Reprinted from the San Diego Daily Transcript

Flocke & Avoyer Provides Tips To Small Local Retailers On Obtaining Store Space
By David Baker
Sales Associate
Flocke & Avoyer Commercial Real Estate

Whether you have years of experience as a local retailer or are in the process of opening your first store, among your most important considerations will be your business space. Small retailers should expect to spend about 10 percent to 20 percent of gross sales on rent for retail locations, so the importance of making the best decision as well as having as much clout as possible in negotiating for space is immense.

In San Diego, the small local retailer competes for prime sites, in part because of the number of small retailers - according to the Greater San Diego Chamber of Commerce, some 94 percent of the retailers in the county are "small businesses" employing less than 50 people. Small retailers also "compete" with the much greater financial clout of national chains, which might be opening anywhere from five to 75 stores a year, many with services that now compete with the traditional "mom and pop" ventures. This makes the site selection process - and lease negotiations - trickier than in the past, when a local retailer might think "location, location, location" without worrying that the neighboring national retailer offered exactly the same goods, possibly at lower prices and enjoyed the deeper pockets that landlords prefer.

Starting a business and thriving takes patience, research and dedication - which are the qualities that are brought to the table by the best commercial real estate specialists in retail properties. As Flocke & Avoyer Commercial Real Estate has grown to become San Diego's largest volume, locally-based commercial real estate firm specializing in retail properties, we've developed recommendations for prospective retailers in the process of opening a new business, and for established local retailers looking toward enhanced success.

Tips for new business owners:
Don't look like a "rookie" to a prospective landlord. When looking to open a first location, it is important to provide the prospective landlord with a solid package of information, including at the very least financials, a business plan, space and structural requirements, and appropriate photography. With competition fierce in the race for space, you should be represented by the most knowledgeable retail real estate specialist who will help find the right site after you develop this all important package.

Look for retail space where anchor tenants draw business. A location that attracts people is one that gives you enhanced visibility. Centers with movie theaters and/or grocery stores are particularly attractive because they generate foot traffic. The caveat to this is to understand the anchor tenant's business. A small local sporting goods establishment most likely can't compete with a Sports Authority or Wal-Mart in terms of volume or pricing - so you don't want to be next door to your larger, stronger competitor.

Research, research, research the location, location, location. One of the biggest mistakes that can be made in retail is setting up shop in a neighborhood or center wrong for your market. See to it that your broker gives you all the information possible about the area you are looking at, including the demographics of the residents, traffic counts and competing business.

Watch and learn. Follow the example of the larger retailers, who spend a considerable amount of money researching the market, location and buying habits of an area. Whenever you can, reap the rewards from the big retailers' investments by letting them "pay" for your market research.

Have a timeline and stick to it. The process from research to actually opening a new retail business can take anywhere from three months to two years. Since retail space leases typically are five years, you need to be realistic about the time you need to accomplish what must be done before your first sale.

Tips for owners of existing retail businesses:
Know the competition. Established retailers should constantly be researching and studying the competition to improve their own marketing. Know exactly what the competition is doing and going to do.

Continue to look good on paper. Keep a binder handy with current financial statements, sales and marketing brochures, interior and exterior pictures of your store and other current information. Having a solid, up-to-date portfolio can help you look organized when going to search for other locations.

Live in the "now." Continuing to build business takes as much work as starting it up. The more flexible and up-to-date the products and services are, the easier it will be to "move with the times."

Keep in touch with the community. People shop where it is convenient, so a large amount of business comes from the surrounding community. Find out what the market, clientele and community are doing, and become a friend and neighbor wherever you have stores. Your participation as a sponsor of events or teams, on community planning groups and in support of nonprofit groups, can repay you with loyal, supportive customers.