Whether you’re a start-up business or expanding to additional locations, site acquisition is incredibly important. This includes not only site procurement, but equipment evaluation, determining the costs and benefits of a new lease, and more.
Sometimes companies get so bogged down in managing their current retail facility maintenance it might be tempting to cut corners where possible. Yet there are critical considerations to examine before expanding and/or establishing a new and profitable retail location. Your company’s P&L can be impacted both short and long term by decisions made at this juncture – don’t lose sight of what might seem like the small stuff.
Top Tips in Pre-Site Acquisition
In navigating the lease process, complete all necessary due diligence site surveys and inspections to identify possible short and long-term maintenance and repair costs. It can be tempting to try to move the process along, but trying to save time by skipping steps will only increase the risk of costly problems and expenditures down the road.
Every business is different, but any retailer with a storefront will have certain equipment, space and lease requirements. Essentially, there are some things you can expect any retailer will need so it's smart to focus on those first as you build a list of needs tailored to specific clients.
Identify and confirm the capital equipment at the location, and how it’s discussed in the lease, if leasing. At Royal Services we have seen first hand the importance of covering every aspect of equipment information in regards to the lease. It will vary depending on location, lessee type, and leaseholder, so never forget to concentrate on this step. This includes ensuring all equipment matches the inventory list and is up to date.
Consider the costs involved in obtaining the space, including rent/mortgage as well as possible upgrades or refurbishment. Complete a pro forma analysis accordingly in relation to your budget.
Anticipate maintenance and service regarding changing seasonal considerations. If the site is located in an area where humidity is an issue in the summer months, for example, plan ahead on HVAC maintenance.
Research the landlord(s) or holding company; check reviews written by previous clients / tenants, and pay close attention to descriptions of how the landlord(s) handled service requests, disagreements, lease extensions, and other issues from past lessees.
Confirm who is responsible for capital equipment maintenance: -Does the landlord / property management firm require you use to certain vendors? -Are you given the option of taking care of some things yourself, or are you required to report a problem then wait until the landlord/property management has time to address it? -Does the landlord/property management have a proactive approach to maintenance? For example, will they proactively complete scheduled maintenance to address equipment deficiencies before complete failure?
Is the site conducive to maintaining the consistency needed in your business’s branding and marketing? (i.e., If your stores have signature entryways where certain specific marketing collateral resides, does this new site have the room for this?)
Most Importantly...
Make multiple visits to the site before any decision is reached! No matter how great any company is on site acquisitions, visiting the site repeatedly is the only way to ensure you’ve covered all the bases.
Don't hesitate to contact us with questions on your site acquisition!
