In this 10 part series, we are going to pull back the curtain and take you behind the scenes as we started our wine and liquor store. We recommend starting at the beginning. Some of this information will be specific to our store and New York State, but we will try to keep most of the information general to apply to a variety of brick and mortar stores. If you have any questions, please leave them in the comments and we will do our best to answer.
>> Introduction – 10 Part Series: How to Start Your Own Business
>> Part 1 – Find Your Desire: Why Do You Want to Open a Store?
>> Part 2 – Research the Market: Will it Support Your Product or Service?
>>>> Part 3 – Finding the Ideal Location (You Are Here)
>> Part 4 – Get Required Licenses
>> Part 5 – Prepare the Location
>> Part 6 – Waiting for Licenses
>> Part 7 – Getting Approved
>> Part 8 – Final Preparations
>> Part 9 – Grand Opening
>> Part 10 – 1 Year Review: A Look Back
After doing the research, we made the decision to move forward with the business. But that was only the beginning. At this point the business was nothing more than a 10 page plan. We need to now figure out an ideal location that would work.
Research Available Locations
Tom took a drive down to the area where we had planned to open the store and just started driving around. Tom calls it “driving for dollars”, but all it really is is driving around the target area looking for potential locations, taking pictures and getting contact information of either the company leasing or selling the space. Below were a few of the potential locations.
Purchase or Lease?
Initially we had planned to purchase a building, but when looking for potential locations, we first wanted to focus on finding a few prime locations, then we could determine if we purchased or leased them. After completing our driving for dollars campaign, we had 11 potential locations. We put each one into a spreadsheet and collected information such as the square footage and lease/purchase price. This allowed us to compare all properties by cost per sqft. We also then input each property into Google Maps and created a map that contained all of the potential locations. This allowed us to visually compare each location relative to roads and other nearby stores. Below is an example of what we did in Google Maps.
Commit to the Location
Once we had all of the information and analyzed the financials and location, our top choice was a building that was available for sale. We chose this building for a few reasons, which Tom describes below:
- Location: It was located on Main Street on a corner lot, which is surrounded by other businesses and gets heavy traffic.
- For Sale: We were hoping to purchase a property, and this one was for sale.
- Good Value: To open the store we did not need a lot of square footage. This building has the sqft that we were looking for and was one of the cheaper cost per sqft.
- Other Income: This building consisted of 4 units; the lower 2 were commercial and the upper 2 were residential. Since our real estate company was looking to purchase the building, it would have the potential of 4 monthly rents from this building.
- Deferred Maintenance/Motivated Seller: Only 1 out of 4 units were rented (one commercial store). The other units has been vacant for a while and needed quite a bit of work. The building had been for sale for a while and the owners were out-of-town. This is a classic example of a seller that may be motivated because they were losing money each month and they have been unable to sell the property. These situations allow the ability to negotiate on price and for us to increase the value of the property through improvements and increasing the income.
- Potential to Expand: We mentioned above that this property had the sqft that we were looking for to start, but over time we may want to expand to more space as the business grew. If the store in the other unit ever decided to leave, we would have the option of doubling the size of the store.
To give you guys an idea of the timeframe, we started looking around for a location in August and closed on the property in January. So it took us 6 months to have a location between the analysis and actual process of purchasing the property.
Coming Up Next: Part 4 – Get Required Licenses