A human resources and marketing graduate from Loyola University, Bruce Adreani is a real estate professional working in Park Ridge, Illinois. The president of Norwood Builders in Park Ridge, Bruce Adreani works with business owners to get them the best retail locations for their businesses.
As a business owner, there are many things you should consider before leasing a retail premise. The first is space. A good way of figuring out how much space you need is to estimate the revenue you could generate in a year and divide that by your industry’s sales per square foot. For example, if you think your store will generate $250,000 in annual sales and your industry’s average sales per square foot is $200, then you will need about 1,250 square feet of space.
However, be cautious with the sales figures you use. Many entrepreneurs overestimate their expected sales. It is better to refer to similar businesses in your area and average their sales to get a good estimate. Also, factor in non-selling space such as storage, bathrooms, and office areas. These areas will require extra space that may not be accounted for in the data.
Second, a good retail space is in a great location. This is a location that is zoned for the type of business you do, receives plenty of foot and automobile traffic, and has neighboring businesses that complement your own. Finding a good location should in fact be your top priority. A good one can contribute to revenue generation with minimal advertising. If it comes down to location over space, choose location.
Last, consider price. Rent will be your second biggest cost after inventory. In addition, many rents are triple nets meaning you will also have to pay taxes and common area maintenance for the percentage of the overall space you occupy. Get a space that you can afford. Don’t be tempted to move in to a large location only to incur additional inventory costs to make the store appear full. There is a danger in taking up more space than you actually need.
About Bruce Adreani 