How to choose a location for your shop

When choosing a location for a shop people very often make the same mistakes. Even though they have heard some tips or got some advice on how the location of their shop is very important, they still can’t make the most of it because they don’t completely understand it. Any advice is good, but it is only of value to you when you can apply it to your situation and know how to.

Someone can advise you to open a shop in the city centre because that is where the most people circulate every day and it’s not only the place where you will get the most traffic flow, but where you have most chances for success. If you can’t succeed there, where can you, right? No, not really. If you do that, your business can still fail miserably. I’m sure you’ve passed by a lot of shops in the city center in your life that weren’t relocated, but closed. But you have never really thought about them this way, haven’t you?

So, how do you choose a location for your shop?

Definitely go for a location where you can benefit from the existing traffic. There is a difference between random traffic and targeted traffic, though. If you are opening a boutique, it would be smart to you choose a street where there is already a lot of traffic attracted by another popular fashion store with a similar clientelle you are looking for. The key here is targeted traffic or “similar clientelle”. You have no use of thousands of people that pass by your shop, but who have no interest in what you are offering.

I think I have written already about a couple that opened an exclusive chocolate shop near a ferryboat dock just because they thought they couldn’t go wrong with the number of people that passed by every day. And that is exactly what happened, people passed by. Business was really slow and they didn’t understand what went wrong. It was the wrong location, the wrong clientelle and a few less obvious reasons.

Have you noticed how some businesses always seem to stick together, like cafes and restaurants? You can find streets with only cafes and restaurants in any city in Italy, you can find them in Amsterdam and many other places. The most important thing is to know what kind of a business you have and then detect those places that are right for it. Look at other micro businesses that are like yours and see what they are doing. You can always learn a lot from examples in your area.

Look from what type of existing traffic you can benefit, not just the numbers. Is it about luxury goods, is it about organic food or delicacy, is it about fashion for men… Why?

Let’s use a male fashion customer as an example. The fashion market for men and women is different because men and women shop for clothes differently. Fashion for women is a lot faster in inovation and styles which results in a lot more choices. Men are more loyal and constant customers. If they like something from a brand they have just found, the will keep comming back and buying from them for a long time. So when you want to open a shop with men’s clothes that represent high quality in materials and fabrication, that are casual and elegant, you can already imagine the type of a client that would be. If you can open a shop in the street where another well known designer is attracting that kind of clientelle, you can benefit from their traffic.

But that is not the only way you can benefit from existing targeted traffic. Some micro businesses find their place in specific areas, others just make an integral part of any neighbourhood. I’ve talked about this in the manifesto I wrote; since more and more people are leaving their jobs every year and striving to create more freedom, lead a less stressful life, we are starting more small businesses and returning to a vital small communities inside our cities. It was once a common thing that neighbourhoods had their architecture sudios. Now, you can rarely find an architect that works locally; they usually work on projects in other cities and internationally. We are not as close to having an architecture studio in each neighbourhood, but some micro businesses are again very welcome and necessary.

A more common type of neighbourhoods you can see forming (in the last 10 years) are those that gather small businesses of similar areas of experise. What brings similar people together are usually the things that make a certain neighbourhood attractive, like nature, architecture or proximity to something. That is why you can find people with same interests choosing the same neighbourhoods. You can find neighbourhoods that through years became oriented toward design by the noumerous studios that opened there, or marketing and advertising firms, companies related to film industry, etc. This is happening everywhere; Germany, Finland, even in Zagreb, where a newly built business area attracted many high quality restaurants and clubs.

Also, have in mind that you won’t only benefit from the traffic that already exists in the area you are about to set up your shop in, or from some of your competitors, you will be able to benefit from their marketing efforts, too.

You never want to rent a space where no one will find you or where you will have to deliberately attract the right kind of customers from the first to the last. This means that you can create the best micro business in the world, but if there is no one to see it who matters to you, you won’t succeed, or survive.

There is a catch, though, with using the existing traffic and setting up your shop door to door with a similar micro business. You should never aim for that area if you are about to open a business with the exact same philosophy, exactly the same customer profile or the same services delivered in exactly the same way. Don’t do the same thing, e.g. don’t open a photography studio exactly like the one that already exists on the same street. Not even a slightly different. Someone is going to go out of business. A photography studio is probably a business that should follow “by the neighbourhood” instructions. But since all of you guys have different visions and great ideas for your micro businesses, and come here for inspiration and information, I doubt this is something that you find confusing.

Business is as much about your lifestyle as it is about your customer’s. When it comes to brick and mortar businesses and their location, that is especially what makes a strong factor. Get into the mind of your customer same as your did into yours when you were creating an idea for your micro business. Your location, same as your business, needs to coincide with your customer’s lifestyle. You can draw some new conslusion by just thinking about who your customers is. Where does she go on a daily basis, what does she do for living, what are here interests, what does she value the most?

There is no universal answer when it comes to choosing a location for a shop. Every business is unique even if you consider two shops selling high price sound systems.

All businesses are looking for the “perfect customer”, not just any random customer. Once you add all of the important factors in your business together, done the right way, you should be getting as many of those kind of customers there are, but location is the one that plays a huge role every time.


photo courtesy drewleavy

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