I often get asked this question. What I have found is the most important factor is location. Too often I see business owners seeking to skimp on rent by being at the fringe of shopping strips and shopping centres, only to find themselves unable to attract enough traffic through the door. This must be done through caution as well. If the rent is too prohibitive, then, the business model will fail as well. There are some shopping strips around Melbourne that show this where 1 in 3 shops are vacant. It simply means that the rent is too high for a business owner to run a profitable business as landlords are seeking to recover a return on investment from the leaseholds that have been propelled by soaring property values. It’s catch 22 for the landlords as they are now without a tenant for a long time whilst they aim to re-tenant the place at a level that the investment makes sense.
The other thing that is paramount in retailing is the people at the shopfront. Whether it’s the business owners themselves or their entrusted employees, the vibe they create is the most crucial aspect of the buying experience and the likelihood of repeat traffic and referral potential.
The ambience, layout and quality of the fitout will determine the type of customers that will frequent the business, so, as this is an expensive part of the entire investment into that business. Getting it right from the beginning is essential. If you are after a particular target market, then, the look of the place has to match their expectations.
Lots to think about, but, it’s the combination of the above that will give you a great chance of success.
