Knowing the significance of “location and lease”, whether purchasing an existing store or starting one from scratch is the foundation of a successful business.  Understanding locational factors can be perplexing or mysterious and  sadly, many first time retailers get it wrong and never get a second chance.  A signed lease is usually legally enforceable and a valuable asset - or a potential liability.  And for retailers thinking expansion, poor decisions early on will haunt the business for years with stalled developments, costly management diversion and lost opportunity.

Inventory, marketing and management problems are all addressable in a short time frame, but if a poor site is selected and built, there’s little the retailer can do.  Good locations do not guarantee success, but continuing with loss making shops or paying harsh up front penalties are not usually an option - so it’s critical to consider every aspect of site viability.

And it’s not just rent that determines site viability.  With total costs of occupation likely to be one of a retailer’s largest monthly expenses, your landlord also effectively controls fit-out (your largest capital investment) and trading stock (your largest liquid asset), so hesitancy and wariness before you commit is wise insurance.  Gone are days when well-presented and efficiently run shops in secondary locations do well.  Being a good shopkeeper is not enough nowadays – the wrong location or wrong lease terms can mean disaster and an improperly or hastily negotiated lease dramatically impacts profits, or perhaps your family’s entire financial future!

Did you know it’s possible a terrific location is a terrible site, or a great site is a poor location - to speak nothing of the economies of site establishment and store operations?  If you can’t identify the retail forces acting upon the centre or location, distinguish the half truths and puffery about your “deal” (and properly document them!), analyse the physical site, the competition, fully understand variables affecting future sales and translate them into a robust forecast of profit, do not sign that lease!

Strong words?  You bet!  Selecting leased space is such a huge commitment to your family, a community and to the way the business operates for years, it simply must be the right location, size and configuration and on the right terms - flexible enough to accommodate plans for now and the future.