22 Jun Top 5 Mistakes To Avoid When Looking For A Retail Site
Site selection is the corner stone to the success of any retail business, and if there is one thing I can guarantee, it’s that you’re going to get some wrong. The skill is ensuring you minimise these mistakes and develop strategies and processes to avoid future ones.
There is a science to site selection, and that process should take the business on a journey that ends in either yes or no. To achieve this, here are the top 5 mistakes to avoid when looking for a retail site.
1. No Growth Strategy
At the start, mistakes get made when looking at sites on a purely opportunistic basis. The end result can be a geographically sparse network, with varying demographics and ultimately a mix of great, average and loss making stores that cost a lot to service both in man power and product supply. Document your growth and stick to it. If you can give it the time at the start you know it has logic and intelligence.
2. Lack of Due Diligence
What retailers are around the potential store? What are they paying? What are they turning over? What’s the traffic? What’s the demographic? Is the demographic changing? All these questions need to be answered and many more before a decision can be made.
3. Lack of Special Conditions
In so many lease negotiations the landlord has minimal understanding of the services that are being provided to the site. It is imperative a very clear special conditions report is provided to eliminate any doubt around your requirements, and you don’t end up paying for a $7000 hording.
4. No Internal Sign Off
In any negotiation for future stores there is always back and forth. To give clarity to the deal, a detailed sign off pack must be used. This pack must include all data and specifications with final version of the deal.
5. Operational Team Input
In some cases mistakes are made when the operations team don’t ever get to look at the site only to find out if there’s some significant design criteria that cannot be met, or they just don’t like the site. When this happens it’s all over before it begins.
Finding sites for any retailer is probably one of the most exciting parts of the business. Going through the process from finding sites to opening the store is always exciting, nerve racking and hopefully very profitable. If the site doesn’t work the blame game soon starts. To minimise and hopefully eliminate opening under performing or loss making stores it is imperative to be diligent about your processes and strategy whilst avoiding the above mistakes.
Jon Sully is the Director of BDC and has over 20 years’ experience in retail, franchising and property. Jon was co-owner of one of Australia’s largest and most successful retail food chains, Michel’s Patisserie. He has extensive operations and store development experience as an owner of multiple brands.