Key Considerations For Selecting A Business Site
Strategies For Finding The Best Site At The Lowest Price
In essence, it is this simple, but these are goals, not the strategy or tactics that will help realize the objective. A decision made without a plan in place can lead to results based on emotion and convenience, which doesn’t often lead to the intended outcome.
Think of it like a Kit Kat or taquito at 7-Eleven — they are tempting, available and will certainly satisfy the initial desire, but it’s probably not the best idea if you had to stick with that choice every day for three, five or 20 years as you might with a location decision.
If you have to stick with a choice for a long period of time or spend several hundred thousand dollars rather than 99 cents, it’s important to employ a systematic approach. If you use the five components outlined below as a basis, it is a good start.
It’s Just Pavement, Paint … And Money
Often, parking is one of the most overlooked components of site selection. Attention is largely focused on ensuring the building fits the criteria, the location is what you had in mind and the price fits your budget — it’s easy to overlook some pavement and paint as the decision is being made.
It’s unfortunate that such a simple oversight has the potential to cause so much pain, but a lack of parking can inhibit growth as much as a lack of interior space. Consider parking spaces the beginning of the sales process and value them accordingly.
It doesn’t require citing a study to suggest customers want to park as close as possible, but research has demonstrated that outside of a pedestrian-friendly environment, consumers generally only give consideration to parking spaces within 100 feet and those more than 300 feet away might as well be 30,000 feet away.
If you are operating a restaurant, the rule of thumb is 15 to 20 spaces per 1,000 square feet and retail generally requires five spaces per 1,000 square feet.
It’s Not Just A Number
Traffic counts are relatively easy to find and even easier to misinterpret.
Harrisonburg’s East Market Street has approximately 30,000 vehicles traveling on it every day, Port Republic Road has 24,000 (and growing) and South Main Street has as much as 20,000.
Unfortunately, the best site isn’t always the one with the highest traffic count. Special consideration should be given to the quality of traffic on the road.
Who is it, exactly, that is driving by in those 20,000 to 30,000 vehicles and are they your customers? Where are the trips originating and what is their destination? How fast are cars traveling past your site? Can they easily get to your site at the time you want them to?
A breakfast joint on the side of the road that is busiest when people are going home in the evening isn’t ideal.
It’s also worth asking if you need high traffic counts because, as you can imagine, they cost more than sites with low traffic counts.
Retailers, fast food and fast casual restaurants, gas stations and pharmacies generally occupy the most heavily trafficked roads, and they are willing to pay a premium for the privilege (think East Market, Port Republic).
Banks, casual dining and the like occupy roads with slightly lower counts (think University Boulevard). Office users, suppliers and service providers typically occupy relatively low traffic count sites.
You’ll pay for what you get, so determine what you really need.
Out Of Sight, Out Of Mind
Determining the criteria outlined is somewhat subjective. Visibility is not — the site either has it or it doesn’t. For many businesses, a lack of visibility is comparable to a lack of existence.
The key to assessing visibility is defining visibility. This is generally accomplished by measuring distance and timing. The greater the distance a building is from the primary road, the less visible it will be.
Of course, there is a minor exclusion for major retailers that have built brand awareness with large-scale marketing campaigns, but you’ll generally note that even with all the smaller stores and restaurants surrounding, their façade and freestanding signage is prominently displayed as vehicles enter.
Timing is simply how long the site is visible. Storefronts and signage that can be seen from greater distances and subsequently for a longer period have a greater chance of success. Take a stopwatch (or smartphone) to your site visit and be careful of sites that set higher or lower than the grade of the road, are blocked by trees, or are extremely bland as they are much easier to overlook.
What Activity Is Being Generated, When?
Have you ever noticed that nearly every Food Lion shopping center has virtually the same tenants? A small restaurant or two, a nail and hair salon, a bank or fast food restaurant out front, and one or two local retailers.
It’s not random. Generally, the activities of one generate traffic for others. You don’t need to locate in a shopping center to benefit from this type of clustering, but you do need to monitor activity levels.
Make multiple site visits at different times of the day to determine that traffic timing and consumer demographics are beneficial to your business.
If you’re operating a retail store open from 9 to 5 with only bars neighboring you, it may not be a good fit. Likewise, a series of empty parking lots surrounding a potential restaurant site is not a great idea.
Pharmacies, grocery stores, libraries and restaurants are examples of excellent traffic generators and each one produces high levels of traffic at different times.
Just One More Thing
Remember Columbo? He was the unassuming and seemingly absentminded detective able to disassemble, reconstruct and solve murder cases. The formula for his success was always the same: eliminate assumptions, employ meticulous attention to detail and stay persistent.
The same formula should be applied to reviewing site access.
It is worthwhile to walk around the site with an aerial image and a pen. Document the entrance/exit points, traffic lights, turning access and flow of traffic on- and off-site.
If traffic backs up to one of the entrance points, mark it with a red flag because it impedes access to your business. If it stacks to your only entrance, you might consider disqualifying the site.
Pay particular attention to the presence of medians on the primary road. A median without an easy way to cross can effectively cut the traffic count in half — and reduced traffic generally equates to reduced sales.
Tim Reamer provides commercial real estate brokerage and consulting services with Cottonwood Commercial and specializes in investment property (multifamily/commercial/NNN), retail/restaurant site selection, and commercial buyer/tenant representation. Learn more at www.timreamer.com.