Location, Location, Location: The Key for a Good Franchising Business.

Before you start looking for starting your business decide what kind of business you are looking to invest and what kind of space is required for it to run, you need to have a clear picture of what you must have, what you’d like to have, what you absolutely won’t tolerate and how much you’re able to pay for the space. This can be a time-consuming process that’s both exciting and tedious, but it’s essential you give it the attention it deserves to avoid any mistake in identifying the best location for the business. For your business to run well as we say in the retail jargon it’s always “Location, Location, Location” If the location is the best, then half of the marketing is done. A poor choice of location is sometimes impossible to repair.

Be systematic and realistic as you consider the following 10 location points.

1. Decide what kind of operation are you getting involved.

Is your operation going to be formal and elegant? Or kicked-back and casual? Your location should be consistent with your particular style and image. If your business is retailing, do you want a traditional store, or would you like to try operating from a kiosk (or booth) in a mall or a cart that you can move to various locations? Based on all these questions you need to choose the right location of the business which is very important.

2. Demographics & Catchment Area:

2 important things that you need to look at when you decide the demographics. First, consider who your customers are and how important their proximity to your location is. For a retailer and some service providers, this is critical; for other types of businesses, it might not be as important. The demographic profile you have of your target market will help you make this decision. For example if you are looking at starting a retail store like a saloon , grocery store, mobile store, restaurant or clothing centre people like to just walk in pick up stuff and leave. But look at a study centre, a computer centre or a repair centre you will find them above the first or second floor people don’t mind climbing up to do business.

Then take a look at the catchment area. If your customer base is local, does a sufficient percentage of that population match your customer profile to support your business? Does the catchment area have a stable economic base that will provide a healthy environment for your business? Be cautious when considering catchment area that are largely dependent on a particular industry for their economy; a downturn could be bad for business.

Now think about your work force. What skills do you need, and are people with those talents available? Does the catchment area have the resources to serve their needs? Is there sufficient housing in the appropriate price range? Will your employees find the schools, recreational opportunities, culture, and other aspects of the catchment area satisfactory? Let me give you some example to this. If you look at most of the automobile companies set up their shops in Chennai and Pune, one of the reason being they get good quality engineers and there they find people with good CAD skills. The reason being CADD Centre which trains students on the CAD software has many centres in the country and the demand vs supply of staff is quite good. The same way if you look at the foundries you will find them in Coimbatore, the mills are in Erode. These kinds of assessments are good enough for us to set shops.

3. Look for good foot fall.

For most retail businesses, foot fall is extremely important. You don’t want to be tucked away in a corner where shoppers are likely to bypass you, and even the best retail areas have dead spots. By contrast, if your business requires confidentiality, you may not want to be located in a high-traffic area. Monitor the traffic outside a potential location at different times of the day and on different days of the week to make sure the volume of pedestrian traffic meets your needs. For example for educational centres it should be close to some colleges or where the society lives.

4. Accessibility and parking.

Consider the accessibility and the facility that will be for all the stake holders who’ll be using it—customers, employees, and suppliers. If you’re on a busy street, how easy is it for cars to get in and out of your parking space? Is the facility accessible to people with disabilities? What sort of deliveries are you likely to receive, and will your suppliers be able to easily and efficiently get materials to your business? Trucking companies need adequate roads and loading docks if you’re going to be receiving freight or other materials.

Even if you have a beautiful office building at a great price is a lousy one if you do not have enough parking facilities. Be sure there’s ample convenient parking for both customers and employees. As with foot traffic, take the time to monitor the facility at various times and days to see how the demand for parking fluctuates, good lighting is important at the parking lots.

5. Put up the store near your competition:

Are competing companies located nearby? Sometimes that’s good, such as in industries where comparison shopping is popular. You may also catch the overflow from existing businesses, particularly if you’re located in a restaurant and entertainment area. But if a nearby competitor is only going to make your marketing job tougher, look elsewhere. For example if you see in those days of IT education being popular, you had all the IT educational companies in the same road, or opposite to each other or in the same area. Now if you look at all the saloons, the mobile companies, super markets and the retail clothing stores all of them pitch against each other because it gives the customer an option and saves time for the consumer. Whoever has a good range of products, price and great customer services will survive in the tough competitive market? It always a customer driven market no more a seller driven market. Customer is the King.

6. Proximity to other businesses and services.

Take a look at what other businesses and services are in the vicinity from two key perspectives. First, see if you can benefit from nearby businesses—by the customer traffic they generate—because those companies and their employees could become your customers, or because it may be convenient and efficient for you to be their customer.

7. Address Matters to Business.

What does this address say about your company? Particularly if you’re targeting a local market, be sure your location accurately reflects the image you want to project. It’s also a good idea to check out the history of the site. Consider how it’s evolved over the years.

Ask about previous tenants. If you’re opening a restaurant where the previous restaurants have failed at the same location, you may be starting off with an insurmountable handicap—either because there’s something wrong with the location or because the public will assume your business will go the way of the previous tenants. If several types of businesses have been there and failed, do some research to find out why—you need to confirm whether the problem was with the businesses or the location. That previous occupants have been wildly successful is certainly a good sign, but temper that with information on what type of businesses they were compared to yours. Example: You see such business in a mall in a particular location keeps closing, you might find that certain business fail because of neighbours that you have or because of certain businesses.

8. Ordinances, Zoning & Signage Display

Find out if any ordinances or zoning restrictions could affect your business in any way. Check for the specific location you’re considering as well as neighbouring properties—you probably don’t want a liquor store opening up next to your day-care centre or a ladies saloon.

The site should have a good frontage to display the signage according to the norms of the brand this will help on saving some marketing budget.

9. The building’s infrastructure.

Many older buildings don’t have the necessary infrastructure to support the high-tech needs of contemporary operations. Make sure the building has adequate electrical, air conditioning, and telecommunications service to meet your present and future needs. It’s a good idea to hire an independent engineer to check this out for you so you’re sure to have an objective evaluation.

10. Utilities and other costs.

Rent composes the major portion of your ongoing facilities expense, but consider extras such as utilities—they’re included in some leases but not in others. If they’re not included, ask the utility company for a summary of the previous year’s usage and billing for the site. Also find out what kind of security deposits the various utility providers require so you can develop an accurate move-in budget; however, you may not need a deposit if you have an established payment record with the company.

If you have to provide your own janitorial service, what will it cost? What are insurance rates for the area? Do you have to pay extra for parking? Consider all your location-related expenses, and factor them into your decision.


The author of this article is Dr.Chackochen Mathai,  Founder & CEO of Franchising Rightway with over 28+ years of experience in the field of franchising in India and abroad and has worked with major brands. He holds a Ph.D in Franchise Management. An author, family life educator and he is an invited speaker in many leading forums and Universities; he can be contacted at +919884051455 or visit www.franchisingrightway.com for more details.

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