Choosing a location
Compare two or three locations on footfall, rent and competition before signing anything.
6 min read
For a shop, a restaurant or a salon, the location decides more than any other choice you make. A good product in the wrong street struggles; an average one in the right street often does fine. And once the lease is signed and the shop fitted, it is the hardest decision to undo.
Start from your customer, not the rent
The cheapest shop is cheap for a reason — usually that few people walk past it. Before comparing rents, write down who your customer is and when they come:
- Office workers at lunch need you near offices, open at midday.
- Families shopping on a weekend need you on a market street, with parking.
- Students need you near colleges and coaching centres, priced for them.
- Neighbourhood regulars need you inside the colony, on the way home.
Then look only at places where that person already is, at that time.
Compare two or three places, on the same page
Never decide on one place in isolation. Shortlist two or three and fill in the same table for each:
| Check | Place A | Place B | Place C |
|---|---|---|---|
| Monthly rent | |||
| People passing in a busy hour | |||
| How many are your kind of buyer | |||
| Similar businesses nearby | |||
| Visible from the main road? | |||
| Parking or a stop nearby | |||
| Deposit and lock-in asked |
Count the footfall yourself
Do not trust the broker's description. Stand outside for an hour at the times your customers would come — a weekday and a weekend, morning and evening — and count. Count the people who look like your buyer separately from everyone else.
An example, with made-up numbers. Place A has 600 people passing in an evening hour, but most are hurrying to the metro. Place B has 250, but they are strolling through a market with bags in hand. For a shop selling to shoppers, B may be the busier location.
Competition is not always bad
Several shops of the same kind on one street — a sweets lane, a mobile market, a furniture road — means customers already come there to buy that thing. You compete for them, but you do not have to persuade them to come.
What to watch for is a street with one strong, well-liked competitor and not enough buyers for two. Spend an evening watching how busy they are before you open next door.
Do not choose a place because the rent is low and plan to "bring customers there". Moving customers to an unfamiliar location takes advertising money that usually costs more than the rent you saved.
Ask the neighbours
The shopkeepers on either side know things the broker will not tell you: how busy the street really is in the off-season, whether it floods in the monsoon, how the landlord treats tenants, and why the last business in that shop left. Ask them.
Rent as a share of sales
A rough discipline: work out how many sales a month the rent alone needs, using what one sale leaves you after its cost. If the footfall you counted makes that number look hard, the place is too expensive for your business — however good it looks.
The city report below brings together the economics of your city: where its markets are, who lives and works there, and which kinds of business suit which areas — before you spend a day counting footfall.