The Sweet Spot | BCBusiness
Five tips to help ensure you settle on the sweet spot
Say the word three times and the ideal location still won’t magically appear. Businesses need more than just the right address to know where to set up shop. Choose right and clients will beat a path to your door, sales will pick up and the competition may even pack up and leave. Pick the wrong location and no one knows your business exists. Collier International associate vice president Derek May; John Lecky, principal at Avison Young; Michael Olshansky with Maurice Sporting Goods; and real estate marketing guru Bob Rennie offer some advice on how to know if the location is right.
Understand your customers’ needs
Bob Rennie recounts the case of a recent development in Mission that wanted to brand itself to new homeowners as Mayberry, the fictional small town setting for the Andy Griffith Show. “No one under 30 knows what Mayberry is. There’s what we think we are and what we really are,” says Rennie. Pick a location that shows you understand your customers’ needs: “If you’re opening up a yoga studio, is there a juice bar next door or a burger place? If you’re Louis Vuitton, you should be where Hermès is located.”
Robson Street (Hornby St. to Jervis St.): $150–$300/sq. ft.
W. 10TH AVENUE (Point Grey):
Downtown Vancouver: $35 per/sq. ft.
Broadway Corridor: $26 per/sq. ft.
Source: CBRE Vancouver Retail Marketview Report 2nd Quarter 2014 / 3rd Quarter 2014
The right location allows you to attract employees—and spy on competitors
Your employees are going to want a good coffee shop, a place to eat lunch and reliable transportation. “Remember, people will be spending more time at work than anywhere else. At the beginning of the day, are they going to arrive feeling good—and leave at the end of their day not stressed about the commute?” says Derek May. For these reasons, many industries cluster around certain downtown districts, such as technology startups in Yaletown and Gastown. Being in the hub gives you certain advantages, including poaching from a competitor, says May: “Staff there are used to the commute and the area and won’t have to drastically change their lives to work for you.”
Don’t pick a location that makes your suppliers and customers go, Huh?
Michael Olshansky with Maurice Sporting Goods Inc. already had a warehouse in Mississauga when he realized that he needed another, in Metro Vancouver, for strategic reasons. With 99 per cent of his sporting goods merchandise coming from China, Olshansky says he needed a B.C. facility to process inventory coming through the West Coast. “For us to have a location in British Columbia made perfect sense. We needed to gain efficiencies and it didn’t make sense to disrupt the supply chain by shipping to Ontario and then back west.”
Don’t be boxed in by timing
People forget how much time it takes to set up a location or relocate. John Lecky of Avison Young says companies should begin preparing their move early: “Looking before a lease is up gives you time to analyze the market.” Retailer Olshansky spent more than a year looking around Metro Vancouver before signing a deal for his 75,000-square-foot distribution warehouse at the Golden Ears Business Park in Pitt Meadows. “We looked at dozens of places. We started with a big map and worked down from there.”
Be realistic about the area and its growth potential
Don’t make the mistake of believing neighbourhoods will transition into becoming the location you envision. The Tinseltown development in Vancouver’s Chinatown, for instance, had big plans of becoming a luxury mall when it opened in 1999. “They went after brands like Versace, but the rest of the neighbourhood didn’t give that location the boost it needed to succeed,” says Rennie.