Hitting a Homer (Conclusion)

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(Photo: ©iStockphoto/pkripper503)

Dan Miller |

Pick a location where customers can see you

DALLAS — One of the most common mistakes made by folks in our industry is poor store location. Whether or not we like to admit it, the most important factor in the success of a drycleaning business is where the store is located. A poor location can saddle an owner with unwanted lease payments and unprofitable stores.

In my travels visiting with dry cleaners, I’ve seen cleaners with terrific quality and service who are struggling because their stores lack visibility.

Likewise, I’ve seen cleaners producing terrible quality who are hugely successful because they are on the corner of two high-traffic streets.

Of course, it’s easy to know if you’ve found the right or wrong location after the fact. The question is how do you know you’ve found the right spot before you cut the check for the security deposit?

FIND YOUR ZONE

Once you know where you want to be. The question is, can you find a space?

At this point, finding a good commercial real estate broker can be extremely valuable. Specifically, it is good to find a broker that specializes in what is called tenant representation or “tenant rep.” They are plugged in to what’s available in your market and may also know of spaces that aren’t yet for lease.

Tenant rep brokers are paid a commission only if they find you a space, so they are highly motivated to find something that works for you.

If you’re not ready to hire a broker, sites like LoopNet can be helpful. LoopNet.com has an excellent search engine that allows users to search by ZIP code, type of space, price per square foot, and other characteristics.

For example, if you were in Chicago, you could search for retail space of between 1,000 and 2,000 square feet, in ZIP code 60614, with rent between $15 and $25 per square foot, and produce a list of all of the currently available spaces matching those criteria. You could then contact the brokers for the spaces and arrange a tour.

I also recommend driving the area. You’d be amazed at how many small-business landlords just put up a sign and wait for someone to come by.

CUSTOMER VIEW

Having a good list of locations in the right neighborhood is great, but unless your location appeals to your customers, it won’t succeed. Here is where you have to put on your customer hat and assess the location from the viewpoint of the customer.

Is the location on a regular commuter route? Are the location and signage easily visible from the road? Is the site accessible from both sides of the road? Is it convenient to enter the parking lot to park or to use the drive-thru? Is it easy to carry clothes in and out?

Ideally, the answers to all of these questions will be “yes.” If not, your customer won’t see that you’re there or won’t have a convenient experience when they find you. No matter how good you are at your work, they will leave if they find a convenient, comparable alternative.

REVENUE MINUS RENT

Most people in dry cleaning measure their rent as a percentage of sales and say that if you’re at 10% of revenue or below, you’re doing well.

Generally that is true, but if you evaluate locations that way, it will lead you into believing that a location that costs $25,000 in rent and does $250,000 in sales is as good as a location with $50,000 in rent and $500,000 in sales, when in fact the $500,000 location will be far more profitable.

A better back-of-the-envelope way to compare the available locations in your market is to estimate what you think the revenue will be and subtract the rent. Whichever location has the highest number is probably your best bet.

Finding a great drycleaning location is part science and part art.

There are never any guarantees, but if you follow these five steps, you’ll substantially increase your chances of finding a “home run” location and reduce your risk of striking out.

To read Part 1, go HERE.

About the author

Dan Miller

Mulberrys Garment Care

Owner and President

Dan Miller is the owner and president of the drycleaning service Mulberrys Garment Care located in Minneapolis, Minnesota, and also with locations in San Francisco, Calif. He can be reached at dmiller@mulberryscleaners.com or at 612-392-3770.

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