Dig Deeper: Why Demographics Are Crucial to Your Business
How to Pick a Site for Your Business: Hone In on a Property
Traffic counts. When you are considering a location, it's not just the number of passing cars that matters; it's also where they are headed. "If you're a breakfast place, for instance, you want to be on the side of the road that heads toward the urban center," says Andy Fried, a consultant at the Kennesaw State University Small Business Development Center and a commercial landlord. And if you are a dinner place, you want to be on the opposite side. Get detailed traffic-pattern information from your state department of transportation.
Avoid roadblocks. Study the roads around and leading into a prospective site -- you want ingress and egress for the site to be as painless as possible. A nearby traffic light is ideal; divided roads without a nearby light can be deadly. So can dead-end and one-way streets.
Hitch your wagon to others. A retailer, says Fried, will benefit greatly from locating in a center with a popular anchor. After all, as Harper notes, "the big guys -- Target, Wal-Mart -- have whole teams that research this sort of thing." If you can't match their effort, you can at least borrow from it. Some experts recommend locating close to your largest competitors simply to piggyback on their marketing efforts.
Similarly, locating near other stores that market to the same consumer, even if they sell different products, helps all the businesses draw those customers in.
Dig Deeper: What's In a Location?
How to Pick a Site for Your Business: Credits and Contracts
States and localities often offer abatements and incentives to build in certain -- often struggling -- communities. For information on those incentives, check your local Small Business Development Center. The federal government also wants to encourage investment in those neighborhoods. Here are several inducements:
Empowerment Zones and Renewal Communities: These programs provide tax credits for businesses that locate in any of the more than 80 specially designated distressed communities.
The tax incentives include credits for employing residents, enhanced deductions for expenses, opportunities to take advantage of tax-exempt bonds, and special treatment for capital gains. These incentives are scheduled to expire at the end of 2009, but efforts are under way in Congress to renew them. Thumbnail guides are available at HUD's Office of Economic Development webpage (www.hud.gov/offices/cpd/economicdevelopment).
HUBZones: This program, administered by the Small Business Administration, provides federal contracting opportunities for businesses in so-called historically underutilized business zones. These are areas that suffer from especially high unemployment rates or low household income. (There is some overlap between HUBZones and Renewal Communities and Empowerment Zones.) Besides locating in a HUBZone, a qualifying company must hire residents of the zone. Under the program, an agency that awards contracts must attempt to award 3 percent of contracting dollars to HUBZone firms. These can include sole-source contracts of up to $3 million or $5 million for manufacturing industries. Learn more at sba.gov/hubzone.
Dig Deeper: Dealing with Zoning Problems
How to Pick a Site for Your Business: Looking for Parking
Typically, a commercial lease will specify, at a minimum, a certain number of reserved parking spaces per some amount of square feet (at strip centers, these could be the spaces immediately in front of the store) and perhaps unreserved spaces as well. But, as Obie Greenleaf Jr., a broker and director of the Small Business Development Center in Cedar Hill, Texas, points out, when it comes to parking, "there's never enough."
A high-volume business, such as a restaurant, needs more parking spaces than, say, a specialty retailer. Take note of your prospective neighbors and their needs. Andy Fried, the business consultant and landlord, describes a local Panera Bread that didn't. "You go in there during lunchtime, and it's nearly empty because there's no parking!" he says. "I know people who want to eat there, but they can't find a place to park, so they go somewhere else."
Dig Deeper: What a Site Evaluation Form Looks Like
