In my earlier columns, I explained what I think are the basics of business ownership: taking some basic business/entrepreneurship classes, understanding ethical business practices, and understanding the personal and financial demands. Then I discussed what one needs to research as they prepare to open up a comic book store and how to take this information and incorporate it into a business plan. This column’s information will largely come from what we did to open Neptune Comics, as well as a few things that we did not do that we later wished we had. This is your chance to find out from a young store how to get started. You can learn from my experiences and mistakes, so that if you should decide to do this for yourself, you can get off to a strong start. If this is the first column of mine you are reading and want to know more about opening your own comic book store, be sure to go back and read the columns prior to this one.
“They” say that the key to a successful business is location, location, location. So, let me discuss this a bit. While you won’t be ready to sign a lease just yet, you do need to consider the area in which you want to put your store. Check areas where you think you would like to have your store, and see if there are any commercial units available for rent. Most of the time, an available space will have a phone number displayed somewhere. Call some of them to find out what the average cost per square foot is in the area and keep track of these addresses and prices. Keep in mind that often stores in high-traffic retail areas, like malls and strip-malls, are more expensive than the rents for stores off the beaten path. Often, stores closer to freeway on/off ramps are also more expensive than those further from these major access points. Sometimes saving on rent is good, especially when you have a new business. However, sometimes being closer to the freeway or in a higher-traffic retail center can make up for the higher rent price with a higher initial volume of customers.
Once we had a few ideas for store locations for our store, Neptune Comics, we called Mel Thompson up again. He did an analysis for us on three addresses, showing us all kinds of useful demographics for each area like the population, average age and household income. Mel also had a spreadsheet that showed us, based on this demographical data, the anticipated revenues at each location over a three-year period. We could then get a general idea of which locations had the better potential for profit. If you can’t or won’t hire a professional like Mel to help you, then you need to find out the area demographics on your own. The folks at the local city hall should be able to help you out. You could also try the local Chamber of Commerce, if there is one in your area. If you read my last column on business plans, you know that this information is an important part of your business plan.
Just because you think you have found the ideal location does not mean your store will be there. Unfortunately, one of the challenges of being a new business owner is that you have no past for a landlord to look back on. They don’t know if you are a good tenant if you have never been one before, and living in your parent’s basement does NOT count, even if you keep it really clean. So, you have to do a couple of things that help “up your image.” One of these is hiring a commercial realtor/broker to help you find and negotiate a lease. Hiring means you will have to pay them something once they get you a location, so you will have to spend more money than you would if you just made the calls yourself. However, not only do they have better resources to find available spaces that fit your needs, commercial brokers also have the ability and experience to negotiate leases on your behalf. A landlord might be more convinced to take a chance on a new business if a broker serves as a mediator than he or she would if you meet him or her with a long box full of comics and a dream in your heart.
Be sure your broker knows what kind of space you need and where, and discuss with him or her your willingness (or lack of) to improve the space to fit your needs. If you do not know which type of lease is which, have him or her go over that with you. Your broker should also be able to help you pinpoint areas in a city that have rents within your budget. Weather or not those areas have available retail space might be another matter, so be prepared to be a bit flexible. Usually, if the broker finds a place they think you might like, they will set up a walk-through for you. At this walk-through, you should meet the landlord or one of his/her representatives and find out more details about the lease: When will the space be available? How long has it been vacant, are there other companies already vying for the spot? Is the landlord willing to improve or build-out the space for you if you need it? When does rent increase and by how much? How long is the lease? Is the lease gross or net or “triple net?” Your broker should already have a copy of your business plan that he or she has gone over, and he or she should be able to help conceptualize your store ideas to the landlord. If you really love the space, you might even offer to have the three of you (broker, landlord and yourself—other involved partners too, if you have any) sit down with your business plan. As a rookie business owner, you want to impress upon the landlord that you have the funding and planning to be able to last for the entire duration of your lease, most of which are three to five years long.
While you are there, be sure to see how many vacant retail spots are nearby—this will give you an idea of weather or not a retail business is viable there. Also, check out parking, see what other types of stores are there, look for public transportation stops, and get a feel for the overall quality of the neighborhood. Neighborhood is a big deal. If this is a new development, drive around and check out other developments in the area to see if there are a lot of vacancies or not. If this development has a residential area nearby, look to see the quality of the homes. Some neighborhoods are very “seasonal,” which could mean that it draws a lot of tourists during a part of the year, or that there is a college nearby that increases the population when school is open. (Your business might be able to exist in a seasonal neighborhood, but be sure to plan for the peaks and valleys in business.) Check out the neighborhood during a variety of days and times that would correspond to when you would have your shop open for business. I have been in downtown areas, for example, that are beautiful and bustling during the day, but become dark and scary once the sun goes down. The main rule when choosing a neighborhood to put your store into is that if you don’t feel comfortable outside of the store, or having your kids stand outside the store, your customers won’t either. Knowing what kind of neighborhood you are planning to put your store in will help you know what kind of customers you will have, since most of a comic book store’s customers come from within a 10-mile radius of the store.
Don’t forget your budget when it comes to picking out your location! Rent is not the only issue here. Different buildings have or require different types of outdoor signage. Outdoor signage is important because it is the first thing people see before they enter your store as well as showing people exactly where you are located. Sometimes the signage is included in your lease, other times you have to purchase it and pay to have it installed. The latter can end up being quite expensive! Talk to the landlord about the signage requirements, see if he or she has any recommendations for a sign company, and then call a couple of others. If you have what is called a triple net lease, then you need to know what the other expenses are. Generally a triple net lease price includes only the cost of the space you are renting, and you are then responsible for all maintenance costs and fuel costs inside and out. If you are in a building where you share the property with other tenants, find out if there is shared electric and water and how the landlord divides out the costs if they are. Ask what the common area maintenance fees run per year, and if they have gone up or down over the last few years and by how much. Evaluate the condition of the space you are considering, and find out if the landlord is willing to chip in financially for improvements or if it is going to be completely up to you. Find out what, if any, other properties the landlord owns and visit them. If you feel confident, talk to other business owners who rent from this landlord, and see what their opinions are of him or her and what they say about the overall maintenance of the area.
Finally, and this is key, be sure that people can find your store. Even if you are one of several tenants in a large downtown building on a one-way street, or running a store out of the basement of a home that is also zoned commercial, make sure that people going by see that you are there. Have signage, and be able to give simple directions to the location from a variety of locations. Unless you are selling products exclusively via internet or mail order, you will want customers to come into your store. If you do things right, people should be able to find you, even when they are not looking, “I was just driving by and saw that there was a new comic book store here.” While having a store right off of a major freeway on/off ramp with great signage and high traffic is ideal, it is not always affordable. If that is the case for you and your future store, make sure people can still find you, even if you are off the beaten path.
Another way to be sure people find your new store is advertising. Stay tuned, because that is a topic I will address in a future installment of my column. Until then, feel free to contact me if you have questions about opening a store.