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John Crombie

Globe and Mail Update

There are good reasons why retailers stress over the address. Pick right and your business can take off even with a shaky strategy. Pick wrong and the best idea will tank.

The selection process almost always comes down to balancing the competing demands facing new businesses. Is it better to head for the safety of a mall or go for the unpredictable world of Main Street retail? Do you wager everything and locate next to your toughest rival, or opt instead for the terra nova approach? These questions are much like the one that many a home buyer struggles with: Should we buy the best house on a crummy street, or that fixer-upper on the best street?

Experts acknowledge that making a smart location choice often involves going with your hunches. But they warn that it's critically important to do your homework and then avoid the temptation to throw it all away for a low-traffic site simply because it's cheap and available.

John Crombie has been helping companies do their homework and make the right call since 1986. He is the Senior Managing Director of the Toronto East Suburban operation and member of the national management team for Cushman & Wakefield LePage Inc. Prior to his return to the Toronto marketplace in 2000, John was the Vice President and General Manager of the Royal LePage Commercial operation in Edmonton, Alberta.

Mr. Crombie was here earlier to offer advice and answer question on finding the best location for your business. To join the conversation, please click here. To read John Lorinc's article on location hunting in the latest issue of Report on [Small] Business Magazine, please click here

Noel Hulsman, Globeandmail.com, writes: John, thanks so much for joining us today. This is a really interesting subject, and for small business, a particularly critical one.

Years ago I had a conversation with a very successful coffee shop owner in Vancouver. In fact, business was so busy, his cafe caused Starbucks to pack up and move down the street. In any case, when asked the one big 'secret' to his success, he said that he didn't pick a location anywhere near his home. His only concern was to find a location that possessed the best ingredients for a café — pedestrian traffic, visibility, balcony space, etc. He believed that approach was fairly rare amongst café owners and restaurateurs who tended to gravitate to neighnbourhoods that they liked, or lived in, as opposed to establishing some pertinent criteria and employing some real analysis regarding the best possible location for their business. Is that fairly common?

John Crombie writes: Everyone has a different approach to their success of business and what is the best "mouse trap". We know of many restaurant owners and café shops who operate out of locations that are very close to their home and are quite successful (and some that have failed). Certainly, to be well acquainted with the area is extremely important to know if there is sufficient demand for your product. It really depends upon the customer you are trying to reach. There is no question that pedestrian traffic and visibility are some the most important factors is generating business and having a successful retail location. To say that it's best to be located as far from your home is not credible advice to everyone looking to opening a new retail store.

Noel Hulsman, Globeandmail.com, writes: I think his point was don't automatically pick a spot near your home, because it's so close by, or because you like the neighbourhood. In short, be as objective as possible about the location.

MT from Waterloo Canada writes: I can still recall my undergraduate geography professor repeat over and over again in class 'its all about location, location, location'. Indeed he was right. However, seeing that the modern trend in developing a business is pushing some towards starting, staying or moving on the web, what advice would you confer to those thinking about operating their consulting business from cyber space instead of a more traditional earthly address?

John Crombie writes: Your question really depends upon what you are selling and who you are selling to. Most people enjoy shopping and not having a store location could be detrimental in generating meaningful business depending upon your product. From studies in the industry, internet retail sales are still a very low percentage (something like 4%) of the total retail sales in Canada ... but they are growing. Some of most successful retailers develop a three tiered approach to connect with their customers - the store, the internet and a catalogue. People see it on the internet and then go buy it in the store. Or read the catalogue and purchase it online. You are reaching a larger market by this particular strategy as oppose to just relying on the internet.

WH from Toronto writes: I want to open a second-hand, consignment store specializing in antiques/home furnishings. I have over 10 years experience in this business-both buying and selling. I have written a detailed project plan, but I would greatly appreciate the opportunity to hear from Mr. Crombie on few areas including selecting a location for the business - do I open "next door" to the competition or start a "destination" location.

John Crombie writes: Clustering of similar type of retailers is very common in real estate and generally an easier way (or lower risk) to enter into a particular market. The customers already knows that they can find that type of product within that area. All you need to do is to provide better customer service, better pricing and a unique product line that can separate yourself from nearby competitors. I don't think you need to fear competitors. Burger King and McDonald have generally open up beside each other for years giving the customer greater choice. Becoming your own destination location can be very costly from a marketing perspective. It really depends upon your product. If it's unique enough (and in high demand), they will come where ever it is. Generally this is not the case especially for home furnishings.

JD from Markham writes: I would like to ask Mr. Crombie if he had any thoughts about selecting a location for not retail but for a dental clinic. As a newly graduated dentist it seems dental clinics are well saturated in Toronto and trying to compete is a difficult proposition. Any tips for selecting a location. Thank you.

John Crombie writes: Opening a dental clinic should be no different that the traditional retailer looking for that perfect location. You need to consider the surrounding population, pedestrian flow, parking capacity and demographic makeup within the area of interest. Visibility is key especially if you are trying to attract new patients from the local neighborhood however you can consider a less desirable location if they is an established office within the area and you can attract business to it through other forms of marketing. Also, always check the zoning when considering a location for medical and/or dental use. Some locations have restriction for these uses.

Noel Hulsman writes: Home or away, the debate continues ...

Adam Berel Wetstein from Toronto writes: Twenty years ago when taking my BBA, I did a empirical study of business relocation and was amazed to find that the most important deciding point was How close the office/plant was it to the boss's home. Do you think things have change much?

John Crombie writes: I like you question. Yes, I believe things have changed dramatically in terms of relocation decisions from 10 year ago. Companies are (or should be) more accountable to employees, shareholders and their customers. To operate a successful business, you need to consider a multitude of location variables that, if not carefully analyzed, could have a detrimental effect on long term growth. For example, one key factor with company's today is the attraction and retention of talented employees. Access to various modes of transportation (transit, GO, freeways, etc) is critical in today's decision matrix. Making it easier for the boss to get to work would be a career limiting move for any CEO.

Noel Hulsman writes:John, that's our hour. It's been a very interesting discussion. Thank you for your insights and your time today. We really appreciate it. Have a great weekend. Cheers.

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