What to look for in a particular area

Location is of course the most important consideration. No matter how tempting your sandwiches and coffee, most people won’t travel far for their lunchtime food. They don’t have time and there are so many desirable alternatives on offer these days. It’s a buyer’s market and you need to be where the buyers are.

You have to be confident that there are sufficient people within easy reach of your chosen unit to provide a sufficient level of business. In this respect sandwich-coffee bars are different from quality restaurants. It is remarkable the distances people will travel in order to experience the delights on offer from the latest top chef. It seems to be part of the fun. With restaurants it is possible to set up in a novel location and, through advertising and word of mouth recommendations, build up business. This is not an option in the case of sandwich-coffee bars.

Your aim is to build up a clear picture of the good locations – the hot spots. This way, when you are serious about proceeding and ready to view premises as they come on to the market, you will know the ones that are likely to be worth pursuing. Why spend lots of time looking at places that are no-hopers?

Drive to different areas of town at different times of day especially lunchtime. Park the car and observe the scene – particularly near established sandwich bars. Bear in mind that the lunchtime rush for take-away food can occur at different times in different parts of the town or city. You will need to spend a fair bit of time at each location.

When considering a particular location there a number of key factors to consider; some obvious, some less so.

1 Is it busy?

Do the pavements benefit from what a nearby competitor of mine memorably described as ‘molten people’. Is the particular road an important artery which different groups of people have to use to walk from place to place? Will you thus have a captive audience? These are particularly important considerations for the passing trade element of your business.

2. Are there nearby offices?

The lunchtime office trade is an important factor for most sandwich-coffee bars in town and city centres. Remember people will not walk all that far for a sandwich, even a very good one. They might have as little as half an hour for lunch, so a few hundred yards can make a difference. The British climate can also make longer outings at lunch time hazardous affairs.

Do a bit of snooping around. You might discover the head office of a major company a short walk away. Great news! But if it has a good quality, heavily subsidised canteen it won’t be much help to you (though people do often fancy a change and a breath of fresh air).

If you see a site being redeveloped check with the planning authority to find out what it’s going to be and indeed whether they are aware of any other developments which might be happening in the near future in the area.

3. Are there some sandwich-coffee bars in the area already?

If not it is probably because there isn’t enough business. Given the massive increase in the number of take-away food outlets in recent years in numerous locations it is unlikely that you will break into virgin territory. In general it’s more important to go where the business is and compete with the existing operations on quality and new ideas. Having said that, if there are two or three established operations near your preferred site offering something very similar to what you have in mind you might well do better to look elsewhere. There’s no point in saturating the market.

There is something of the law of the jungle about it all. At any time there are usually one or two weaker beasts in an area ready to be preyed upon and picked off. It may well be the case that a nearby owner has been at it for quite some time and is longing to retire to Spain. He may not be up to the idea of taking on a whole lot of new ideas in order to compete with thrusting incomers. You never know, it might be you one day….

4. How good are the logistics of travel, delivery and parking?

If you live on one side of town and your favoured location is on the other, how do you fancy the prospect of driving across town, quite possibly in busy traffic, simply to get to and from work every day? If you have children, what implications will this have for the school run?

It may be that you will choose to produce some food in your own home (see Chapter Six). Do you relish the thought of making a number of return journeys every day in order to deliver bacon, salmon, cakes or whatever might be needed for lunchtime? Bear in mind that such journeys often have to be made under pressure of time; and what if you realise half-way to the shop that you’ve forgotten something vital, or left the oven on?

On the subject of delivery, what are the parking restrictions? All major cities are struggling with the problems created by ever-increasing traffic. In some, draconian restrictions have been introduced. This can mean that delivery vehicles, no matter how determined, find it very difficult to stop at various times of the day – often the very times when you want them to deliver, in the morning or later in the afternoon.

Bear in mind also that if parking is severely restricted during the day then passing motorists will be deterred from making spur of the moment decisions to pull up outside your place, no matter how enticing you have made it.

5. Location, location, location – think outside the box

From the first four points it will be clear that what you are looking for is a place where the action is, where the demand is and which is easy to get at. The trouble is this means you will be competing with other people for what are regarded conventionally as the best spots. It may well be unavoidable but it will mean that a lot of your precious start-up capital will go on simply securing your site. Sometimes a bit of lateral thinking can demonstrate the potential of places which on the face of it don’t quite achieve these ideal criteria.

Sandwich-coffee bars have, in recent times, opened in parts of towns and cities where previously they would not have been commercially viable; in neighbourhoods where in the past there was probably just the odd small baker’s shop or deli with a sandwich sideline. This has come about because of the general increase in demand for good quality food outlets, which has spread out from the town and city centres. So don’t think only of the obvious places: consider areas a bit further away from the centre. See if new ventures have started up and assess whether they appear to be thriving. Try to be a bit ahead of the game.

