There’s a great deal of truth to the business adage, “Location, Location, Location”. Where you locate can play an important part in your own operations - the commercial space chosen by a dance studio tenant can, in fact, be a deciding factor in the success or failure of the studio.
Figuring out where your dance studio will do best can be difficult. Same or similar businesses can locate in strip malls, light industrial spaces, and even in quaint heritage buildings. What makes two tenants in the same industry want to locate in such different extremes of properties? There are several reasons:
Available space: You can only put your dance studio in a building where space is available. And if a competing or similar-use business has already located in that property, then the landlord may not want two of you within such close proximity.
The hours you plan to keep: As a dance studio tenant, you will likely gravitate towards being open for business during the day but also in the evening and even on weekends (so as to attract more dance students). Make sure that where you locate in will also be open, otherwise your students will be unable to access your studio. Better yet, look for a separate door so that your dance students could come and go without any problems.
Long-term potential: Ideally, a dance studio tenant should pick a suitable location that they can successfully operate their business from for 10 to 20 years. Tenants often end up moving several times over the years as they realize they chose the wrong unit in a building, the wrong sized commercial space within a building, or the wrong location altogether.
For your next step, you must consider demographic factors by area:
Population density: The more people living or working in vicinity to the property you plan to lease, the better. Future growth plans for the area are also important. Many newer properties will be in the suburbs on the outskirts of town. A great plaza may be built on one side of the street where homes are located, but there is an empty field (which won’t be home to families for many years …) across the street.
Age and family status: A commercial property may not physically change much over time, but the age and family situation of local residents can. Dance studios are a good example of businesses that can boom and bust as the community’s ages shift. In addition to demographic information that you can often find on-line, look at what the local residents drive – how many cars and what type of cars (two-door sports cars or minivans?) are parked in driveways? It’s not that hard to get a read on a community.
Income range: Generally, the higher the income and the more family members earning a wage, the higher the family’s disposable income will be. Affluent communities are often surrounded by premium shopping centers because that’s what the residents demand.
Shopping patterns: Have you ever considered when people buy services/products? In the case of dance classes, will the parents and students be coming from their homes in residential areas or from work or school? If your dance studio is located on the wrong side of the street of a busy intersection with no ease of access, the consumer may simply drive by and pull in to your competitor’s parking lot which is more convenient.
Your site selection homework doesn’t stop here! Evaluate these additional factors:
Location within the Location: Where is the commercial unit situated within the property? On a busy end cap of a property or at the back, center, or second floor (where you will be less conspicuous)?
Accessibility: How easily can your students access your studio? Stairs may be difficult for elderly dance students. Can drivers easily turn into your business’ parking lot or do they have to cross in front of oncoming traffic?
Visibility: Can your studio be seen from the street? Or, are there trees or other buildings blocking the view? Visibility by both drive-by and walk-by traffic is ideal but there is a trade-off in price in many cases.
Parking: Parking can be a highly contentious issue and one of the hardest things to correct after the Lease has been signed. Consider the other tenants in the property and when their customers will be using parking. If parking is assigned in the property, negotiate for plenty of parking spots – so that you, your staff and your students all have a place to leave vehicles. Parking stalls closer to your studio door can be preferable.
Signage: What signage is available to you? What type of signage is this? Where is it located? Where would your studio business name be placed on a common pylon sign shared by other tenants? Would you be charged for any additional signage requested? Negotiate now for “grand opening” signage (e.g. banners and/or pull-away signs) – landlords tend to prefer knowing about this in advance rather than being caught by surprise. Signage can be critical especially if your physical unit does not have prominent exposure.
Neighboring Tenants: Who will be doing business next door to you? Will this tenant be conducive or detrimental to your business? Meet and quiz these tenants for yourself. Be friendly and introduce yourself as a prospective new tenant. With representing new tenants, we frequently ask pointed questions … what you learn may very well surprise you!
Anchor Tenants: These are the major businesses/retailers which pull customer traffic to a property. Typically, they are major grocery or department stores; however, this is not always the case. How long have they remained in the property? Are they planning to remain or move? We remember how many tenants leasing in a small shopping plaza near one of our homes were caught off-guard when the major grocery store anchor moved out. Major grocery chains frequently continue to pay rent on a vacant commercial space to avoid having a competitor moving in.
Competition: Scout the neighborhood to see if you have any nearby competitors. We recommend that you utilize a secret shopper – someone that can visit your competitor(s) and report back on their experience. As a bonus, ask your secret shopper to quiz your competitors about your business (if you are already open) – or if they are badmouthing you to their customers. Consider future competitors who may move in to the area.
There is much, much more to site selection than meets the eye. As you can see, the best locations take much research and consideration. A good business in a poor location ultimately becomes a poor business.
For a copy of our free CD, Leasing Do’s & Don’ts for Commercial Tenants, please e-mail your request to JeffGrandfield@TheLeaseCoach.com.
Dale Willerton and Jeff Grandfield - The Lease Coach are Commercial Lease Consultants who work exclusively for tenants. Dale and Jeff are professional speakers and co-authors of Negotiating Commercial Leases & Renewals FOR DUMMIES (Wiley, 2013). Got a leasing question? Need help with your new lease or renewal? Call 1-800-738-9202, e-mail DaleWillerton@TheLeaseCoach.com or visit www.TheLeaseCoach.com.