Today’s post is about that all important decision on the part of a retail business owner, where to hang the shingle.  It’s one that has such far reaching consequences and I’ve seen struggles that have resulted in making a poor decision. Location by itself isn’t the whole issue however. The location needs to fit within the overall approach of the business.


There are two basic options.  One is to locate in a high traffic space and rely on that traffic to develop into a customer base.  The second option is to choose a location that doesn’t deliver traffic; the retail business sets out to bring their own traffic and become a destination store.  Think of this dichotomy as opposite ends of a continuum with high rent at one end and high marketing costs at the other.


Option one, high traffic locations must be chosen with care.  Is the traffic desirable?  If you are locating a craft store, do you want to be locate in a fashion mall?  The two aren’t mutually exclusive but they also aren’t complimentary.  The primary advantage of this option is that a well run retail business can get up and running more quickly if it captures the wallets of the people that make up the existing traffic.  The disadvantages are that the retail store is at the mercy of changes in traffic patterns and if the economy slows the rent remains high.  Another common mistake is assuming that by paying for the traffic, that nothing else needs to be done.  This issue will be addressed in future posts.


Option two, becoming a destination and marketing to bring traffic to your business takes longer, and in some cases takes too long.  I have seen businesses fail, waiting for the business to come.  The classic in this regard is the business that the owner is passionate about but is started on a shoe string.  The owner chooses the cheapest space they can find, due to inexperience they don’t do a very good job of merchandising, make use of hand made signage and has no money left for marketing.


One of my favorite examples of a business that is out of the way but very successful is the Salt Lick BBQ in Driftwood Texas.  In 2004 Driftwood had an estimated population of 21.  Over the years the population has never exceeded 0ne-hundred.  I’ve had the pleasure of dining here.  The Salt Lick has a seating capacity of 150 (keep in mind the population of the town) and on a Friday night, even with a reservation, and it took our group over an hour to get a table.  It was worth the wait.  Patrons wait in the garden.  This is a dry county, so the restaurant isn’t making customers wait just to sell alcohol.  The restaurant is so popular that they have parking lot attendants directing traffic.  The food is excellent and patrons can choose to eat “family style.”  The food is served in bowls, a bowl of potatoes, a bowl of beans, a platter of meat, and when one is emptied, staff bring another.  It’s a pleasant way to dine.

You need to do some serious planning before you decide on your location.  Don’t decide on the cheapest space you can find unless you are prepared to do some serious work on delighting customers and great marketing.

Leave a Reply

Your email address will not be published. Required fields are marked *