New Location???...Need Advice...Please HELP!!!

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NcFramingChick

CGF, Certified Grumble Framer
Joined
Feb 10, 2007
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112
Loc
High Point NC
So here's the deal. My current lease is up for renewal. Right now I have super high rent in a strip center with 2 large anchor stores. I found a smaller strip center a couple of miles up the road. Its on the same street I'm on now except for I would be having direct road frontage. Here are the Pros and Cons. Would you stay or move??

Pros: Rent cheaper by half
Signage and store at road front
No CAM fees

Cons: 400 sq ft smaller (current location is 1600 sq ft)
No anchor stores
MOVING
The cost of moving and informing my customer base that I'm moving
The chance of another frame shop opening up in my spot!!

Another thing I have to consider is the fact that a Hobby Lobby is directly across the street from the new location. Do you think this could hurt my business? Or it could boost sales drastically!!!

Also I know I wouldn't have as much walk-by traffic without the anchor's but I do have 31 years of loyal customers...but could I ever gain new ones??? Ugh!!! :icon45:

Anyways the fact is the framing business just is not what it used to be in my area. I need and want to cut costs but don't want to make a wrong move either. What would you do????

(More Info: This is the second location my business has been moved to so I know my customers will follow...we have been at current location 7 years)
 
In my shopping center, you have to be near the anchor stores to get the big traffic. By moving you would probably lose some customers, and not get the walk in traffic you get now. On the other hand, cutting your rent in half by moving is also an attractive option.

I moved 17 years ago to my current location, and it took a couple of years to get my customers back. That's a tough choice you are going to have to make. Good luck with the decision.
 
I've been in my present location for seven years too, and moved three times before that - opened the doors 22 years ago in the location I'm back in now. It's in a smallish downtown, and by the way this my best year ever.

Imho if you move, concentrate on keeping your present customers, make them want to follow you. Make them excited about following you. Put the rent you save into a mail campaign to your existing customers.
Why? Because it costs five times more to attract a new customer than to keep an existing one. The new customers will come because your happy existing customers will tell them to come and frame with you. These word-of-mouth recommendations will reduce the worry about another frame shop moving into your existing location.

Mike
 
Sounds like a tough decision.

For what it's worth, have you ever noticed how big boxes like Home Depot and Lowes usually move in right across the street from each other, or next to each other? I'm not sure what the exact reasoning is, but it may reflect on the opportunity to get a space across the street from a major competitor.

One way to look at your choice is this:
In your current location, the anchor stores may contribute to foot traffic in the shopping center, but not necessarily "qualified" traffic that will come into your business. If you take up residence across the street from HL, every time their customers walk out their door, they will see you. Could be a good option. Potential customers who don't like their prices, service, lack of personal attention, etc, may be inclined to give you a try. If you played it strategically with the right signage and marketing plan, it could work out well for you.
 
Another thought: You might consider taking a formal or informal poll of a cross-section of your existing customers. How many of them find you convenient because they frequent other businesses in your shopping center? How many would find the area of your new location more difficult to get to?

If your customers are your customers because of the shopping center you're in, you might reconsider whether to move.
 
I agree - If you've never surveyed your customers why they shop by you - its time now. If you have -use the data.

Ask your existing customers!
 
I guess the easier question, for me anyway, is if your current location is making good money or not

If you are doing well, why risk the change?

If it's not making really good money, how much less sales would still earn same income? How much more would you make if you hit 80% of current sales

And, last why do you want to move?

Have you considered using te potential new lease as a leverage tool in renegotiating your current location

And, lastly, which location is more desireable and what are the occupancy rates for present, 6mons, 1 year?

I think the biggest mistake we make as retailers is trying to "save" mony on rent
 
Bob Carter said:
Have you considered using the potential new lease as a leverage tool in renegotiating your current location
Click to expand...

I would definitely explore the possibilities of this suggestion. Also, be sure to consider convenience factors for your customer. Is parking adjacent to your current store? To the potential new one? You don't want people to have to carry their items a half mile from the car to your door. Also, while the road frontage and signage is certainly tempting, would you be able to make good use of them? What are the local signage regulations? What about access, ease of ingress and egress to the lot? Some locations may seem good at first but are in fact difficult to turn in and out of, or the entrance gets blocked in heavy traffic etc. Consider and physically observe these factors on the new spot. Ask other tenants there about their experiences, issues, etc. Are they happy/making money?

