Amanda Williams, owner of Liverpool-based fashion boutique Style Clinic, shares her experiences and provides advice on finding premises
"Location is critical to many businesses. Although I also sell online, finding the right location for my premises was key. I've worked in fashion retail for many years, so I know that location can either make or break you.
"You must focus on your target market and pick your location accordingly. We're on a busy major route, four miles outside Liverpool city centre. It's quite an affluent, residential area, popular with shoppers. Parking is good and we're well served by local buses.
In good company
"Another important consideration is what's nearby. We don't really have any direct competitors, but there are complementary businesses, which helps to attract customers. We're located above Toni & Guy the hairdressers, while nearby there other shops that are likely to appeal to our target customers.
"There are many bars and restaurants, too. Therefore, because we've invested in signage and have eye-catching window displays, even when we're closed, people can see we're here and make a mental note to call on us when we're open.
"Being located above another business has been beneficial, because it has brought us some footfall. And when we tell people where we are, they instantly know, because Toni & Guy is well known. We've spend a fair bit on the shop entrance and signage, because some customers were mistakenly going into Toni & Guy. It probably would be better if we were on street level, but because we're a specialist boutique, customers will go that little bit further to find us.
"All businesses must ensure their premises are safe and secure, but for those that carry stock, it's imperative. Ideally, seek premises with shutters, an alarm, ram-raid bollards and windows and doors with good locks. If not, a landlord might meet you some or all of the way with the costs. Also be sure to find out about insurance before you take on premises, because it might be prohibitively high.
"We installed ornate window bars as opposed to shutters, so passers by can see we're a boutique. It gives the store a nice Parisian feel, while providing security, too. We also paid for an alarm system to be fitted and we've invested money in decorating the interior.
"Obviously, image is important to a business like ours. You must create the right ambience and customers must feel comfortable. You've also got to use the space properly – trying to cram too much into too little space can put customers off.
"By spending a little, you can achieve a lot. We shopped around, bought from ebay, recycled furniture from home and achieved the desired look without spending a fortune. We kept the décor simple, because the emphasis must be on the clothes.
"When you're putting together your start-up business plan, work out how much you can afford to spend on premises. As well as rent, you need to account for rates, insurance, utilities, telephone, possibly money to decorate, renovate and make your premises safe and secure. It's important to minimise your overheads, but that doesn't mean going for the cheapest premises, they're probably not in the best spot. You have to pay more rent in prime locations, but if that means you attract more customers, it's a price worth paying.
"When you have an ideal location, before looking, ring a few estate agents to find out likely rent. That location might be beyond your budget, but at least you won't have wasted any time viewing. Ask agents for recommendations within your budget, but carefully weigh up all key factors before committing. If you are to avoid making bad decisions, carry out enough research in advance and focus on customers.
"Early on, we walked away from premises, because the landlord wanted us to take on a 'full repairing lease' rather than a 'schedule of condition' agreement. Basically, the occupant had been there for 23 years, and wanted to sub-let the premises to us for 18 months – the remainder of their lease. At the end of that time, under a full repairing lease, we would've been liable for any major structural repairs, which clearly wasn't acceptable. Involve a good solicitor before signing any lease agreements, and get them to explain details in accessible terms – legal speak is hard to understand."
Amanda's three key lessons
- Finding premises and getting them ready can take longer than you think, so leave yourself enough time.
- Don't sign up to long-term lease agreements. Negotiate breaks, so you can get out if the business doesn't work out.
- Push for monthly rent as opposed to quarterly. This way you can manage your cash flow more effectively.
This case study was first published in September 2009. Style Clinic has grown significantly and moved to new, larger premises in south Liverpool.