CHOOSING A BAGEL LOCATION FOR YOUR BAGEL STORE By now I’m sure you know the three most important considerations in opening a bagel store…..”location, location, location.” But in my experience, many people who open a bagel store the first time make mistakes in choosing one. Rather than pick an ideal location they know is going to make it and they know is going to have the traffic and visibility – many people, especially when it comes to their first shop, will pick an inferior location because the initial investment is lower. True—an ideal location might require more work to build – perhaps more trench digging for the plumbing, or the electric may have to be updated. If it’s just an electrical panel that has to be changed, it might cost only a couple of hundred dollars, but if a new line has to be run in, it could cost thousands. Also structurally, when a store changes usage, the town often wants the entire building updated and brought up to code. Most landlords won’t pay for that, and you’ll be stuck with the bill for renovating. In fact, when you rent a premise, it’s most often “as is.” If there’s garbage in the basement, you have to clean it out yourself. If half the walls are falling down, you actually have to act as if you’re the owner by repairing them. You may be required to install a fire escape, double flooring, doubling sheetrock walling for fire prevention—any one of a number of things—all of which cost money. These costs will frequently discourage a new operator from taking a prime location, because that initial investment may run an additional $30,000 to build out, but what people don’t realize is that it’s only an initial investment. An experienced operator will tell you –“ I don’t care what it takes…if it’s the ideal location, I’ll put $100,000 into it, because I know I’ll do well, and it’ll pay off in the long run. But those are the voices of experience. The list goes on and on as to what could discourage a person from actually choosing the better location. Gas lines, windows—sometimes the store will have little windows, and you’ll be required to put a new store front. We often run into a situation where a new store owner finds a brand new shopping center with room for 50 stores but only 2 tenants are in – and it’s a perfect setup. It’s just been built. It’s a vanilla box – all painted, ready to go. Tile on the floor, or there’s no floor, which allows them to put their plumbing in before the concrete’s poured … and they’ll want the location because it’s clean, it’s up to date, and there’s no work involved, and no additional costs. But they’re in a shopping center that nobody knows exists! There are only two tenants there, and they’re going to struggle for five years before they start to make any money. My advice to people who are looking to open a bagel store is to take your time. Don’t be so pumped up, so ready to get started that you overlook the most important factor of all –location. How do you decide on location? Very simply, you must do your homework. One of the key issues is to analyze the early morning business traffic. You must have an idea who your potential customers will be. Will they stop on their way to work? Is there parking? The only way you can really get good answers to these key questions is to study the area yourself. Ask other neighborhood business people. Talk with friends. Discuss it with real estate agents. Ask other bagel store operators. And don’t hesitate to get professional guidance. If you can buy the building you plan on renting - go for it! You'll be paying the mortgage anyway for the landloard. In other words if your renting for 15 to 20 years you will pay more in rent than the cost of the building. In most cases... that is.... Before I wrap up this article, I just want to mention that there are a few other factors – in addition to location—that are required for a successful bagel operation. The most important of these, I’m convinced, is the quality of the bagels you’re baking—but we’ll save that until next time. You may reprint this article provided it stays intact and this message along with my email address and website are included. |