In addition, consider places which are near the best locations but perhaps a little way down a side street or even up a flight of stairs. If you can make a unit in such a location clearly visible from the street and if going there will only involve a customer in a very short, easy detour then you may get the best of both worlds: a cheaper property in a commercially viable location. It can also mean that obtaining permission for, say, restaurant use, is easier because there are not a lot of similar places in the immediate vicinity. Obtaining such permission can, of course, add to the value of your investment.

Our second shop was in just such a ‘yes but’ location. I was aware of it being on the market for several months before I actually bothered to go and see it. Even then I reckoned it was not quite right. It is in what might be called a tertiary trading location two miles from the city centre. It is not even in the main trading thoroughfare for the area.

My wife pointed out, however, that although it was a short distance from the commercial heart of the area its frontage projected from the shop next door – only by a foot or so but enough to provide space for a sign which would be clearly visible from the main road. Not only that but, although the unit was one of only two units in this particular road, it was something of an arterial route; parking was easy and the pavement was wide enough to allow some tables and chairs outside.

In the event we were the only people seriously interested and were able to buy the property at a favourable price. We have now been trading successfully from it for over three years.

This story illustrates another important point:

Even if a property is not in the very best of locations it can nonetheless do well for reasons specific to the particular area.

The shop is situated quite close to the main university halls of residence. In addition there are quite a few student flats nearby and our shop is situated on a road which many students use to go to and from the main campuses in the city. Students seem to like the kind of things we do and so we have built up a very strong following indeed from amongst their ranks. You could find similar situations with schools, large out of town office complexes or sites associated with tourists.

Beware – there are also drawbacks associated with such locations

There can be times of the year (in our case the student vacations) when you suddenly find that business drops off markedly. This can be extremely disconcerting to begin with. It really takes a full year of trading to get to know the patterns. This is important because it prepares you for the sudden changes which can cause staffing and cash flow problems. If you do decide to aim your appeal mainly at one particular group do make sure that your particular way of doing things is likely to appeal to them. Please excuse the sweeping generalisations but plain cheese sandwiches will not go down well with reasonably affluent students and sushi is unlikely to be the number one choice for people working on a building site.

There is another potential problem. The available market will inevitably be more limited than that in the city centre. If another switched-on operation moves into a nearby unit you could find that your turnover is quite badly affected – all year round.

Is market research appropriate?

Most large organisations would not consider opening a new outlet without first carrying out sophisticated market research at considerable expense. The purpose is to check market viability and, of course, that people actually want what you are going to be selling. If you wish to test the market directly it is unlikely your resources will stretch to this.

Asking your prospective customers

You will have to rely on your own ability to get information out of people in the area in order to assess the strength of the market. This is not for the faint of heart as it will involve approaching people in local offices and shops as well as people in the street. You might ask them:

• how often they buy food to take away at lunchtime
• what sort of things they buy at present
• what sort of new things they would like to be able to buy at lunchtime
• how long they can be away from the office
• how much they are prepared to spend
• whether it is important for them to be able to sit in
• any other questions which you regard as useful for the particular kind of operation you have in mind.

I must be honest and confess that although I did think about this before we opened our first shop I did not do it. I had lived in Edinburgh for 20 years and knew the city well. I simply relied on the other types of research detailed earlier. It’s difficult to say with certainty that such market research will be productive, but you’ve nothing to lose (except some of your precious time).

What’s more, you might just pick up a few comments which could avoid wasting effort on some treasured idea – and maybe even gain a slight edge over the competition. And if you include your findings in your business plan your bank will be very impressed.

There are two situations in which I think some form of detailed market research would be advisable:

• If you are new to an area. In this case there is a real possibility of going for the wrong place and finding out the hard way that it’s not going to work.
• If you decide to do a bit of empire building and open another outlet in a town or city with which you are not particularly familiar.

Help from other sources

There is a range of help available to assist you with market research. In the first place there will be local, publicly funded organisations set up to help and encourage small business start-ups. They will be able to give general information and profiles of cities and towns. They will come under the heading ‘Business Link’ (‘Small Business Gateway’ in Scotland and ‘Business Connect’ in Wales). See Chapter One for phone numbers. Once you have decided on a particular area or areas, in the bigger cities, they can refer you to local enterprise or development companies which can give more specialised information about particular locations. These services are all free. If you have any problems making contact simply phone your local council who will be able to help.

In addition you should speak to local estate agents specialising in small commercial properties and businesses. Remember though that whilst they will doubtless have the benefit of good local knowledge they will also be keen to dispose of particular properties on behalf of their clients.

Finally, if you really want to get under the skin of particular areas you can instruct a professional firm of market researchers to carry out a survey on your behalf. Needless to say such a service will not come cheap. You should check the Yellow Pages and speak to a number of firms in order to satisfy yourself that the service they provide is one you need.