top of page
  • Writer's pictureCalla Norman

How to find a brick-and-mortar location for your new business!

Updated: Aug 10, 2021

Six employees stand in front of the storefront of StarkFresh Grocery Store in Canton, Ohio

For many small businesses, whether a start-up or an established business, finding a new location to open up for business is an exciting yet daunting task. Before switching on the “OPEN” sign, there are so many factors to consider - location, budget, demographics, space, and so much more.

In this blog post, we dive into what you need to think about when finding a location for your business, and we talk to Tom Phillips, the executive director of StarkFresh.

StarkFresh is a nonprofit organization in Canton, Ohio that seeks to break down barriers to food access in their community. They operate nearly 7 acres of volunteer-run farm sites within Canton, run a mobile grocery market, and have various teaching programs to help promote food sovereignty in the region. Through their efforts, they’ve been able to provide 367,448 servings of food in the six years that the mobile grocery market has been in operation.

StarkFresh already had many successful programs including the cooperative farm and mobile farmer’s market, but they were seeking to establish a neighborhood grocery store in an area of town with no other access to good, fresh food.

Location is an important factor in relation to food access because the area they chose to move to was known as a food desert - otherwise known as food apartheid - meaning that there were no stores that offered fresh food within several miles’ distance. So, if you don’t have a car or reliable means of transportation, getting the food you need is incredibly difficult.

This is why StarkFresh’s project of opening a grocery store in this area was not only a great idea but a necessary one for the health of the community.

Once they found the perfect location, StarkFresh needed to take care of construction costs to make it properly outfitted for a grocery store. So, they ran a Honeycomb campaign which raised $22,900 to purchase walk-in refrigeration units, take care of construction costs, and stock the store with starting inventory.

“The grocery store is one of several things we do here [at StarkFresh], and all of them are designed to reduce barriers for someone to move forward,” says Tom. “It fits perfectly in the mold of not only what we do, but also what our Food Justice Campus was designed to be.”

So, how can you, a business owner, go about finding your ideal location for a brick-and-mortar? What even makes up an ideal location, and what do you do when you find it? Here are some tips and things to keep in mind when you’re ready to start looking.

What factors do I need to consider when looking for a location?

Proximity to complementary and competitive businesses

If you’re already thinking about opening a shop, you might already have a vague idea of the neighborhood you want to settle your store in. Is it densely urban, suburban, or rural? These factors will play into demographics, parking logistics, and much more. Take a minute to scout around and see what other kinds of businesses or institutions are in the area.

For example, if you’re a smoothie and health food bar, are there lots of gyms in the area, or perhaps office buildings full of young, active professionals? That might be a good place to start.

When StarkFresh was seeking out a location for a neighborhood grocery store, the area of town they were looking at was viewed by many as a pass-through section of town. All that was around were automotive shops and construction materials stores - not an ideal place for retail. However, Tom Phillips, the executive director of StarkFresh, knew it was a great location for the grocery store because of its proximity to the Cornerstone Transit Center, a bus station that accommodates 16 buses an hour and sees 150,000 monthly visitors.

“You have people coming through in cars who have no idea there’s anything around here. But, because the bus terminal is there, we see hundreds of people walking around in front of our doors, that car drivers don’t see,” says Tom. “It’s a pass-through area if you’re in a car, but if you’re on foot, it’s a gateway into all these other neighborhoods where people are living.”

In this way, StarkFresh was able to leverage the needs of their customer base with the realities of the area they lived in, and bring a much-needed grocery store into the neighborhood.

Demographics of the area

This goes along with our previous point of looking at the other businesses around, but another aspect of selecting a location for your business is looking at the demographics of the area. The age, income level, education level, and more of the people populating a certain neighborhood will factor into how successful your business is.

While StarkFresh has a mission of helping people living in poverty access fresh food and stretch their food dollar through the grocery store, they noticed that the demographics of customers coming to their store weren’t just people who were food insecure.

The grocery store is located near downtown Canton, which, like many downtowns in mid-sized cities across the nation, is quickly developing higher-end apartments for young professionals, along with the already existing high-rises that are populated more with low-income families. As a result, customers from various demographics and income levels visit the store.

“It’s created this strange mix where we need to carry things that traditionally those two groups eat,” says Tom. “Maybe the people in one demographic don’t eat quinoa, but they eat rice, so we carry both rice and quinoa. It’s that weird mix in that we didn’t know how it would work out, but it did. It’s always been a fun dance.”

Shelves of fresh fruit and vegetables at StarkFresh Grocery Store in Canton, Ohio

Interior of the StarkFresh Grocery Store in Canton, Ohio - funded by Honeycomb!

On a business level, it makes sense to ensure that you’re fulfilling a need for the people who live or work in the area. Have an idea of your target market, and find out where they are, and see if there’s a space for you there.

History of the location

We all know of that one corner in town where, for some reason or another, no business has been able to hold on, and as a result, it’s considered “cursed”. Why is that?

The StartUp podcast on Gimlet media has an excellent episode that goes into the history of one such location - “2680 Madison Road” in Cincinnati. This building, despite being in a decent, bustling location, has cycled through several different business concepts, from a car dealership to a sports bar.

The businesses at this location ended for many reasons - growing out of the space, problems with the owners, personal dramas (you’ll have to listen to the episode for the details, but trust us it’s a good one). While these issues may not have anything to do with the business or the location itself, the lore surrounding these places may not work well in your favor.

