2013

Location, Lease, and Luck: Proper Prior Planning will Yield the Best Deals! Analyzing your location and customers

Header_Tip7

From Tip 1 – We created your Brand Experience

From Tip 2 – We learned about your Customers

From Tip 3 – We explored your identity

From Tip 4 – We created your Space

From Tip 5 – We created your Physical Space

From Tip 6 – We created your Business Plan

Now that you have your business and marketing plans complete, as well as your brand, space plans, and research data regarding your new café (See previous Tips 1-6), you can start your search for the perfect location!

Your location is the physical creation of your experience. The exterior, the pedestrian entry experience of walking, busing, or driving to the space, as well as the architectural character and details, are all important physical features. In addition, co-tenancy to like-minded businesses is very important to analyze.

The following are key important areas to consider and ask your broker and consultants when looking for a space:
•    Analyze your business hours and co-tenancy:
•    Co-tenancy is an important consideration in the amount of customer traffic to your location. Having other uses around you with similar busy hours, can drive additional customers to your location.
•    Morning Hours – If morning hours are projected to be your busiest time of day, consider the direction of the morning commute – autos, buses, and neighborhoods with commuters.
•    Lunch Hours – If lunch is your thing, consider being located in an area with a heavy business, college, or other lunch time customer base.
•    Happy Hour and Evening Hours – If you include wine or beer on your menu, or heavier evening or happy hours food items, consider being located in areas with a customer base looking for a casual after work drink and bite to eat. Areas that have a higher density of residences work well in addition to college locations. Family focused customers can also work for these locations, due to families looking to grab a simple meal on the way home from work or kid activities. Having the ability to have outdoor or patio seating may be an important feature with an evening oriented location.

•    Determine the infrastructure you need inside your space to accommodate your menu.
•    Any items with “grease laden fumes” or open burners in general will require a Class I hood. This means any fried foods or griddles. Working with a consultant that is familiar with the latest equipment will save you time and dollars in the long run on your lease.

•    Tenant Improvements, Allowances, and Lease Start:
•    The amount of tenant improvements (or the amount of money that a landlord will provide to build out your space) can vary with markets. Ask the landlord to pay for all core and shell expenses. This includes all mechanical, electrical, plumbing, restrooms, and a hood shaft.
•    Ask for Free Rent – Always ask for free rent (i.e. 1 month per lease year for at least a 3 year lease). Remember to start your free rent AFTER you are open and occupied according to the permitting agencies. Project your permitting and construction time conservatively and do not pay rent BEFORE you are occupying the space.

•    Lease Rates – Typically retail or café spaces will be a NNN (triple net lease). The NNN expenses are additional to your rent, i.e. if the rent quoted is $25/SF NNN, you may be paying an additional $7.00/SF for expenses – which totals $32/SF. So when comparing space lease rates, be sure to compare all expenses.

•    Is a brick and mortar OR drive thru kiosk or “container” space the right decision for your first location?
•    Consider the surge of drive-thru stands, kiosks, food trucks, and shipping “containers” (Dynamik is creating new shipping container concepts with a new division.) The consumer is more accustomed to visiting unique locations.
•    The start-up costs are less than a brick and mortar space and potentially less space or lease commitment. Consider this if you are launching your first location OR if you are unsure of your second location and want to test markets.

•    Architectural Character – This item is often overlooked and depending on location is very important. The age, history, façade, materials, operable windows, and other characteristics can provide the warmth and welcoming exterior and interior that will drive people to your location vs. a stark and cold modern location which may be more desirable.

Working with a team of design consultants is key to assessing location options. Planning ahead can save time and money – and yield a wonderful location. Our 10 Tips Jumpstart pocket books provide more useful tips http://www.dynamikspace.com/store.php5

Stay tuned every month for valuable tips. Melanie Corey-Ferrini is the founder of Dynamikspace (www.dynamikspace.com) and offers services from consulting to full service café creation.

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