Just a few thoughts.
:cool: Rick

P.S. No CAM fees? That's very unusual. Is there a hidden catch? Are you sacrificing something else for this 'perk'? (Maybe it's just my suspicious nature)
 
I don’t disagree with Bob whatsoever. No not even one tiny bit. His questions would also be mine.

Having said that, I am one of the few that have benefited greatly by a “lesser” location.

Traffic isn’t the cats meow for those of us not prepared for it. What I mean by that is that the anchor stores are worthless if you are not merchandised properly to benefit from foot traffic.

I was the first door in a mall when you exit Macy’s. I wasn’t able to capitalize on that for many reasons including experience, money, and skill. Mostly, though, I was way outside my comfort zone.

Just look at our fellow Grumblers. Many are happy with our locations which vary drastically. There are people trading at their house, in malls, in strips, downtown, on second floors, and God only knows what else.

What it boiled down to for me was that I NEEDED to get into my comfort zone. I just had to get to a place that I believed in!!!! Believe me when I say, you feel it in your gut. I’m sure even our “scientific” operator, Bob, will agree that when you find the right place, wild horses won’t hold you back.

Trust me when I say sometimes less is more…much more! Sometimes more is a nightmare. Follow your heart and be honest with yourself and don’t give desperation the time of day. There isn’t a greater stress than searching for a location. However, I will say that you can probably survive longer in a poor/cheap location than you ever will in an expensive/poor location.

Also I wouldn't worry one teeny tiny bit about being next to HL.
 
Two years ago I moved about a half mile down the highway from my former location. The old location was 1800 SF and on a high profile intersection with a stop light and a fair amount of foot traffic due to a various businesses adjacent to me.

Now I'm in a 1000 SF facility with no foot traffic and very low ambient traffic from three other businesses in a small strip center. Rent is half, no CAM anymore ...similar to what you are facing.

I have little to nothing to offer customers in retail merchandise and like it that way since I am a one man shop and don't want customers coming in unless they have something in their arms for me to frame.

If this is your situation then by all means, slash your rent, get better exposure from the road and continue to be a destination shop. HL across the street should help you as long as you don't see them as a competitor. Get cozy with them and differentiate yourself. You can be like the little bird that picks the tasty morsels off their back.

Be sure to do all your due diligence.

Then, with smiles on your heals ...move on.


By the way ...This second year in my newmoreoutofthewaysmaller location I'm up about 60% over my last year at the old location.
 
Not knowing the exact area and all the tiny variables, it is hard to make this call site unseen.

It sounds like a great opportunity. The only thing that would make it better would be to have a Micheal's across the street. At least here in my area, Hobby Lobby seems to be very low end/ cheap stuff.

One more equation. How much will it cost to move? Do you have to do a build out or just paint and carpet?

If it cost you a years worth of profit to make the change, then your first year you work for free. Right?
 
I guess we're all just whistling in the wind here, because we don't know your market.

First, don't underestimate the costs of moving. A money-wise friend once told me that most of what we do in business costs twice as much and takes twice as long as we think it will at first. Assuming you would suffer some loss of revenue, temporarily anyway, how long would it take you to recoup your expenses and all of the profit lost in moving? Have you developed a plan to capture new growth or profit from this location? How much and when? (Those are rhetorical Qs for you; we don't need the answers, but you do.)

From what you told us, moving might seem like a good idea. However, a nagging question keeps popping up: If the new location is just a little smaller, just a couple of miles away, and has better road frontage, then why is the rent 50% less?

I suspect two possibilities:

1. Your present rent is too high, and you may be able to negotiate it significantly down.

2. There 's something wrong with the new location that you don't realize yet. Landlords almost never underprice their properties, so I would doubt that is the case. What about parking nearby? Easy access/egress? Landlord in financial trouble?

I would rather pay more and get my money's worth, than pay less and regret it.
 
