They’ll have insight on what areas work for what industries. This is especially important if your second location is in another state. And don’t overlook your local Small Business Administration district office and the SBA’s Small Business Development Centers as great resources. Be wary of areas with tax incentives. There’s a reason for these incentives, so make sure they aren’t detrimental to your business.
Since it’s your second location and you’ve already gone through the startup process once, learn from the first site! What are your needs, wants, hidden costs, etc? What did you think you needed the first time around that you could’ve done without? Create a priority list of your must haves, your “would like to have” and your “it’d be nice to have.” Then with your real estate agent you can grade the potential sites.
So are you ready to talk the talk? When it’s time to talk to a commercial real estate agent, here’s a handy reminder list of how to do it:
- Create a package to “sell” your business. The better you look as a tenant, the more attention you’ll get from agents and potential landlords.
- Find an agent who has expertise with your type of facility. That could be tough because commercial agents are very territorial. (If they are representing the landlord, they want to represent you, too.)
- Ask questions about total costs. What is included? Is it Vanilla Shell (the basic finishing, white walls, concrete floors, etc.), interior sheet rock (plasterboard walls)? What are the ongoing costs? Is it NNN (a triple-net lease, one in which the tenant pays all operating costs)?
- Ask questions about exclusivity—can you negotiate a “category exclusive” for the building or center, meaning you will be the only business of your type?
- Get all the traffic numbers. A good commercial agent will have car counts and demographic information for the target around the locations.
- Negotiate move-in concessions (free rent, discounted first year, etc.) Think long- term and negotiate your options up front.
Last, look at the image of the location. Is this the right image for your second location? Who are your neighbors? Would any be considered competitors or are they complementary? Just as you did in your first location, make a long visit, sit in your car, and observe what the neighborhood is like, and whether it’s a good fit.
Maria Valdez Haubrich is Chief Liaison Officer of GrowBiz Media (growbizmedia.com), a content and consulting company that provides information, advice, and resources to help entrepreneurs start and grow their businesses.