Finding the perfect retail space for your company can be a tough challenge depending on the nature of your business. You want to be sure the place reflects the essence of your brand, that it is welcoming to customers and that it’s overall a comfortable retail space in which to run your company.
That said, how do you find a great retail space to lease? It may not happen overnight—in fact, it can take several months to narrow down the best location for your store. So, you must be patient during this process to avoid making any hasty decisions.
Also, you should consult with commercial property experts when searching for retail space. That is to say, working with a real estate attorney and/or a broker can help facilitate the process while ensuring that you’re legally protected.
Here are some of the keys to choosing the right space for your retail business.
1. Understand Your Customer
“Before you do anything else, learn all you can about your customer. Who will need or want your product? Consider things like age, gender, income, interests, level of education, family situation, shopping habits, and any other specific details that comprise your target customer. Using this information, determine where your target customer is most likely to shop. That is your ideal spot.”
Source: Tri-Land Properties
2. Determine Your Budget
“It’s helpful to start with knowing what you can afford. Determining your budget will narrow your choices and prevent you from making impulse decisions if you fall in love with a space. The maximum percentage a business should allocate to their lease payment differs depending on the industry. Typically, however, retailers should expect to allocate between 5% and 10% of monthly gross sales to their lease payment.
Set a conservative budget: Be conservative when setting your lease budget because you’ll likely need extra cash on hand to run your business day to day and pay for unexpected expenses.”
Source: Fit Small Business
3. Start Looking Early
“Start early so you are not making stressful decisions. New retail businesses or franchises should start at least 4-6 months before your ideal opening date. In some cases, a landlord will hold a space for you for a few months. You will need plenty of time to find the right space, negotiate and build out the storefront.”
Source: Austin Tenant Advisors
4. Tour Locations
“After you reach out to the landlord, schedule a tour. It’s best to bring any stakeholders to the meeting. For example, touring with your contractor can save time and costs during the construction process.
Take some time to sit outside the prospective space and observe the traffic. It’s ideal if you can monitor the area on different days and times of the week. Do you see your target customer?”
5. Ask the Right Questions
“There are a number of things left open in a lease when you start out, which need to be clarified both by the tenant and the landlord. Many of these won’t come up unless you ask – such as rent-free periods, which landlords will often offer in order to get a tenant in. Remember that nothing is set in stone; if a landlord offers you a standardized contract, you can always negotiate.”
6. Check the Square Footage Yourself
“Space measurements can get out of date easily, as each commercial tenant tends to change the space to suit their needs. You’re renting the usable space, and that square footage may have shrunk significantly. It’s also not entirely unusual for landlords to include in the square footage parts of the common area of a building or to simply inflate the square footage.
The exact square footage is important because commercial rent is paid by the square foot. You don’t want to be paying for square feet you can’t use. Measure the space yourself and if it comes up as smaller than what the landlord is claiming, you’ve got yourself a discount on rent.”
Source: Vend Limited