5 Key Steps of Home-based Businesses, Part 5: Anchors Away!
During this five-part series, we looked at ways a small home-based business can make educated decisions in moving from start-up to mainstream. We’ve covered “Look Before Leaping,” “Ready, Set, Start Up,”Keep on Tracking,” and “Growing with Magic Beans.” Now, we’re ready for “Anchors Away” – taking that leap in moving the business from home to another location.
This step is easy for some people because they are risk takers and they have that undying attitude, “It’s only money.” However, for others, it is a scary step to take, primarily because monthly expenses will immediately double and their stress levels will change. Depending on where the business is located, the owner has to consider drive time, janitorial services (usually that means that the owner stays longer to clean), security, insurance (liability as well as theft and fire), deposits (rent, utilities, telephone), and the normal monthly expenses like rent, utilities, advertising, supplies (labels, bags, sales receipts, shipping, sales notices, adding machine or register rolls, paper towels, printer paper and ink, and the list goes).
Before making the decision to move away from home, know your break-even point in the new location. How many sales are needed to cover all expenses? Then, do an analysis to decide if the move is going to be more profitable.
Once the decision to move is made, be prepared to market, market, and market the business. Also, try to get as much free advertising as possible. Prepare a news release for local newspapers announcing the new location, hours, and business description. Next, make sure your customer base is well informed. This would be a good time to offer a promotion (moving sale or discount). Depending on the business, give out flyers or brochures, business cards, and sales notices to new neighbors. Ideally, you want to get more “bang for your buck,” so, using as many free to low-cost strategies as possible (cross promotion, banners, magnetic signs on personal and business vehicles, and face-to-face contact within the area) can be beneficial. I remember when SAM’s Club first moved into our area, they sent representatives door to door showing businesses what they had to offer. Most of us find cold calling difficult, but it is the perfect opportunity to let the business community know about our services and products. As a consumer, I always want to know what new offer is available in my neighborhood.
Once all of the free advertising is out of the way, consider your marketing budget and invest in local ads that will target your particular customer. Other important considerations are:
- A Lease – be sure to have someone trustworthy read it and catch anything that could be costly in the future (like paying for the air conditioner or heater installation, paving and maintaining parking lots, servicing heaters and air conditioners, minor repairs, pest control). Believe me when I say I have seen clauses that required the occupant to pay for all of these and more. Also, be wise not to make the lease too long. This can be deadly if the economy takes a dive or local changes impact your location.
- Telephone Directories – be careful about paying for large unnecessary ads. Again depending on the business, a small one-line ad may be sufficient. Some businesses will require a larger ad but remember that as a consumer, we are drawn to color (red especially), pictures, graphics. I have seen large ads that are overfilled with text and hard to read. Most people bypass those ads first. Directories can be very expensive so do an analysis of again where you will get “more bang for your buck.” A man, I know, paid for a small one-line add in color and used billboard advertising. He said that it cost less than a larger ad in the directory and the response was terrific. However, be careful about billboards. It is not always possible to guarantee a billboard will reach a particular targeted market.
- Parking – make sure there is adequate parking for customers so they will not be inconvenienced. It they are, they may not stop.
- Location – traditionally one-way streets are not good locations, depending on the type of business and frequency the streets are traveled. Visibility is important, especially for drive-by traffic. To draw attention to your location, be sure the business can be seen from the street, within the shopping center (if applicable), and where walk-in traffic is important. If the business does not rely on drive-by or walk-in traffic, it should still be clean, safe, and professional. It is fine to share a space with another business but make sure the business reflects well on yours.
- Hours – set hours and stick to them. There is nothing more frustrating to a customer than to make a special trip to a location and find it closed.
- Signage – be sure it is professionally created (no homemade signs) and visible. A sign too short, too busy, fancy fonts, and too small are lost on a traveler who has possibly one minute to read a sign before passing it. A tattoo business should have a large, visible sign that says “Tattoo” for passersby, but can put creative, fancy lettering on the front of the shop or in the window. Once the customer pulls into the parking lot, they can be “wowed” by the artwork.
Like any important decision you make, caution should be your guide to moving into mainstream. Once that decision is made, ensure, to the best of your ability, that people can find you and know what you offer. Grow the business slowly so that it can be easily managed and track what works well so it can be repeated. The move into mainstream can be rewarding while taking the business to another level in growth and security. Good luck!