Small Businesses Deserve Better
Choosing the right site is the most important aspect of opening a retail business, yet very few small retail business owners have access to the expertise that will help them properly analyze a site. They entrust the success of their business to their own instincts or the advice of an unqualified commercial real estate broker.
Commercial brokers, by and large, have varying degrees of the expertise necessary to help a business owner analyze a trade area for a retail client. For the most part, commercial real estate brokers barely skim the surface when it comes to site analysis. Sometimes the broker’s motivation is to simply fill a vacancy in one of his or her listed shopping centers. The broker may supply the client with a set of demographics, usually for a one, two or three mile radius, and possibly with a map showing the locations of existing shopping centers and the client’s primary competitors. This supporting data does very little to help the small business owner assess the strengths and weaknesses of a particular site. Therefore small business owners are making critical site decisions with incomplete data.
I have been conducting real estate site analysis for national corporations such as McDonald’s, Arby’s, and Econo Lube N’ Tune, Inc. for more than 30 years. These corporations know that picking the right site is critical to the success of their business. In fact, McDonald’s Management believes site selection is the single most expensive decision they make on a regular basis. They understand a mistake in selecting their site could cost the company millions of dollars over a twenty year licensing term, and the last thing they want is to deal with an irate store operator for that period. If McDonald’s does make a mistake and chooses the wrong site, it has the ability to absorb the loss because it has many other highly profitable units to offset the poor selection. However, for the small business owner with only one or two locations, a mistake could lead to financial ruin. I like to help the small business owner reduce the risk of picking a poor location.
I have a lot of respect for the small business owner who oftentimes will put his or her life savings on the line in order to start a business. With my expertise we will:
Establish who the customer is and where will they be coming from.
Define the trade area and I guarantee you it won’t a one, two or three mile radius! By and large, the professional site selectors define their trade area in drive times, not radii.
Analyze the key components that drive sales and what each component could mean to the business. These components are residential population, local employment and the strength of shopping centers within the trade area. For a typical fast food restaurant, these three components, on average, will amount to 80% of their business. The percentages may be different for other retail businesses but together we’ll work to figure that out.
Evaluate other activity generators that might drive sales such as traffic, schools, parks and recreation, etc.
Conduct a gap analysis to find the strongest trade area for the new business.
At Three Peaks Analytics we feel that the small business owner deserves better. Our high level of expertise means that we can promise a higher level of service than most other commercial brokerage companies. If you are looking to open a new business or relocate your existing business, give us a ring. We’d love to help you!