Although e-commerce and mobile sales may be growing rapidly, plenty of entrepreneurs still find success opening up traditional brick-and-mortar stores. Much of that success can be attributed to having a great retail space. After all, no matter how good your business concept or product is, you won't make any sales if people don't come into your store.
Whether your store will be your primary business location or an add-on to online operations, here's what retail entrepreneurs recommend when you're looking to rent commercial space.
Know what type of space you want
When you're looking into commercial real estate, you have a few different options, all dependent on your budget and business type. Smaller businesses with limited inventory could open up in kiosks. Others might prefer larger spots in shopping or strip malls, or even stand-alone buildings, if they can afford it.
Serial entrepreneur Nicole Bandklayder, who operates two retail businesses, advised business owners to think about their size and budget requirements when considering the type of space they'll need.
"Figure out your realistic budget and stick to it," Bandklayder told Business News Daily. "You also need to know the size of the space you need before you start looking, as this will have a big impact on the price."
Similarly, Mallory Thorburn, owner of The White Magnolia bridal boutique of Atlanta and Greenville, South Carolina, said to think about your business's future expansion needs. [See Related Story: 10 Things to Do Before Opening a Retail Store]
"One of the most important factors to consider is square footage," Thorburn said. "You want to make sure that not only is the space big enough to accommodate your current needs, but additionally there is room to grow in the space as your business expands."
David Wolfe, CEO of Leesa, an online mattress company that just opened its first retail location, said you should also think about how you can design your potential space to tell your brand's story.
"For Leesa, opening our retail concept in NYC allowed us to highlight the positive impact of our mattress-donation program [and] create a lot of buzz around our brand, and [it] allowed customers to try the Leesa mattress for themselves in a pressure-free environment," added Matt Hayes, Leesa's director of marketing.
Choose the right location
Once you know the type of space you need, you'll have to find it in the perfect location for your business. Wolfe reminded business owners that foot traffic and demographic makeup of the area are among the most important considerations when choosing where to set up shop.
Bandklayder added that doing your own in-depth research on foot traffic can help you make this decision.
"How many people walk or drive by on a daily basis?" she said. "You can get this information from the owner of the space, [but I also] recommend asking the surrounding stores about traffic numbers just to be safe. The last thing you want to have to deal with is signing a lease only to find no customers knocking at your door."
If you're setting up as a stand-alone building or in a suburban strip mall, it's also important to consider customer parking.
"Is there a private parking lot for the space or a parking deck close by? It may seem minor, but difficulty parking can really deter customers from your business," Thorburn said.
Finally, Bandklayder advised thinking about the surrounding businesses — and their typical customers — at your potential location, especially in a shopping mall. If you place yourself near retailers that target the same general demographic as you do, it may boost your business, while setting up near shops that are too dissimilar could cause customers to avoid you, she said.
"You wouldn't want to put fine jewelry right next to Hot Topic, because typically they [don't attract] the same type of shoppers," Bandklayder added.
Fully understand your lease or contract
Think you've found your dream location? Carefully review your lease or contract before you agree to it. Most commercial spaces want at least a five-year lease, which can be a huge commitment when you're just starting out, said Thorburn.
"You can typically find more lease term flexibility in a privately owned building, rather than a corporate-owned space," she said. "If you're stuck with a longer lease term, make sure there is a clause within your lease that you can sublet, should you need to."
If you're looking for space in a mall, Bandklayder said to take note of any time requirements your contract may entail. These locations may require you to be open during certain hours and dates, which would affect your staffing needs, she said.
Hidden costs that are not clearly stated up front (insurance, property-management fees, common-area maintenance, etc.) can also be an issue, Thorburn said. These can add up to a pretty significant additional monthly expense. It's important to get a clear understanding of these costs before you engage in a lease.
"Hire an attorney who specializes in retail leases to represent you during the process," Thorburn suggested. "It may seem like an unnecessary expense, but you really want to make sure that you are protected. If you decide to go about it without an attorney, remember that everything is negotiable, and don't be afraid to ask for what you want."