Perhaps another thought might be to assess if this change is a "lifestyle" change or a "business" change

Me thinks, it i syou that needs to do more thinking, not a bunch of Grumblers
 
I've tried negotiating with the current landlord and they will not budge, they only ask for a 30 day written notice. The new location has closer parking as it is directley in front of the building and my current location you must cross the path of traffic. The traffic would be probably better to enter and exit the new location as it is very congested here most of the time. I've talked with the owners of the new location and unlike my current location they are not a corporation with hundreds of buildings for rent...they are down to earth people like you and I. The building is 9 or 10 years old and modestly priced I think. I appreciate all of your advice and help I will continue to think about it and like you said if I decide to prepare for a hard move! (I don't think it will cost a years salary though)
 
One precautionary note ...a corporate owner will have a lease full of legaleeze that hopefully defines what happens when and if. A smaller entity will often have a much simpler lease. Don't be lulled into the "good ol' boy" handshake deal of a lease. It can come back to bite you in the butt.

Believe me ...I know.
 
That's right. Remember, a lease protects both parties. Get a business attorney or commercial real estate pro to read yours with you and explain the details.
:cool: Rick
 
Good Lord did I learn that lesson! Get an attorney to review your lease! You will spend between $600 and $1,500 on them. You will sleep well at night.
 
Actually (he said tongue firmly in cheek) I think grumblers are better sources of info than an attorney. After all, why consult (and then follow that counsel) a trained expert in that field.

See CoG's thread
 
I've requested a copy of the lease and will get it the first of next week. Thanks for reminding me of the importance of reviewing leases. (Little did I pay attention when I moved in my current location but if my heating and cooling unit kicks the bucket I have to foot the bill of replacing it) :nuts:
 
NcFramingChick said:
...if my heating and cooling unit kicks the bucket I have to foot the bill of replacing it
Click to expand...


It is pretty much like that everywhere.

Most all of the new construction in my area gives you nothing. No bathroom, no sheet rock, no wiring, nothing. It is up to the lease holder to do the build-out.

That is why it can be easier to rent a space behind someone that has left. Then all you need to do is give it a face lift.
 
That's what I would be doing if I move...all I will have to do is paint and possibly clean or replace flooring. :D
 
Really tough choice.

There are advantages and disadvantages to each one. Something tells me your heart likes the move, but your business mind must also agree.

Do your due diligence and balance sheets and if still undecided....flip a coin???;)
 
Richard Darling said:
Sounds like a tough decision.

For what it's worth, have you ever noticed how big boxes like Home Depot and Lowes usually move in right across the street from each other, or next to each other? I'm not sure what the exact reasoning is, but it may reflect on the opportunity to get a space across the street from a major competitor.

One way to look at your choice is this:
In your current location, the anchor stores may contribute to foot traffic in the shopping center, but not necessarily "qualified" traffic that will come into your business. If you take up residence across the street from HL, every time their customers walk out their door, they will see you. Could be a good option. Potential customers who don't like their prices, service, lack of personal attention, etc, may be inclined to give you a try. If you played it strategically with the right signage and marketing plan, it could work out well for you.
Click to expand...

I met a guy at WCAF a couple of years ago who put his stores as close to A.Bros. as he can get them. He said the spillover is great and he offers better service, a great RM selection, and good prices. They advertise, and he benefits. I don't know any more than than that and I don't even have his name, but the concept was not a new one.
 
Jerry Ervin said:
A lot of times it comes down to what your gut tells you.

I usually go with my 'gut' feeling.
Click to expand...

Y a, I'm with that, but only after you have done the research - often it will change your "gut"

If I followed all of the professional advice (and that was a few) I received prior to taking over this business, I'd still be where I was before - am I glad I went by my gut.
 
Ask to see the heating bills from the year before. I am in a old building and my heat bills in the winter are ridiculous. I;m sure in a newer building they are way less and may make up the difference in the rent.

I mean my heat bill one month last year was over $400. That's not every month but I have to plan for it.

It's just one more thing to consider. I mean older heating systems sometimes aren't as efficient, and cost a lot more.
 
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