Footfall or Parking

BlackEdelweiss

Which is more important for a business location:

A: Prime spot on main street, not as busy as it used to be, still not bad numbers passing on foot, also lunch time trade from schools and businesses but virtually no parking available.

B: Unit located in semi busy but possibly getting busier retail park with Dunnes stores as main store, loads of parking but no passing trade apart from whatever is in the retail park.

The rent in B is probably less than half of rent in A.

The business is along the lines of a speciality pastry shop with a large emphasis on take away business.

antoinolachtnai

It sounds like A to me. A lot depends on your position within the retail park too. And what about your overlap with what Dunnes offer? Have you actually counted the foot traffic at various times of the week? Do this, and also visit and count at a couple of shops similar to what you have in mind.

Not quite what you are thinking but I would take the time to have a look at valentino's in Grand Canal Quay in Dublin if you haven't been there already. Very ambitious but it seems to work.

bigneacy

I'm faced with a similar situation, except not with a pastry shop.

I would say option A is much better, the passing trade is important for a takeaway. Something like the UK chain greggs is it?

Cornish Pasty shops tend to be in/beside train stations and on high streets rather than commercial estates.

BlackEdelweiss

If I decide to open a cornish pasty shop I will keep that in mind!

loloray

A

newman10

What retail sector ??

Dixy

For a "specialist pastry shop" (doesnt anyone read OP fully anymore) it has to be all about footfall and passing trade.
You dont mention how specialist but if you are offering take away coffee and pastry as well as your specialist items then passing trade and lunch time footfall is vital and it will as always be reflected in the rent.
1 thing to remember in these "recessionary times" is any landlord with an empty premises is losing money so when it comes time to negotiate on rent go in with your size 9's on and bid him a starting figure much lower than asking and work it out from there. If its been sitting empty for a while he will be only to happy to have any interest in it.
Just my 2 cents

BlackEdelweiss

I have found another premises just off the main street (about 4 feet off) but much smaller and would require a bit more work to get it done, but the rent is a fraction of the other place on the main st. The guy in the bigger place seems to be living in the past a bit, he dosent seem to want to realise that he cant demand the same rent as he could have 5 years ago. I cant even get a starting figure off him, the estate agent says he is being a bit awkward. The lady in the second place seems a bit more approachable, I'm getting a look at it tomorrow. The bigger place has so much potential though.

ReadySteadyGo

Go back to other guy, and show him what the current market price is!

As you are an unknown, You need exposure and customers, so I think heavy footfall will be key for that. But being beside other food shops could actually increase the rate of conversion on your footfall.

As you are dealing in lightweight items, I don't see lack of parking as a show stopper.

Ideally you could try both and keep the better one!

Any way you could do a quick trial at either locations in advance to gauge the market interest, e.g. a small stall/cart in front of either location?

antoinolachtnai

if your business is about footfall, it's all about how many people walk up and down outside. Even being slightly off the main street will make a big difference to footfall. You really need to count and see if it's worth your while being on the main street.

BlackEdelweiss

antoinolachtnai wrote: »

if your business is about footfall, it's all about how many people walk up and down outside.

This is my main question, I dont know if footfall is the key or access, ie. parking. Obviously footfall will bring in customers but these will mostly buy a single product, my main aim is to sell the product by the dozen, or even the half dozen. I am hoping that my product being a specialty that people will actually come specifically for the product rather than just decide to pop in as they pass by. For this I feel parking is a vital element and there is virtually no parking on the main street.
Then again I dont know if I should concentrate on selling single items and tea/coffee and hope the sales by the dozen grow with time.

antoinolachtnai

You need to find another store already in business and see what works for them.

If you aren't known in the market, high street is a good way, or at least a way to get known. How would you promote yourself otherwise?

Your product is easily carried, obviously.

Have you thought about what sort of people will buy your products? Young, old, single, families? Where do they go and spend their time in your area?

bigneacy

For the type of business you've described its really important to have a good presence, remind people every time they drive past how nice your products are... being tucked down an alley isn't the way to go for this type of business...

Approach the guy who owns it again and tell him you've another place in the area for cheaper, but prefer his place ask him to do a deal with you, half price for 6 months or something... until you find steady financial ground.

The worst thing he can do is say no. If its for you, it won't pass you.

Molberts

BlackEdelweiss wrote: »

This is my main question, I dont know if footfall is the key or access, ie. parking. Obviously footfall will bring in customers but these will mostly buy a single product, my main aim is to sell the product by the dozen, or even the half dozen. I am hoping that my product being a specialty that people will actually come specifically for the product rather than just decide to pop in as they pass by.

Just my 0.02c here -

If I was walking back from the bank to my shop and walked past your window on a nice day like today when I was in a good mood (or on a rainy day and needed cheering up!) and got a yummy smell coming out or saw a tempting window display, I might pop in and get a treat for myself and the staff.

I wouldn't however get in my car and drive to get that treat. I think for people on their lunch breaks tend to "justify" a little treat but its all about impulse and convenience.

I would choose option A but only at the right rent. There is no joy (and no point!) in having a busy business that only the landlord is benefitting from.

If you are hoping for bulk orders you could always deliver if there was no parking. Or have them pay and order in advance and pull up outside while someone runs outside with the package to them

ps. I work around the corner from the aforementioned il Valentino on Pearse street. I've only sat in and had a pastry there once since it opened but as a treat will get one of their takeaway coffees. They're famous in our building for their great coffee - handy for them as theres a great markup for minimum effort and time - you need to have add ons like that as your bread and butter imo.

good luck with the shop!

