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Have you Really Found the Right Location when Opening a Dollar Store? by Robert Hamilton
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Have you Really Found the Right Location when Opening a Dollar Store? |
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Business,Small Business
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Identifying the right location is one of the most critical and often most time consuming and frustrating pieces of the puzzle for those opening a dollar store. After examining many possibilities that just didn’t meet your needs, you’ve come to a space that does appear to offer everything you want. The demographics seem good, there’s lots of traffic going by, the space is just the right size, and you are sure you can generate lots of dollar store sales. Yet there are many questions to ask before making your final decision. There’s more research to be done as well. One of the often overlooked portions of the investigation is associated with previous tenants. Read on as I provide some of the most critical questions to ask about previous tenants. What type of business was in the location? If you are opening a dollar store it is helpful to know if previous businesses were complimentary to your dollar store business. If so, try to obtain sales information, as this may indicate potential dollar store sale levels for your business. Did they target the right demographic for your business? Really examine the previous businesses and how they compliment your dollar store. Look for a good match and then dig deep to see how they performed. Were the previous tenants successful? If previous businesses were similar to your dollar/discount store it is especially helpful to know they were successfully operated. This is an encouraging sign about potential dollar store sale levels, dollar store profits and the overall future of your business at that same location. Were previous businesses unsuccessful? If the previous businesses were similar to your dollar/discount store and they failed, there are many more questions to ask. Really work to gain an understanding of the circumstances associated with the previous tenant and their business. There are some very legitimate reasons for going out of business that do not diminish the potential of a location. Likewise there are others that become a big red flag to moving forward in your negotiations. Why did the previous tenants leave? If they moved because they outgrew the location that brings one set of follow-up questions. If, on the other hand, they left because of poor sales and the need to downsize or even terminate business, there is a whole new set of questions to be asked. Attempt to investigate businesses that operated in the space for the last 3 to 5 years. Ask the hard questions, and don’t stop investigating until you are comfortable you have a true picture of the recent history of the space. Don’t be surprised if it is difficult to obtain the answers. Just keep digging for information. If the answers come back very positive – for example all businesses moved into larger spaces because of their success – then keep asking questions. Determine the right steps for you to repeat to achieve that same success. If there is bad news in the answers you receive – for example, the businesses all failed – really examine what will make you different. You must be able to convince yourself and your advisors that your business will excel even though others failed. If you are opening a dollar store in a space that has a history of problems, be sure to negotiate hard. Don’t over-pay. Look to create an escape clause. Look for help as you first start your business and if dollar store sales don’t meet projections. And be sure you have a solid business plan that incorporates specific actions to overcome the history of the location. To your success when opening a dollar store! Want the best ideas to earn from your dollar store business? Check out "Tactics to Add Streams of Income to Your Dollar Store Business" at www.OpeningADollarStore.com.
Bob Hamilton is an entrepreneur, author, writer, business consultant and trainer.
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