Tip 04 - Identifying a location.

You’re serious. You’ve got the money. Before you start contacting companies to buy stuff you’re going to need a few other things, one of which is a location. Now, you don’t actually need to have a location leased and built out, but you will at least need to have a location identified and you will need to do your best to prove to the companies that you’ve got everything in place to move in, you’re just waiting to get the inventory because you don’t want to pay rent for three months before you have anything to sell.

That might work with some companies, and it might not with others. Most companies would prefer that you’ve got a spot with a sign on it before they start shipping you goods. But if all else fails, tell them you’ll pay $10K in cash up front on the first order and that should do it.

So, you need a location. Here are some tips as to how to find and get the ideal location:

1. Location, location, location. Where your shop is located can make or break you. Malls can bring in a lot of non-skater traffic, but might turn off real skaters, so decide whether you’re going to be a mall shop or a “real” skate shop. Also, mall rents are generally a LOT more expensive than a strip mall. Then there’s the issue of malls renting out space to all your competitors. I met with a shop owner here in Utah last week who is in a mall. Across from him is a non-skate shoe store with an Osiris display in the front. 50 feet away is a Zumiez. Vans just opened a store in the mall, so he stopped carrying Vans. And Industrial Ride Shop is opening a store in the mall in a month. And there’s another skate shop down the street from the mall as well. Obviously the less competition the better, but sometimes there’s not a lot you can do about it.

For me, I would look for a newly-built strip mall or retail area. If not new, then at least nicer than average. A junky retail space is a good sign that nobody goes there.

The reason mall rent is so expensive is because they deliver traffic. If you’re not going to be in a mall, at least find a place that is highly trafficked, preferably by your target audience. Where do skaters go other than to skateshops? Grocery stores, movie theaters, music stores, McDonalds, etc. But don’t just think about skaters, think about their parents and where they go too. There’s nothing better than a mom coming home to her skate-child and saying “Hello dearest guess what I saw today next to the nail salon? A new skater-board store!”

Think about visibility. Can the store be seen easily from the road? Is the road heavily trafficked? If it’s near a freeway offramp that’s good too, since it’s easy for people from other areas to find you if they hear about you.

To sum up–new retail, near a freeway offramp, visible from the road, near other retail that is heavily trafficked by your target audience.

2. Negotiating the lease. If it’s new retail there should be a sign somewhere saying who’s in charge of leasing. Call them up, tell them which space you’re interested in, and get the paperwork. Don’t say how much you’re willing to pay, let them tell you numbers first. Don’t tell them what your business is unless they ask. They don’t care about your story. They just want somebody to sign a commitment for a 10-year lease and then pay it. If they do ask what your business is say “Have you ever seen a Zumiez in a mall? It’s kind of like that.” Hopefully your store is not like Zumiez, but that will make them feel better if they’re worried about you, and to them they wouldn’t know the difference between Zumiez and a true, independent skate shop anyway.

The ideal lease for you would be short and cheap with an option to renew, but fat chance of you getting that unless you’re well connected or they’re having trouble selling out the space. Chances are you’re going to have to sign a multi-year lease. Don’t personally guarantee it unless you absolutely have to. Don’t sign for 10 years. Don’t sign for 5 years. The last thing you want is to go out of business and still have a $4K payment you have to make every month for rent.

Oh, and go talk to somebody who knows more about negotiating leases than I do, like the other people who have leased in the area you’re interested in.

But I’ll tell you the one major ingredient for success when negotiating a lease–have another option that is at least as interesting to you as the one you’re negotiating. If you have nothing to fall back on then you’ve already lost the game. The way you win is by being willing to walk away if they don’t give you a deal you like. That means you’re going to be negotiating two leases, not one. It’s easier to get two good lease deals than just one.

3. Build-out. If it’s new retail then it’s not built out. You’re looking at metal studs and a dirty concrete floor. If the space has never been built out then the builder will generally offer you a dollar amount per foot to cover the buildout. This is rarely enough to do what you want, and chances are you’re going to need to kick in some cash of your own. If you want the place to be really nice you might have to kick in $10-20K or more.

If the space is already built out, but doesn’t look exactly how you want it, you still might be able to negotiate with the landlord to get him to cover some of the costs. Make it seem like it’s in his favor. “This place is horrible, you’re going to have to gut it anyway to get anyone in here. Look, if you give me $10 per square foot I’ll take care of the rest, and this place is going to look awesome afterwards, and if I ever have to move out then you won’t have to redo it.” It could work. Especially if the landlord is desperate and you’ve got just as good of a deal waiting for you down the street.

4. Signage. If it were me I’d have the word “skateshop” somewhere on the front of the building, even if that’s not part of the name. If you’re just starting out then nobody knows who you are, so you might as well tell them. Putting a huge banner out front for the first month saying “NEW SKATESHOP” wouldn’t hurt either, but you might have to ask the landlord about that one.

Get a sign with canned lighting, or a cut out sign that is backlit. Don’t get one of these signs that is just printed on a white piece of plastic and placed on the front of a lighted box. Lame! Get a real sign from a quality sign company. A good sign company will also monitor your sign and fix it immediately if anything goes wrong with it. Trust me, the maintenance package is worth it.

Do you not get a lighted sign that is the color blue unless it’s a light blue. The human eye has serious issues with certain shades of lighted blue at night, rendering signs illegible. Red is good. White is good. Black letters backlit with a white light are good. Not blue.

5. Parking lot. Not for parking, but for demos. If you have a huge parking lot right in front of or near to your shop then that’s a plus for getting companies on tour to pass by your place, and a demo can bring in tons of business.

6. Neighbors. Be aware of who your neighbors are. Are they going to throw a fit if you start bringing a bunch of skaters into the area, or are they going to be cool? Skaters will skate around your store. Do you have windows that go down to the ground or do your neighbors? The last thing you want is one of your customers sending his board through your neighbor’s front window and then running away, leaving you to take care of the fallout.

As with all these tips, don’t take my word for it, go talk to 5-10 other skateshop owners and ask them about their experience, and you’ll learn 10 times as much as what I’ve told you here, and something you learn might save you a lot of time, money, and stress.