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| Finding the Right Space for Your Business Editorial Staff |
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By Cynthia Jackson Whether you are looking for the perfect location for your new business, or you are considering a move from your existing business location, the market for commercial real estate may seem overwhelming. Choices are plenty, and room for error is small. The choices you make will have a significant bearing on the success of your enterprise. Some of the top commercial real estate firms in Lee and Collier counties are in agreement about the basic questions that determine what property is best for your business: Is it more important for you to be located near a local customer base, or to be in the proximity of potential employees? "In some cases, it may be more important to have access to an employee base than to the customers," says Frank D'Alessandro of VIP|D'Alessandro in Fort Myers. For manufacturing facilities or call centers, which may not have a local customer target, this makes a great deal of sense. But in most other cases, the target customer determines the best location for your enterprise. Know your customer! Define your target customer's age, income, family size, education level, and other valid characteristics. Obtain demographic information for the geographic area from a chamber of commerce or government development commission to find out where people of this target profile reside. Locate your business near where those people live. "Some businesses don't interface with the public at all," points out Scott Cameron of Cameron Real Estate Services, Inc. in Naples. "Perhaps they are just a storage facility or warehouse, as opposed to a dress shop, for example. Or perhaps the business targets a specific ethnic population, or the elderly. This is what determines where the business should be located." "The old axiom applies," agrees D'Alessandro. "Location, location, location. You need to determine where your sphere of customers is, and then locate your business as close to the center of that sphere as possible." What are the county/city zoning guidelines for your type of business? Make sure you know the zoning guidelines that apply to your business. D'Alessandro warns, "Zoning varies from community to community. Zoning categories and classes are different for Lee County than for Sanibel and Cape Coral, for instance." A professional commercial real estate broker can provide assistance with this matter. Phil Deems of Phil Deems Real Estate in Cape Coral adds, "I suggest calling the City Hall Zoning Department. They are always very helpful and can answer any questions about zoning and parking issues." What kind of access is required? Traffic patterns and locations of median cuts are critical factors in determining where to locate your business. "Signalized access is best," says D'Alessandro, meaning that a traffic light is at the entrance to the facility. Do your homework. Observe how traffic moves in the areas you are considering. Determine where customers (or employees) will come from and how easy it will be for them to arrive at the location. The easier it is to get there, the more likely the customers will go there. What kind of facility is required? Most business owners know how many square feet, how many offices, how many conference rooms, and how much warehouse space. is needed for the enterprise. This information is best obtained by studying businesses that are similar to your own. For franchise operations, the corporate office will provide guidelines, too. In many cases, a "build-out" must be done to accommodate the specific needs for a business. Build-out simply means the walls and amenities that are inside the structure. You could think of it as remodeling, in a way. A business owner must be prepared to pay for at least part of these build-out costs. Sometimes the business owner is required to pay the entire amount. Make sure you understand these issues up front, because build-out costs can be substantial. Lease or purchase? The decision whether to lease or purchase your space involves more than determining what you can afford to pay on a monthly basis. Your company's financial strategy is the guiding factor in this question. According to Deems, "Ownership is the 'American Dream.' Ownership has many advantages: tax deductions for the interest, depreciation, no landlord increasing rent -- not to mention that you build equity in the property. "On the other hand," he adds, "leasing is flexible. Companies that are in a growth pattern may lease for one or two years to establish themselves. Then they outgrow the space and buy a property three or four years down the road." Cameron advises, "If you're a retail business and you're just starting out, you need to buy your cash registers, countertops, inventory and advertising. That's a major investment. Many times it's better to lease and use the available money on inventory and marketing." And, when a company is established, Cameron suggests the owners consider purchasing a building and then leasing it to themselves. "Most business owners direct their money back into the company," says D'Alessandro. "I see many owners selling their property and then leasing it back. Other owners are buying out their leased property. Small businesses like to own. Larger businesses and franchises like to lease and use their money for expansion." Guidance is available Although many business owners know what they are looking for in a property, there are many considerations, decisions and time factors that make it wise to work with a commercial real estate professional. "A real estate professional understands the nuances of zoning and access issues," says D'Alessandro. "You only need to deal with one person who knows the broad spectrum of what's available in the marketplace and can sift out the best opportunities." For several years, Cynthia Jackson was a director at NCR Corporation and AT&T Corporation. She is currently a freelance writer and co-owner of the Southwest Florida franchise for UCC Total Home, a nationwide buyers' cooperative.
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