Business Coach: Insights on Retail Location Hunting

(Originally published on July 31, 2011; reprints previous original material published in this section)

By Ruben Anlacan Jr.

I recently wrote an article (archived at on how to look for a good retail location, but due to space constraints there were many vital considerations that were not discussed.

For the benefit of those who want to know more about choosing a retail location, we will go deeper into the other factors:

• Know what type of goods you are selling. While location is a vital element in any retail establishment, its degree of importance depends on the type of goods sold. Convenience items like groceries need to be very accessible since buyers are unlikely to travel far to buy these type of goods. On the other hand, “shopping” type of goods like clothing and furniture are usually canvassed and compared so people may spend more time and effort looking for the items.

• Pick the far corner lot. We all know that a corner lot is more desirable than an inside lot because it is more visible and has more frontage, but since there are four corners in an intersection you must know which corner is the most desirable. Generally, it is the corner to the right after crossing the intersection that is more attractive. This concept is crucial to apply if your store is relying on vehicular traffic for a significant portion of your sales.

• Know what the past tenant was paying. Even if you know the going rental rate for a location, it is a good idea to find out what the former tenant was paying. If it turns out that the last tenant was paying far below the going rate, you could use that fact in negotiating for your rental. It would not hurt your bargaining position and you may get lucky especially if the landlord is in a hurry to have the place rented.

• Know if the franchisor wants to get the site for himself/herself. If after submitting your proposed site to a franchisor you receive rejection in a couple of days, then you must worry if the franchisor is after your site. It is highly unlikely that the franchisor had already properly assessed your site in the span of two days.

• The role of frontage. All retails stores will benefit from a larger frontage, but a counter type operation will need a bigger frontage than a self-service operation. In a counter type retail store, it is more advantageous to double the frontage than to double the store area.

• Store size in itself is a traffic magnet. Consumers believe that the larger the store the better assortment it has and the more reliable it is. We learned this the hard way when we drastically reduced the floor area of a drugstore branch to save on rental. However, after one year, while we did not reduce our inventory, sales fell by almost half.

• Study census data. This information can be gathered from the National Statistics Office (NSO). Find out the population, income and other data in your location that may help you have a better idea of your market.

• Use Google Maps. This is a website by Google wherein you can get an actual satellite view of your site. Previously, only large companies could get an aerial view by hiring a helicopter or plane. Much of what they obtained at a prohibitive cost then you can now get for free. There are so many things you can learn from studying your potential location in Google maps. You can see both customer generators, obstacles and other useful data that you may miss on foot.

• Check if there are zoning problems. Do not be complacent just because the previous tenant or owner of the site was able to operate the same business, they may have clout with the local authorities or their operation was tolerated because it has been there for a long time.

• Factor in the cost of renovation. Often you will find a location that seems amazingly cheap, but it is just an unfinished shell. The cost of fixing and furnishing the place may greatly exceed the savings from the lower rent. Furthermore, there may be some specifications (like the need to use tempered glass) that you must comply with that will jack up your projected budget.

• Walk around the property in all the different locations. Allocate several days to walking around your prospective site. This will allow you to have a better feel for the place and you will learn many things that will not show up in a market research report.

• Ask people that may be in position to know about the site. Be resourceful and interview suppliers of the past tenant. Strike a conversation with people who see the place everyday, like the sales clerks in the adjoining store, and ask about the number of people patronizing the place. One very successful food entrepreneur even interviewed a garbage collector of a restaurant to gauge how strong their sales were!

• Make sure you are signing up with the owner of the site or his/her authorized representative. Ask around the neighborhood to verify ownership. You can even check with the register of deeds in city hall to confirm that you are dealing with the right party.

Do not be too shy to ask for the proper identification since you will be giving out a substantial amount of money.

Location is the most important decision in most retails stores because reversing a mistake is extremely costly or impossible. Spending more time and effort to choose the best location must not be considered an expense, but instead view it as an investment with a very high rate of return.


Business and management consultant Ruben Anlacan, Jr. is the president of BusinessCoach, Inc. and a resource speaker for various business topics. He discusses overviews and tips for business from the point of view of a small or medium-scale entrepreneur who has started several successful enterprises. Those who wish to ask questions or to make comments may visit or e-mail

(All rights reserved. Copyright Manila Bulletin. May not be reproduced or copied without express written permission of the copyright holders.)


Posted on September 15, 2011, in Business Agenda Classifieds Columns, BusinessCoach and tagged , , , , , , , . Bookmark the permalink. Leave a comment.

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