New Business Location Advice Needed (Long!)

Business By Moofiebonbon Updated 28 Jan 2010 , 9:24pm by Moofiebonbon

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Moofiebonbon Posted 28 Jan 2010 , 12:19am
post #1 of 6

I am considering opening a bakery/fudge factory/desert store. I am fortunate enough that I will not need to borrow any money for equipment and/or remodeling- to some extent!
I live in a very small town so I will be looking in the 2 or 3 surrounding towns for a good location.
I have found a couple of places that I may be interested in but would like to ask for some opinions.
Location # 1- Pretty busy driving street, no real foot traffic at all. The building sits pretty far from the street and only has limited visibility from one direction. However proper signage near the road would work nicely. The building is approx. 1,250 SF and has very little remodeling needed. It mainly has 3 spaces, a huge kitchen area, a large front area, and a small office. It also has 1 rest room. The rent is $500 per month and includes nothing. I am permitted signage with the proper permits. The owner is open to leases from 1-3 years or more, my choice. This building was never used for food service; however, it is open and has the proper plumbing where needed. I would have to run additional reg electrical outlets, but it already has the additional breakers that will be needed to support this. The heat is electric for the front and propane for the kitchen area. The main problems I have with this building is in the original conversations, the owner said that everything was included with maximums, and snow removal would be provided. Now, I am told by the property manager that nothing is included and they will also not be providing snow removal. Where we live snow removal can get VERY expensive, maybe 4-500 per month certain months. I think it may be still a good deal, but ???

Location # 2 After getting a bit irritated with the first owner, I set out looking some more.
There is a second location that is what would be considered prime location. It is directly across from a high traffic regular Wal-Mart and they share a traffic light that goes directly into each parking lot. The building is 1,415 SF and is newer, like maybe 4 or 5 years old. It is a very nice building and has pretty good visibility, no real walking traffic but high drive traffic. The lease is $1,500 per month and nothing is included except taxes, which is included in the other one as well. The owner does not want any modifications as far as walls, but I am pretty sure the set up is doable.

I think the first place sounds the best, rent is cheap, visibility is so-so, with good advertisement it would do well- I think. I may be just nervous and picking this apart. The extra money that I would be spending in location 2 I could invest more into advertisement. Both locations are located within 1-2 miles from other similar stores, but none that sell fresh made fudge.
I have asked current customers and they all say wherever I go, they will follow- but that doesnt really help because I already have them, I am looking for more : )

Is there any advice, information or anything that you all think would help me with this, and any other new business advice??
Thank you!

5 replies
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TheDomesticDiva Posted 28 Jan 2010 , 2:08pm
post #2 of 6

Hmm. I almost think the first location, only because you dont want to have customers walking in all day saying, "But I can get these cupcakes $30 cheaper over at the walmart...."

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vagostino Posted 28 Jan 2010 , 2:41pm
post #3 of 6

I have NO experience in all this, but my gut feeling is the first location!. First of crowds will not necessarily be your target market anyway...second...people will drive and go any places to get a good cake and desserts.
Plus, if you have good advertising it doesn't matter if it has a good street personally never go into a shop just because I saw it...I need to know more about it before.

I think is more important that you can afford to stay there the first months while you build your reputation/clientele...than being across from walmart and having to pay triple amount of rent each month...think about how many cakes you'll need to sell to get amount of money.

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CakeForte Posted 28 Jan 2010 , 4:50pm
post #4 of 6

I guess my situation is sort of similar to you, so this might help with your choice.

The place I'm in now is super cheap...OK location, but busy traffic area in between 5 schools, and about a 5 mile radius of 10 wedding venues, no foot traffic at all. I do have to put everything in myself and all. In the mean time I rent an hourly incubator as I get weddings.

I looked at two other places, 4 times the other rent, but they were "ready to go", and one was a very popular cake shop, so I would have received all of their old business by default.

I tried to get both locations, and it fell through both times. I was bummed at first... but now I'm happy because I get to design the kitchen exactly how I want it. The old cake shop ended up being a huge fixer upper, and the HD wouldn't let them open until they got it fixed. The person that ended up leasing it is investing hundreds of thousands of dollars of their own money, and can't open for at least 6 months... so that's like Fall 2010 or so.

I suggest going with the first based on what you said. I think if you negotiate a 3+ year lease, under the condition that snow removal was provided, they would go for it. Even still though, if you had to pay for two months of snow removal a year, it is still cheaper than the other places that you mentioned. That money saved on rent could be used elsewhere in your business. It also sounds like you have come up with a good strategy to promote the location, so I think you should go with that one.

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jillmakescakes Posted 28 Jan 2010 , 5:22pm
post #5 of 6

What is your marketing plan?

If you plan on most of your business coming from impulse stop, the second location is best.

If you are going to be a destination location, then the first one is best.

I own a custom cake shop with no ready-to-eat items. We are just a little off the beaten path, but still very easy to find. Our rent is good and we aren't struggling. It can be very hard in the beginning, so I'd suggest seeing how well you can make the first place work.

Maybe you could add $50.00 per month for the owners to include snow removal....

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Moofiebonbon Posted 28 Jan 2010 , 9:24pm
post #6 of 6

Lots of good advice, thank you.
Location #1- They are willing to include snow removal at no additional charge, the only problem is it would not be until 4:00 PM or after. The reason is, the owner owns a construction/snow removal business and he would put this at the lowest priority. A storage facility is next-door and owned by him as well and the manager said they do that in the late afternoons. Therefore, I do not think adding extra into the rent each moth would be much of an incentive. Maybe I could ask him for a small reduction ($25.00) per month to help with the cost for me to hire snow removal. It is worth a try. I guess.
CakeForte- Very good point on paying a couple of months per year in snow removal- yes, it would still be a major savings.

As far as impulse or planned shopping, I want both LOL!

Location #2- First this is not a super Wal-mart, only a regular Wal-Mart and does not carry food, other than essentials. The only real reason for mentioning it is because it is in a high traffic area. I hate the difference in cost, I just like the idea of heavy traffic, which in a way is advertisement.

Location 1 has had 3 different type businesses in it. Each one left because they outgrew it. This is a good sign. They claim that over the summer they held a rummage type sale selling contents from unpaid storage facilities and they did not advertise at all. They simply placed a sign by the road. Whatever you could fit in a kitchen garbage bag for $2.00 and they claim that on 1 Saturday they made just under $1,600.
I car counted on 2 different occasions and times of day and traffic is very steady.

This sounds like a no-brainer! I think I may be super nervous. My husband supports me fully. We are not people that like to borrow money, and because of this we would use our own funds. This is a huge investment for us, or anyone. And I think that because of this, I am extra nervous about the investment.

As marketing goes, I have several existing customers. I get quite a bit of business from employees at the local hospital and clinics as is. I am very much in with the local schools, and I have a great many friends that have already sent me a lot of business too. I plan to advertise in the local newspapers, radio, and local cable network. I know that signage is important and I have contacts in the sign making industry. I was thinking direct mailing, but not sure.
Do you have any advice on marketing?

Thank you everyone!

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