FEATURED ARTICLE
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| "We're not trying to act as decision-makers. We're tyring to help the entrepreneur recognize the ramifications of going into this business."
Harold Moldoff of Score |
Knowledge first; site second
Have reasonable expectations when choosing where to open up
By Dan Tuohy
Published: October 2006
Retail - like real estate - is about location, location, location. But if only it were that easy: Pick a choice spot for a business, then watch the big money roll in.
As prospective entrepreneurs seek out the best digs, the first thing to do is to hone in on where you want the bottom line to go, says Harold Moldoff, a retired executive with nearly 40 years experience in the retail industry. You need to locate your niche, not just the street address or the zip code for a sweet storefront.
"What are you doing that's different? Are you specializing in a different theme? Do you know what it takes? Do you have the resources?" Moldoff fires off such questions to anyone interested in using SCORE, the free counseling service offered by proven business leaders. He has worked in small and large retail operations. He has worked for others and for himself. And in his experience, most every store poses its unique challenges when it comes to location.
One might land a special deal in an industrial zone or site, but how would you attract customers? If you are considering a prime, central location - say, Market Square in Portsmouth - will you be able to afford the lease? The pedestrian traffic is always impressive downtown, but what about parking availability?
With retail, one's background or knowledge of their business speciality is paramount, and it even comes before scouting locations, according to Moldoff.
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| "What Portsmouth is slowly coming to realize is there is so much more to the community than the four blocks around the steeple."
Dick Ingram, president of the Greater Portsmouth Chamer of Commerce |
The importance of location may be a tougher equation to crack in greater Portsmouth. Mayor Steve Marchand says Portsmouth's West End is emerging as a secondary downtown business community. That area's great variety of day-to-day amenities can compete with some in the city's center, at least for year-round residents. The northern tier of the city as home base for a future convention center would further diversify the retail industry, Marchand says, with convention-goers becoming what he loosely describes as "short-term guests."
"What Portsmouth is slowly coming to realize is there is so much more to the community than the four blocks around the steeple," said Dick Ingram, president of the Greater Portsmouth Chamber of Commerce, referring to the landmark North Church in Market Square. "There really is a very dynamic mix to Portsmouth." Ingram, too, mentioned the business growth in the West End, out toward the Fox Run Mall in Newington, as well as a rejuvenated Islington Street corridor, home to galleries, gift shops and professional offices.
SCORE counselors not only act as a sounding board for clients, they inspect site schematics and make site visits if necessary. They know the region's geography and demographics.
SCORE's Seacoast chapter was established in 1967 to provide counseling to small businesses and residents in Rockingham and Strafford counties in New Hampshire and York County in Maine. The Lakes Region of New Hampshire is now part of the chapter. Counselors are volunteers, and SCORE's assistance does not cost a client anything. Counselors work face-to-face, or online.
Moldoff, who lives in Rye, went to work at Filene's when he left the military in the 1950s. He entered Filene's management program, learned how to deal with customers and how to manage. He then went to work at Sears, where he completed a similar program. He went on to found and operate a chain of retail stores for eight years and was vice president of store operations for the Regional Discount Store chain for nine years.
As with a business plan, merchants need to have realistic expectations with their site or sites of choice. What are the fixed costs? Variable costs? Advises Moldoff: Be willing to consider other locales and consider all the options and pros and cons.
"We're not trying to act as decision-makers," Moldoff says. "We're trying to help the entrepreneur recognize the ramifications of going into this business." But they do not hesitate to lend an opinion, or to help secure a second or third opinion on any particular issue.
When eyeing a particular location, do some research on the local market and past tenants. Check out the turnover rate, if there is any such information available. Success often hinges on past experience, Moldoff says. If one does not have a certain background or past experience, he recommends they consider going to work for a comparable retailer to get on-the-job training.
"Go to work for a restaurant - see what it's like. Learn something," he says.
Moldoff says he has seen people who are successful with one store who then agonize over the decision to open a second store. "The danger is losing the feel of what's happening in the business," he notes. He says sometimes business owners can overextend themselves, whether it is physically or financially.
He cites a national statistic, that nearly 80 percent of restaurants fail within five years, as a sobering and staggering reality.
Again, he says, "We try to emphasize: Come up with realistic projections."
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