Claire

BlackEdelweiss

I am planning on having a free delivery service to local offices and businesses, well free if you buy a dozen, €1 if you buy less.
I cant even get the estate agent to approach the guy in premises A with an offer I could afford, even at the high end of my spectrum. The premises has been empty for over a year now, I dont understand his thinking but he dosent sound like a great landlord either.
I have made my first offer on premises B, its going through an agent so I have to wait for a reply, hopefully tomorrow.

tombull82

its a shame you can't get your hands on A main street frontage is almost a must for a business like yours. It gives passing cars and ramblers the urge when they see and smell your product. Coffee and tea should also be a must for this type of trade i would have thought and with the great markup on it i cant see why you wouldnt go for this anyway?

tombull82

have you thought of a website? I have seen alot of businesses/sandwich shops doing this later. Order online and its ready for you to pickup or local drop off

antoinolachtnai

Think this out carefully. What do you mean by saying that about being able to afford the rent? Are you sure that the extra turnover that a good location would bring you would not merit the extra rent? If you don't get enough customers to try your product, your business will face a slow, painful death.

Is there any way you can make make the financials of the better location work? Maybe a bonus on the rent as a percentage of turnover? Anything? Also, make sure to speak to a lot of business people and estate agents to see if you can figure out what the owner's 'angle' on things might be and if there is anything else that might come available.

My big concern is that your business is undercapitalised, i.e., you do not have enough money to achieve your business idea.

BlackEdelweiss

The main thing against A is that the rent is around €50,000 while the rent for B is hopefully around €12,000. Premises A is on the main street but this street is not the busy center of trade that it used to be, a lot of the trade in the town has now moved to the retail parks that are just off the main street(within walking distance). These parks are very busy on weekends whereas the main street has some passing trade on Saturday but is virtually dead on Sunday.
Premises A would get a lot more drop in trade during the week but I feel the larger sales would suffer due to the lack of parking, it is a rare day when you can park on the street. Also it is often quite hard to get down the main st in a car due to traffic lights so alot of people avoid the area completely, sometimes I might not be on the street for a month or more.
I dont know if I would sell €30,000 more of my product just by being on the main street, not without increasing my prices dramatically and I want to avoid getting caught up in this celtic tiger bull**** of charging €3 for a cup of coffee. If I could get him down to about €35,000 I could possibly give it a go but not at €50,000.
As someone said somewhere on the internet "all the best places are gone, the rest of us just have work harder to get the best out of the not so good places".
I know I would be at a disadvantage in B but it would also allow me to give it the best go I could without having to panic about meeting such a high rent every month. I could develop my product to a high standard and use all my marketing ideas to try to get people to come to me rather than just hoping the smell of my products will entice them in every so often.

antoinolachtnai

You obviously know your product well, but are you really going to make larger sales? The essence of a bakery product is that it is fresh, so you buy small amounts frequently, rather than a large amount all at once.

30,000 euros of sales is 600 euros a week, 90 euros/day, 9 euros an hour. So you'd need to make two sales an hour more to justify it. It sounds workable to me.

You need to really do your counts. would the main street give you an extra 100 or 200 in passers-by per hour? If it does, the higher rent might be worth it.

Also, you have to put the cost in context of your other expenditure. If you are spending tens of thousands on equipment and fittings, then 15000 more in the first year's cashflow is probably worth it, for the greater certainty it would bring. If the setup costs are very low, it might not be such an idea.

15000 euros is really very little for marketing an experience product like yours. How much would it cost you in marketing to entice a new customer to your store through advertising? I reckon it would cost you 10 euros per customer at a minimum, and it could well be 20 or 30.

Think carefully about it.

BlackEdelweiss

I just heard from a friend of mine who knows the local industry very well that the guy from A is looking for €90,000, so it would be somewhere between that and the figure the agent gave me of somewhere above €50,000. It would also have rates of about €8,000 so I think that fairly closes that option. I'm still not fully convinced about B either, I think it has possibilities but it also has drawbacks.
The search continues!

bigneacy

€90,000 is absolutely ridiculous. Its not 2005 any more. This Landlord needs to wise up and realise that that rent isn't going to happen.

Sounds like he's more trouble than he's worth, BlackEdelweiss it sounds like you've your head screwed on and have thought this through properly. Go with option B, see how you get on and if it goes well in a years time then open another outfit in the town centre (next door to landlord space cadet, just to stick the knife in! )

Do you mind me asking what town or locality you're in? I'd be interested to know because of the hefty rent he wants...

tombull82

I sympathize with you on the prices been asked.

I live in Carlow and we have the same thing going on here also. Medium sized premises on the main street are also looking for these figures still even with half the shops closed down around them...

Carlow is very similar in size to letterkenny but I would say there is probably a better tourist footfall up there???

Sounds like you may have to keep up the search for the "right premises"

Have you thought about Mobile units?
Just to test the waters.
maybe this could also help you realize whether your customers would prefer a location with parking and or then you could try locate somewhere with a busier footfall to see if your sale are higher etc?

paddylonglegs

BlackEdelweiss wrote: »

I am hoping that my product being a specialty that people will actually come specifically for the product rather than just decide to pop in as they pass by. For this I feel parking is a vital element and there is virtually no parking on the main street. .

So if people are driving in to collect one of your products that they ordered (say a specially ordered birthday cake or something), then you will have had to have a phone conversation with them earlier. In this conversation you could ask them are they driving, if so, let them know where specific car parks or parking spots are, and tell them you will comp their parking ticket, or take the cost of it off the product they have ordered. Is it possible to do that or is there virtually no parking to be had?

antoinolachtnai

I'm sorry, are we talking about letterkenny? If so forget everything I have said. Those would be crazy prices to pay for a premises in an outlying town. Even the lower priced units seem very high to me.

bigneacy

I'm not sure where letterkenny came from... it'd want to be an anchor unit in a shopping centre for that money in letterkenny.