Getting customers through the door is vital for any business wanting to make money. Yet finding the right retail space can make or break a business – open in the wrong location and customers could be scarce and revenue insufficient. Discover how to find retail space so you get the perfect location for your business.
Retail space is anywhere the public can visit to buy your business’s goods and services. This can include shops and supermarkets, hair dressing salons and beauty parlours, restaurants and pubs, garages and kitchen showrooms, newsagents and estate agents. If someone can walk in off the street and buy from you, then likely you’ll be operating from retail property.
Finding retail space
Knowing how to find retail space is a balancing act and typically involves compromise. You’ll need to be careful with your budget, maximise access to the right type of customers, and pick the right location for your retail space.
1. Know your budget
Budget plays a huge part in determining what retail space you can find. Before you start looking at premises, you need to know how much you can afford as rent will be one of the main costs of running a business. While there are other costs to factor in, it’s important to calculate if you can afford the base rent before viewing something that’s too expensive. Shorter leases tend to be more expensive, but factor in rent reviews in longer leases to ensure you’re not paying too much.
2. Know the full retail rental costs
The headline rent for retail space isn’t the only cost to factor in. When viewing potential retail space, ask for typical costs for any service charges or maintenance fees. You’ll need to factor in business rates and energy bills, too, which can add significantly to the overall cost.
3. Decide what type of retail space you need
It’s worth sketching out what retail space you need, how much space and what you’ll use it for when deciding how to find retail space. Having a clear list of retail space requirements can help narrow your search and ensure that you don’t end up with too much, too little or space that is unworkable. It’s worth planning for future changes, such as potential expansion. When researching potential retail space, check with local authorities and the landlord to confirm your particular type of business activity can be conducted there and if there are any restrictions such as access or opening hours.
4. How to find retail space – location
Location is one of the most important factors when finding retail space. It can dramatically affect footfall and customer traffic, so it pays to research the ideal location. Research the local area as you need to ensure the footfall is sufficient for your retail shop. You can get location-based demographics from the Office for National Statistics and UK Data Service Census.
Some stores, such as upmarket restaurants or shops selling expensive designer goods, do best in affluent areas. If targeting busy commuters, look for locations close to transport such as railway, tube and bus stations. If selling custom-made kitchens, a site on a retail or industrial park may be better than a shop in a busy high-street. Competitors with stores nearby can be a good thing as it indicates there are plenty of customers around. Similar shops in a cluster encourages customers to linger. Look for retail space with plenty of parking or access to public transport.
5. Where to look for retail space
Looking for retail space can be lengthy and time-consuming, but there are organisations that can help. Check with your local enterprise agency, Local Enterprise Partnership or chamber of commerce for advice on locations. Local newspapers may carry adverts for small business premises and shops available for rent, and there are many online sites that list commercial and retail property to rent and buy such as Rightmove and Zoopla.
You don’t need to go down the traditional route of hiring a commercial agent, either. While commercial agents are useful, providing information such as Energy Performance Certificates and an idea of likely costs, alternatives do exist. If you’re interested in a pop-up space, consider a matchmaking service like We Are Pop Up or Storefront that helps brands find and book unique pop-up spaces, along with shops willing to share and rent space.
6. Lease or license retail space
While few businesses are in the market to buy retail space as a freehold, for most smaller businesses the decision is usually between leasing or licensing retail space. Most retail space is leased – a legal contract that establishes the terms of the lease, payments and duration. The average length of a lease is around 4.5 years according to the Property Data Report 2014. Look for break clauses so you can exit from the lease earlier, and include conditions such as rent reviews, maintenance and service agreements, and how payments are made.
Licensing may suit smaller, start up businesses breaking into retail. Licences are better for short-terms retail needs, such as six months to two years, and have fewer conditions attached to them. Many shared workspaces and enterprise premises operate licences to encourage start ups. However, licences are limited – you won’t be able to change the layout and you won’t automatically be able to continue the licence at the end of the agreed term.