If you aren’t using a real estate agent, check the U.S. Census Bureau publications. The Census Bureau conducts a census of the entire population of the United States every ten years. They publish the results, broken down by zip code, in their census books, which are available in your local public library. Statistics are also available on the Census Bureau Web site at www.census.gov.
Often overlooked sources of demographics include real estate ads in the local newspaper. These can give you an idea of what houses are worth in the neighborhood. The local chamber of commerce or economic development office often has not only demographic and economic information for your area but also projections for population growth and economic development. Local shop owners can tell you about their clientele.
How big of an area should you research? That depends on your trading zone. Your trading zone is the geographical area from which you draw most of your business. The size of your trading zone depends on a number of things: what transportation people use in your area, how far they usually travel for goods and services, whether your area is urban or rural, whether it is densely or sparsely populated.
You can use at least three methods to estimate the size of your trading zone. If you are on friendly terms with another martial arts school owner in your city, ask him if you can interview the school’s students. Ask those students how long it takes them to get from their home or work to their martial arts school. Look at how far most of them travel. A few students, of course, are willing to travel great distances to study with a good martial arts teacher. Assume that those students will find you wherever you are located. In your interview, determine how far the majority of students are willing to travel.
If interviewing current martial arts students isn’t an option for you, talk to people in the neighborhood you are considering for your school. Ask them how long it takes them to travel to their grocery store, health club, bank, any place they go two or three times each week. If you are in a rural area where people commonly drive thirty minutes to a grocery store, your trading zone will be larger than if you are in an urban area where people walk to services. Get a feel for the travel habits of people in your neighborhood.
A third method for estimating the size of your trading zone is to begin with the estimate that your students will travel no more than seven to ten minutes by car from their home to your school. That is a ballpark estimate for a typical suburban American school. Ask yourself if your students would have good reason to travel farther. For example, is the nearest martial arts school more than fourteen minutes away from you? Do people travel more than seven minutes several times a week to get to the other stores in your complex? Do you live in an area where people expect to spend a half hour in their car to get anywhere?
Let’s say you’ve estimated your trading zone to be about seven minutes. How far away is seven minutes? That, too, depends on your area, the roads, and the traffic. Get in a car with a local map and a stopwatch. Drive the main roads that lead to your school, and mark off a seven-minute radius.
Then go back to your demographic sources. Within that seven-minute radius, look at average age, average income, disposable income, number of children. If you aren’t on a widely used public transportation line, look at the number of vehicles. The question you need to ask yourself is, “If I put my school here, could my target market get to it in seven minutes or less?” If not, either your location or your target market will have to change.
Beyond demographics, you will also need to check your competition before settling on a location. How close is the nearest martial arts school? Too many schools in a small area may decrease the number of students likely to sign up with you. While you’re checking schools in the area, look not just at martial arts school but at other sport schools—gymnastics, dance, swimming schools—aimed at your target market. They too are competing for the time and money of your potential clientele.
Find a Real Estate Agent
Once you’ve picked out a neighborhood, choose a real estate agent to help you find a space. Real estate agents serve two very important functions. Of course, they help you find a space that meets your needs. But they also can help sell the landlord on the idea of having you as a tenant. A real estate agent can be an important link between you and your landlord. But never forget that, though they serve you, they represent the landlord, the person who’s paying them.
Understand what you need before you engage the services of a real estate agent. Draw up a description of your business, including your marketing identity, a detailed description of your target market, and any special requirements you will have (high ceilings, ample ventilation, or floor space without pillars). A good real estate agent listens to you, finds out what kind of a space you want or need, and then helps you lease it. If your real estate agent skips the first two of those three steps, find another real estate agent. Although real estate agents’ fees don’t come out of your pocket, an agent can cost you if you let them talk you into a property that isn’t consistent with your image or your budget.
Look at several possible spaces. Even if you believe you’ve found the perfect space the first time you look at one, look at others. Contrasting several spaces will help you see what your first choice does and doesn’t have. It will also give you information you can use later in bargaining with your landlord.
Choose the Best Space
Once you’ve found a space you think might work for you, draw up a description of your business to give to the landlord or property manager. Include your marketing identity and the reasons your school will benefit their center. Also include reasons why your business is a stable one: cite contracts, long-term training schedules, other factors that increase student loyalty. Describe your target market, how they come to your school several times each week, how they get out of their car and walk past the other shops in the complex to get to your school. Talk about how students’ parents can be good customers for the center, how they bring their children to class and then often go to do errands or shop nearby. Describe how your cost per student decreases as your student population increases. In other words, make your landlord want you to move in. Doing so will put you in a better bargaining position when it’s time to negotiate the lease.
Once you and your real estate agent find a possible location, decide if it suits your purposes. Be sure your prospective landlord knows up front what you have in mind for the space. Then before making a commitment, be sure to check out zoning and legal requirements. Some cities have very specific zoning regulation limiting where retail and service businesses can be located. If you are looking at space in a shopping center, make sure your school will fit in with the overall image of the center. If your image is family oriented, you don’t want to be fifty feet from a biker bar or adult video store. If, however, yours is a kick-butt, kill-or-be-killed image, that location may work just fine for you. Consider how much walk-by traffic the center is likely to generate. Consider how many of the center’s customers will be in your target market. Consider how many of the store owners and employees will be in your target market.
Look, too, at access to the property. Can vehicles and pedestrians get to you easily? How is the traffic? Will your students be able to find parking during the hours you plan to be open? If people in your area use mass transit, how close are you to the train or bus stop? Is the walk to your school safe?
Then make sure the space is one that will draw people in. The key to drawing people is visibility, and the key to visibility is walk-by traffic. Do people walk past the windows? Driving by doesn’t count. People need to be moving past your school slowly enough to look in the windows, register what you are doing inside. Look at the other stores in the complex or the neighborhood. Ideally you want to be between locations people visit frequently—grocery stores, video stores, fast food restaurants. Granted, you will pay extra for a place with good walk-by traffic. But good walk-by traffic will bring people into your school. It may pay for itself and then some.
Look, too, at the size of the windows on the front of the space. A school with a closed-in atmosphere is forbidding. No sign or fancy window treatment will draw people in quite so effectively as the sight of people having a good time in an open, bright, clean facility.