I don’t know about you, but we were so excited to get started and look for a spot for our coffee shop that we went the very week we decided upon the idea. We really knew nothing at the time and still are learning, but at this point have more of a plan on how to go about looking for retail space, and what to be looking for. Now that you’ve familiarized yourself with basic terms and have your business plan, it’s time to start looking for that retail space.
Looking for Retail Space
Use a Broker
If you know what you’re doing, you could look for places on your own, but for the most part it’s better to work with an expert. A good broker can represent you properly to the landlord, help you find creative locations that you may not have the eye for, and access market properties to which you might not have access. Brokers usually get paid from the landlord, so it doesn’t cost you a thing.
Map it Out
Map out the range of the area you’re considering to start exploring profitable locations that bear a lot of potential customers. Pin in one color:
- businesses that attract a similar target market
- major grocery stores/anchor tenants
- coffee shop competitors
- other locations that may contribute to your success
This will help communicate to your broker the boundaries in which you’re looking to be, and the “hot spots” that are at the top of your list.
Use your Resources
As you and your broker are communicating and checking out locations, it doesn’t hurt to look yourself. Even when we found a location ourselves, we still had our broker visit it with us and be the one to communicate to the landlord, but we liked directly being a part of the search process too. It adds to the excitement! We found some places of interest through online resources such as LoopNet, “for lease” spaces just driving by, and even through word of mouth.
Keep an Open Mind
Be patient throughout this process, as good things often don’t come easily, and the right location is worth waiting for. Keep an open mind and be flexible about your options. Think outside the box in terms of where your coffee shop can be. It may work better to consider a temporary/short-term lease, or a pop-up shop concept to lower your overhead and build cash flow. Have your broker help with other creative options. Know what you can bend on, what affects sales, and what to sacrifice if it means rent can be cheaper. Don’t be set on an unrealistic location if you’d better afford a spot a few streets away.
Don’t fall so in love with a spot that you can’t be realistic. Success is about creating an experience, so take what sets you apart and be able to adapt to different locations so you’re not unrealistically set on one.
So what will this process roughly look like? While looking for a retail space is never predictable, here’s a general outline of what you can hope to expect these next few months, and who will be a part of it:
- Meeting with a broker- introduce your business, your tenant requirements, and business plan/financial status
- Property Initial Search- begin working with your broker to find the right fit
- Touring & locating the right property- can take a couple or few months until you find your perfect space
- Letter of Intent– submit to summarize your interest and points of the deal
- Due Diligence– make sure permits, licenses, insurance, zoning, etc. is in place
- Lease Negotiations– create a detailed, legally binding contract between you and the landlord, can take a couple of months
- Lease Execution– make it all happen
- Keys- obtain your retail space. Then the real work starts!
Here are some players you may end up working with throughout this process.
- tenant representative-only represent tenants (not landlords)
- brokers- represent tenants & landlords
- landlord- who you’re renting space from
- attorney- to set up the business, review your lease & contracts
- cpa- help get financial records in order, looks at loans
- insurance agent- for insurance needed
- architects/contractors- to look at the space before you lease it & get their advice for lease and build out plan of action
Now that you’ve started your search, keep an eye out for our next post to learn about which criteria to judge your potential locations on, so you can narrow them down to the perfect retail spot you’re waiting for.
- The Complete Idiots Guide to Running and Starting a Coffee Bar
- Espresso! Starting & Running Your Own Speciality Coffee Business
- Start & Run A Coffee Bar -love this one-
- SBA.Gov- Tips for Choosing Your Business Location
- Aurora SBDC Seminars: “Location, Location, Location” & “Look Before You Lease”