Site Selection Checklist for Growing Retailers, Restaurant Chains, and Franchises
When you’re trying to grow your business through expansion, it’s essential to do so methodically and intentionally. You’ve probably heard before that even one bad location can prevent your retail business or other chain business from reaching its full growth potential—or worse, kill your business entirely. That’s why investing in site selection when you’re expanding is critical. But how do you approach the task diligently? Here’s a checklist to guide your site selection decision:
Know your customer.Site selection done right includes knowing your customer. This is easier, of course, if you have one or more successful locations established, but you can still research who you think should be or will be your customer. Make sure to analyze…
- Demographic data about your customers using current data sources
- Where your customers live, work and shop (and their spending patterns)
- What your customers are doing that leads them to your store/restaurant/business
- What the customers of your competition are doing that leads them to your competitors
Assess your trade area.By trade area, we mean the area within which businesses draw their customers. A great site where your customers aren’t is bound to fail. You need to evaluate whether your area has enough of your potential customers—both quality and quantity. Take the time to run a thorough trade area analysis, including supply and demand. Evaluate any shifts in population or demographic changes in your area too. You should narrow your potential sites by completing a “success profile” that allows you to contrast different sites that match your criteria.
Study your competition.This is especially important if you’re just starting out, but it’s essential even when you’re established. What businesses are most similar to yours (both in the area you’re researching and in other markets)? Who are their best customers and why? If your customers don’t come to your store or business, where else do they go? Remember to also pay attention to your competitive threats—every business has competition, after all. No matter how unique or great your business concept may be, you’re always going to be competing with other businesses for customers. And your competitors aren’t always who you think they are (e.g. as a grocery store, you might compete with restaurants that offer prepared meals).
Define your site criteria.Think about what you need in a site for it to be successful. If your business depends on foot traffic, make sure you stay away from “destination” sites that require driving to get to them. Think about the things that matter to your customers, like parking, convenience, ingress/egress, ambiance of an area, etc. A business with good cotenants that can build on their traffic will grow sales faster. And depending on what type of business you are, it might be worth paying for prime real estate in a busy shopping center rather than saving money on a low-traffic site in an inferior location.
Get the help of a broker.A knowledgeable broker can be an invaluable resource, especially in combination with a data-driven site selection toolset (more on that in a moment). They have local knowledge and insight about sites that you wouldn’t know. They’ll know what areas are hot and what might be declining. Ask the broker to help you find sites that match your criteria, which is a much more strategic approach than simply looking at the sites that are available.
Use a tool to help you.Site selection on your own is a daunting endeavor. Your best bet is to invest in a retail site selection software that can help you make intelligent decisions based on data, not gut feel. As you evaluate and select the best tool for your business, here are are a few things to look for:
- Experience – Look for a site location software that is built by professionals with experience in the retail real estate industry. The technology is important, of course, but the expertise of the individuals in the company that built the product is important.
- Good data – Ever heard the phrase “garbage in, garbage out?” It absolutely applies to site selection software. A tool like SiteSeer is powerful, but it is powered by data—your own internal data as well as demographic, psychographic, and other data. It’s important that with whatever platform you choose, you have access to many external sources and are not limited to the software company’s preferred vendor (which might not be the best for your needs).
- Depth of features – Make sure the site selection software you choose does everything you need it to do! Ideally, you should be able to visualize opportunities available on maps with your data and industry data, create trade areas based on radius or drive time and implement trade area rules, produce reports and site packets, run void analysis reports to identify retail tenants and create retail recruitment plans, search retail location’s trade area profiles, analyze customers, run retail sales forecasts, and build models.
Need help analyzing retail sites? SiteSeer can help. Contact us for a demo to learn how to boost your retail site selection practices and choose better locations.