So, do your research! Ask around about what happened to the previous tenants - if they were a business similar to yours, maybe there’s some factor in the area that makes it difficult for that kind of business to thrive.

That being said, some entrepreneurs use the history of a location to their advantage. Whether they find an old warehouse, factory, or filling station to renovate for their own purposes, they’re able to use the history, the aesthetics, and the cultural importance of the previous business to fit into whatever their business is.

Must-haves vs. Nice-to-haves

When looking for a new location, you should have a list of the things that you must have, as well as the things that are nice to have for the space, but aren’t necessary.

Is a public bathroom a must-have? If your business is a takeout kind of restaurant, there’s probably less need for a public restroom than if you run a restaurant or brewery that encourages people to hang out for long periods of time.

Is parking a must-have? If your business is in an area with lots of public parking, then you might not need to worry about that. However, if you run a business where customers are spending an extended amount of time in your place, parking might be a must-have, or you might want to find a way to validate parking for your customers.

This is another time where you need to consider your target market in deciding what are must-haves. For example, as we’ve already established, StarkFresh depends on the foot traffic of people in the area coming from the bus station. However, the infrastructure of the neighborhood was less than desirable, and the sidewalks were sometimes too cracked to navigate, especially for people who are disabled.

One customer that Tom mentions was having a difficult time getting to the store because her motorized scooter couldn’t navigate the sidewalks in front of the store, and using the street was too dangerous. So, she contacted the city and they were able to fix the sidewalks, making the grocery store more accessible - which was a necessity for StarkFresh and their customers.

Customers lining up for one of StarkFresh's mobile farmer's markets outside of a nursing home in Canton, Ohio

Customers lining up for one of StarkFresh’s mobile farmer’s markets (taken before the pandemic)

I’ve found a place - now how do I pay for it?

What do you need now vs what can you add in later?

One misconception that many people have when looking for a new retail location is that they think it needs to be completely outfitted with what they need from the very beginning. If that were the case, nobody would move in anywhere, because no space is completely suited for every single business out there!

So, when you’ve found a place, take stock of what you need in the space for your business that you can afford right now, and what you could possibly hold off on adding in later. This is similar to the must-haves vs. nice-to-haves point, except in this case these are things that you have more agency in, and they almost always fall in the “nice-to-have” camp.

For example, say you’re the owner of a gym. Is a shower and locker room more important than having weights and cardio equipment? This would save you thousands on the initial buildout, and once you’ve been making a profit for a while, you can build it later.

Setting these priorities will make it easier for you to budget the needs of your business to its new location, and they’ll also provide you with a game plan for improving the space later on down the road.

Negotiate with the landlord

Often, it’s possible for small businesses to negotiate with the landlord in order to get a better deal on their lease. This is often easier if you’re working with an independent landlord over a large real estate owner, so that’s a factor to consider when looking at different places to lease.

While if you have the budget for a lawyer or agent who has more expertise in lease negotiations, there are some things you can keep in mind. First of all, you should be prepared to counter the base rent that the landlord starts out with.

Look for ways that you can cut down on the rent if they’re cost-effective for you. For example, can you negotiate a smaller base pay as long as you pay for utilities? Can you sign a longer lease for a smaller base pay?

A common way that business owners are able to save on rent is by including a tenant improvement allowance. This is especially a good idea if you know you’re going to need to renovate the space to suit your needs. Usually, this is a set dollar amount by square foot that the landlord pays while the tenant retrofits things. This is a good thing, especially if you need to customize the space, because it gives you more control over the renovation, and it’s a way to subsidize those improvements.

Look for other sources of capital

Unsurprisingly, it costs quite a bit of money to open up a brick-and-mortar location. It’s suggested that you have at least two years’ worth of rent saved up, as well as the money it’ll take for renovations, furnishing the store, and of course stocking and staffing it. With that in mind, it’s better to overestimate your needs rather than underestimate them, so you can have more of a buffer to deal with financially in case any unexpected costs do come up.

While many entrepreneurs dig into their personal savings to pay for these needs, and some go to banks or small business administrations for loans, one other way to seek out the capital you need to open your store is crowdfunding!

Crowdfunding can be used either to supplement or as an alternative to these other kinds of capital, but its benefits go far beyond unlocking the money you need to get your brick-and-mortar location going.

First of all, crowdfunding with Honeycomb Credit is a way that you can get the residents of your new neighborhood excited about the new addition, by inviting them to invest in it! The way a Honeycomb campaign works is that investors contribute to your campaign in expectation of receiving a return, meaning they’re now equally invested in your success.

This means not only will you receive the capital you need, but you’ll also improve your relationship with your customers - turning them from just regular fans to brand advocates. Meaning, they’ll be more likely to return to your business and advertise it to their networks, leading to more sales and more revenue for you!

Honeycomb crowdfunding can help you on your way to opening up your dream brick-and-mortar location

Whether you’re a much-needed grocery store such as StarkFresh in an area suffering from food apartheid, or a much-anticipated first brewery in a town that’s never had one (such as Swedesboro Brewing Company, another Honeycomb alum who raised $120,000 to open up a new location), there are people out there rooting for your new location to be a success.

Why not invite them in not only as customers but as investors? Sign up today to learn more about how Honeycomb unlocks capital for growth projects from food trailers to full-scale breweries.


bottom of page