Business Buzz
By Rich Baehrle
If you have a dream to open a new business, there are so many decisions you must consider prior to the day you open the doors.
At the end of your research, if the data indicates that you should not proceed, then you must be prepared to not move forward. The worst-case scenario is to have a method of analysis where it is READY, FIRE, AIM. You are making the biggest investment of your life both personally and financially. You must get it right.
The first step is to research who your competition is. What are their strengths and weaknesses? How long have they been in business? Does it appear there are any new competitors who will be opening soon? What are their price points? Will they have any advantages with their location? If yes, how are you going to overcome your disadvantage? There so many questions that must be answered before you move forward.
Remember the old adage about location, location, location. It still prevails. If you must pay a little more to be in the right location and you can afford it, then do it. Otherwise, you may spend more money telling people where you are.
Nowadays your competition is not only brick and mortar; it’s also online – the invisible market.
Can and will your potential customers go online to find it for less? Your product or service must be unique for your target market.
Service is paramount. You must separate yourself from the competition. Why is the consumer going to come to you? Know the answer before opening your doors.
Your next decision is whether you should lease or purchase space. This is an important consideration. When you purchase, it is a more permanent and costly process involving the down payment, closing costs and other expenses.
When you lease it is also a significant decision. When you sign an agreement, you agree to terms and conditions that will affect your life for a long time. It is important that you make the right decision. You might consider entering a shorter term agreement with renewal options.
It is prudent to have an exit strategy and be able to cut your losses if the business does not work out. I am not trying to scare you; everybody wants to succeed, and I hope you do, but it is important to know the potential pitfalls.
Once you have chosen the location that you feel is ideal, the internal decisions are the next part of the process. Now it’s time to determine the right size for the retail or office space.
Calculate all of the fixed and variable costs so you can properly price your goods or services. Make sure you are accurate so that you will make a profit and not under or over price yourself.
This year will be my 40th year as a commercial real estate broker. I have seen people succeed beyond their wildest dreams. I have also seen people fail.
Preparation is a must. Even when you do all the proper analysis, it doesn’t always guarantee success. Another business might open after the fact and present a major challenge.
Brand yourself. Network locally. Treat your customers like you want to be treated. Always, always, always be marketing.
Remember to support your local businesses.
Rich Baehrle, of Berkshire Hathaway Fox and Roach, can be reached at 609-266-6680
or 609-641-0011. Email richardbaehrle@gmail.com or see www.getrichinrealestateSJ.com
