Anyone have feedback about retail space with a storefront?

[Executivecleaning]

Ok. I need your help again. I am considering getting a small retail space to help grow my business. I have not seen too many carpet cleaners do this in my area. I am motivated for the following reasons. I need a space other than my home office to get away from distractions and to concentrate. I thought as long as I was going to spend the money on a office to rent, maybe I should be in a retail location where I can put up a sign, park my van next to the hwy, and get more name recognition. Does anyone out there have experience with this? Thanks for all the help!

Kevin

 

[Dolly Llama]

Ok. I need your help again. I am considering getting a small retail space to help grow my business. I have not seen too many carpet cleaners do this in my area. I am motivated for the following reasons. I need a space other than my home office to get away from distractions and to concentrate. I thought as long as I was going to spend the money on a office to rent, maybe I should be in a retail location where I can put up a sign, park my van next to the hwy, and get more name recognition. Does anyone out there have experience with this? Thanks for all the help!

Kevin

I don't have any experience .
but I'm told there's three key components to exposure

1.) Location
2.) Location
3.) Location


..L.T.A.

 

[Executivecleaning]

I agree. I am looking at a place on the main drag right accross the street from a new Mercedes dealership and a new Toyota dealership still being built. Should have good traffic count if they built there.

 

[SRI Cleaning]

We do the exact same thing. We needed a place to park our trucks and as we were looking we can across a killer deal in a small strip mall on West Chester pike (major road). It was almost as cheap as renting parking spots for our vans and now we have office space and a nice big sign out front. I dont know that we have gotten a ton of business from it, but when I tell people our company name, alot of people say oh yeah i see your trucks on west chester pike.

 

[bob vawter]

bad idea...unless you can co-op a retail sales store into it as well...
vacuum sales and parts
janitorial sales...etc...!
The overhead will eat you alive.
PLUS you won't get that much business from drive bys......

 

[hogjowl]

I have my office right on main street. Keep one of my rigs out front most days.

Save you money and get a lessor expensive place on a back street and get more space.

 

[Mark Saiger]

Almost bought a building in town just 2 months ago. Not bad location and a pretty good set up for us. When we started to pop in the numbers, we really needed to do about another 10,000 sq ft of residential carpet cleaning per month, or a small water loss or smoke restoration additional to pay for it. Not bad, but in our community, we were not sure if this was going to be realistic. Also, you usually mis-calculate and things will cost more than you anticipate. The biggest draw back were the taxes per year. Ouch! At this time, we felt uncomfortable making the jump and have stuck to the current building. Our new shop is actually only 3 years old, but we are outgrowing it. So, we purchased another trailer, and another small storage building, then got more effecient in our current shop. It is amazing how much junk you can accumulate in 3 short years in a new building. We still have more to throw away or sell.

Crunch your numbers and go with your gut feeling, not your emotions. I am glad I did for right now.

Mark Saiger

 

[Executivecleaning]

Ok. Let's sweeten the deal. The landlord also wants to put in writing that he will give me all his work if I rent from him. He has 70 income properties. I was trying to leave this out of the equation, but after thinking about it I believe it is part of the equation. This will cover my rent because he is turning over 10% per month on average.

 

[The Great Oz]

I need a space other than my home office to get away from distractions and to concentrate. I thought as long as I was going to spend the money on a office to rent, maybe I should be in a retail location where I can put up a sign, park my van next to the hwy, and get more name recognition.

You've decided to get out of the house, so the question is whether the high visibility location is a good idea.

There's no question that high visibility is better than low, unless you are doing something you'd rather hide. High visibility usually comes with a higher cost than the same space elsewhere, so you have to decide if you can make that extra cost pay off and do what you can to make your name and service visible.

This is the "back" end of our building, which is nearest a busy interchange.

 

[Mark Saiger]

What is the rate that the landlord is willing to accept from you. Will you have to discount your rate too heavily that it is more work, but also more work on you and your equipment without a good profit?

Again, run the numbers and think without emotion.

Mark Saiger

 

[Art Kelley]

Ok. Let's sweeten the deal. The landlord also wants to put in writing that he will give me all his work if I rent from him. He has 70 income properties. I was trying to leave this out of the equation, but after thinking about it I believe it is part of the equation. This will cover my rent because he is turning over 10% per month on average.

