finding and evaluating the perfect spot
Chances are, if you’ve ever considered opening a yoga retail business, someone has pulled you aside and shared with you three rules of success – location, location, location. But the question is, how do the three L’s apply to the hybrid retail/service business of yoga, pilates and other wellness-based practices? And, what do we mean by location anyway? Is it the type of building, the road we’re on, the town we’re in, the friends we make, or some combination of these and other factors? The answer is, all of the above. So, here is a short primer on how the three L’s apply to selecting the best possible location for a wellness-based studio.
Location Tip #1: There Is an Inverse Relationship Between Marketing Expense and Retail Exposure.
What does the heck does that mean? The more you pay for retail rent, the less you should expect to pay for marketing and vice versa. Why? Because a good retail location will drive a lot of foot/car traffic past your storefront and this increased exposure serves as a proxy for marketing and PR. Conversely, a non-retail location will require more effort and money to let people know you exist. Either way, your combined monthly rent and marketing budget is going to be about the same. It’s just a matter of how hard you want to work to get people in the door.
One thing you shouldn’t do is fool yourself into thinking you can pick up a dirt cheap location and get by with little or no marketing. This assumption almost always leads to under-funding, the number-one reason for new business failure in the U.S.
Location Tip #2: Know Your Options.
Here is a short list of the most common types of spaces you’ll encounter and the pros and cons of each:
Shopping Center Retail
”¢ High exposure if the location is good
”¢ Close proximity to potential marketing partners
”¢ Exterior signage available
”¢ Maintenance crews often available on-site for repairs
”¢ HVAC installed and often maintained by landlord
”¢ Usually ample parking for high volume business
”¢ Price is expensive and sometimes tenants have to pay a percentage of revenue to the landlord
”¢ May have to spend a lot on build-out and union labor
”¢ Usually includes an extra monthly fee called a CAM
Choose a shopping center with big anchor tenants who pull in your target market at least once a week, i.e. supermarkets.
Suburban Standalone Retail
”¢ Storefront attracts traffic (but often not nearly as much as in a shopping center)”¢ Exterior signage provides exposure
”¢ It could be the worst of both worlds. You might still have to spend a lot on marketing but pay retail-level rent
Power Tip: Stay away from these, but if you just can’t resist, at least choose a spot that is close to the road and permits big bold signage.
”¢ High foot-traffic equals great repeat exposure
”¢ Exterior signage and window displays equal retail sales
”¢ High exposure can reduce marketing budget
”¢ Very expensive
”¢ Buildout is often costly and includes storefront construction
”¢ Often requires substantial security deposit (3-9 months) for a new business
Power Tip: Best for hybrid studio/spa/boutique with substantial retail element. Make sure to utilize windows and set up a real retail area.
”¢ Affordable and sometimes allows exterior signage
”¢ Landlords tend to be more flexible with lease terms
”¢ Lower exposure will require higher marketing costs and efforts
”¢ Stairs, which may discourage moms with strollers and mature adults from attending
Very often a good compromise, allowing a good location without the expense of retail frontage, but be prepared to work hard to get the word out, especially in the beginning. Do everything you can to get exterior signage.Office Building/Park
”¢ Amenities, heat, a/c, cleaning often included
”¢ Bathroom may be shared so you don’t have to clean it
”¢ If in a larger building/park, you have a captive audience, especially for early a.m., lunchtime and 5:30 classes during the week
”¢ Not as pricey as prime retail space
”¢ Parking, in suburbs, is often plentiful and accessible
”¢ Ease of locating and marketing to co-tenants and creating “special-corporate” plans
”¢ Often little or no weekend business
”¢ Little or no retail exposure and rarely permitted exterior signage
”¢ Bathrooms are often shared and may put off some peoplePower Tip: Choose the biggest building you can find, offer programming that accommodates business schedules, reach out to co-tenants and assume you’ll be closed on weekends.Class B/Off-The-Beaten-Path/Industrial
”¢ May be able to find unusual, interesting, large space for very reasonable rent
”¢ Landlord may be more flexible with terms and buildout
”¢ Potential for signage
”¢ Potential to spin unusual location to create cool “buzz” factor and PRCons:
”¢ Will need to market and do PR to get the word out on an ongoing basis
”¢ Often requires more expensive buildout and installation of heat, a/c, lighting and floors
Power Tip: Often great opportunities that allow for unique, creative space, but be prepared to spend a lot and work harder on marketing and PR to get the word out and keep it out.
Location Tip #3: Know Your Demographic!
Once you find a space that tickles your fancy, you need to learn whether the surrounding yoga-hood will tickle your bank account as well. The big question is: How many of the people within 10 blocks or a 10-minute drive are “your” people? This is the “zone” from which you will draw the vast majority of your clients. So it’s important to make sure that enough of the people you want to serve live or work within your client-zone to keep your studio alive.
How do you get demographic information? These days, it’s actually quite simple. First, if you are working with a broker, ask them to run a “radius study” of the location that breaks out demographic information for the 1-, 3- and 5-mile circles around the spot. All reputable brokers have access to this. The report will give you information on population size, male/female ratio, household income, age, traffic, competitive businesses, neighboring businesses, working vs. residential headcount and much more. If you are going it alone, check out these online resources: bls.gov (U.S. Census Bureau), BuyDemographics.com, Deomgraphicsnow.com, Claritas.com.
Another option is to visit one of the large national commercial property databases, like LoopNet.com, find a site near the location you are looking at and then instantly pull up the demographics on that site, free of charge. This is also a great resource for finding locations in your area.
Location Tip # 4: Don’t Be Pressured.
Landlords and brokers will want you to sign a lease as soon as is humanly possible. This is how they earn a living. So you may find yourself exposed to a variety of claims about other people interested or time-limited offers to get you to sign. Evaluate every space thoroughly and objectively and don’t be bullied. Remember the second rule of business after the three Ls: If it sounds too good to be true, it is!