That sounds like a terrific symbiotic relationship. It could however prove problematic if at some point down the road the landlord balks at yor prices, or is unhappy with your work or you aren't able to fit him into your schedule which happens frequently in the peak season. What provisions in the lease agreement will there be if he no longer uses your services?

 

[joeynbgky]

My first office about a year ago was a great location next to a statefarm agent. It was only 700 square feet. 350 a month all utilities included. My main reason for an office was for employees to come and go. and those damn advertisers wanting meetings.

I Moved about 3 weeks ago to another location that has an office (about 600 sq feet) and 2000 sq feet of garages bathroom and shower all in one building. Landlord wanted 800 bucks a month got it for 550

 

[PTMatt]

As you probably know retail space will cost you alot more than industrial. In my area theirs a substantial difference. I would try finding some industrial space that may have some signage. I would stay away from retail unless you plan on selling merchandise out of your storefront.

 

[Executivecleaning]

Thanks for all the help on this one. I am going to think on this one a bit.

 

[TomKing]

I would set up a trade with the landlord.
1. Cash plus cleaning
2. cleaning only
3. If he does not use his cleaning tab each month he losses.

We did a deal on our 3 year lease where we do not pay rent in Jan or Feb. We also did a graduated rate where the rent goes up a little each month.
Year one 80% of monthly rate. Jan Feb FREE
Year 2 105% of Rate. Jan Feb FREE
Year 3 115% of each monthly rate.
We also included some build out upgrade at our cost.
This is giving us the ability to grow into our building.
I would always rent in the begining. If you have any problems you can always downsize at the end of your lease. If you get into buying a building you have to be pretty big to afford enough space to grow. You can always scale up or down with rented space.

It helps with the cash flow. If your town is like mine we had 18 1800 square foot units to choose from in our area of town. I would get everyone bidding against each other. Having space in a strip mall is probally more for your own ego than really a great marketing tool. Wharehouse space in our area can be had right now for 4.75 a square. Make sure you find out if you have a CAM charge each month and how that works. The landlord can really get you if that is not set up correct. I would go for max space that you can do more in rugs, trucks water damage equipment storage.
How much office space do you really need? space for maybe 4 employees and then you would be big 6-8 trucks.

 

[tmdry]

It's been 5 years now in the biz, and we are pretty busy that I'm having a terrible time doing the "home office" thing anymore, and would rather get an office/warehouse n put someone there for the phones. Out here the HOA's are cut throats and being able to park the vehicles, have been a nightmare. The rent is also thru the roof, I'm having a hard time deciding do I take a risk and jump the gun, or still hold back?

 

[Jim Nelson]

Google this and go down to the street and have a look. 14 years ,18510 76th ave w edmonds wa 98026

 

[Steve Toburen]

It's been 5 years now in the biz, and we are pretty busy that I'm having a terrible time doing the "home office" thing anymore, and would rather get an office/warehouse n put someone there for the phones...

Congratulations on being busy, Bill. And your dilemma is a common one among our SFS graduates.

Remember that the rent on an outside location is just the tip of the iceberg. Plus even more than the increased overhead you should realize a retail, high-visibility location is an entirely different business model.

For example, I assume the reason you want high visibility is for the "drop in" traffic which is great. BUT it is a negative Moment of Truth if your prospect parks, walks up to your front door eager to book a cleaning job and ... NO ONE IS THERE. So now you need it staffed full time. (this isn't as big of an issue with an industrial warehouse location.)

We moved out of our house for the exact same reasons. (Plus too many techs there every morning checking out my wife in her robe, etc.) There is a time. But it IS a totally different and potentially more constricting business model until you get up to "Critical Mass."

Steve

PS I wouldn't count on your landlord's business. Do the deal if it makes sense without the work and view it as a nice bonus IF it happens.

 

[Ken Snow]

Listen to all the advice and act according to what your goals are. Speaking from the experience of having 5 locations all in retail environments what Steve said is exactly right~ you have to staff it during normal business hours or it will hurt your business and it also better be presentable to whoever is coming in. The sidewalks, entryways, windows etc., need to be kept clean and the overall atmosphere needs to be welcoming.