need some advice

[system]

I’m looking to open a 3rd location. The building I’m looking at is within walking distance of a division 1 university that has around 20,000 students. There is a lot of foot traffic in this area. There is an on campus sports facility that averaged 23,000 fans for basketball games this past season and gets around 47,000 for football games. The building is on the street that the majority of the fans walk up to get to the games from the parking areas. There are some college bars and a campus shopping complex next to it. There are two other pizza shops in the immediate area. There’s a lot of high rise building including 2 large hospitals in the area. The demographics are: 60,301 occupied housing units within 3 miles, 9,112 houses within 1 mile and 89,111 occupied houses within 5 miles. There are 108,367 employees in a 3 mile range. I’m going to be contacting the company that owns this building tomorrow. I figure that the lease payment will probably be around $2,000 a month. So what do you guys think about this location? My major concern is how will business be in the summer when most of the students have gone home? Any opinions on why I should or shouldn’t consider this location would be greatly appreciated. Thanks. -Roger

 

[system]

hey first save ur money from the good times to last u over the bad, have a great product so that all those fans say, hey lets go get a slice bfroe the game so we dont have to eat during the game!!! and second 2,000 for a location like that, doesnt sound bad unless its like 500 sq ft

 

[j_r0kk]

Roger writes:

So what do you guys think about this location? My major concern is how will business be in the summer when most of the students have gone home? Any opinions on why I should or shouldn’t consider this location would be greatly appreciated.

Campus stores can be tricky. If your location is frequented mainly by students you can naturally expect lower dine in sales in the summer months and break periods. It would be a smart decision on your part to consider the delivery side of this business for this store so you won’t get as big a lull in June, July, and the first part of August. A solid delivery base will get you over this hurdle when students leave. And, of course, when they come back your sales should be better than ever.

This is the nature of the business when it comes to campus stores. The smart thing you can do is strategically target the 60,301 homes during the summer. When school commences in the fall, keep targeting these 60,301 homes but also step up your campus marketing. Ask any campus store owner/manager. The students are their icing on the cake. What separates good stores from mediocre stores is what they do with the residents who live in the delivery area year round.

-J_r0kk

 

[system]

Thanks guys for the advice. Mike, the building is 1300 sq. feet.

 

[Patriot_sPizza]

ran a college store several yrs ago…can be tricky when class is not in session…

you really need to develop a neighborhood marketing plan to keep your business steady 24/7/365

 

[system]

I went and met the owner today to look at the building and get all of the information. The scenario wasn’t as good as I was expecting it to be. The owner wants $3,800 a month for rent + $1,600 a month for land taxes. This money doesn’t include garbage pickup, etc. The size of the building is actually 1,080 square feet. It seems like a really good location but $5,400 a month is a lot of money for rent. It figures out to be $60 a square foot which seems pretty outrageous to me. If I could make $16,000 a week then it wouldn’t be an issue. The hardest part is that I really have no idea how much money I could expect to make at this location. It previously was a Quizno’s Subs and all of their equipment was left in there. I asked if it came with the equipment and they said no but I could buy it all for $45,000! Do you think it would be possible to make it at this location with the rent being $5,400 a month?

 

[wa_dave]

Roger:

Do you think it would be possible to make it at this location with the rent being $5,400 a month?

I know I’m not in the US but we pay that amount of rent (or a little more) per month which includes taxes and utilities. It is definitely very hard to make ends meet at that rate. We do around $8K+ to $9K+ per week which gives rent as 16% of sales, but this is the going rate for rent here in Western Australia. Our shop is 120sq metres which is about 1200 sq ft.

With this amount of rent you need to get to similar figures to keep head above water let alone make money.

I always stop and think why did this food shop in a busy location close and the building remained vacant? Too much competition? Couldn’t get sales to cover rent?

We get by with our high rent and other higher costs (wages, equipment - hey just about anything) than what I read you guys pay in the US but there isn’t much fat left on the bone for me to chew on.

Dave

 

[Patriot_sPizza]

too high…I’d pass…

 

[system]

Those demographics are awsome! I don’t understand how they can come up with $20k a year in land tax though (1.6k x 12). That is way outa the ball park.

$45,000 for a bunch of used equipment? Tell them to get rid of it for you, and the chances are very good that it will drop in price dramatically.

I didn’t see any mention of competitors. Who is in town, and what are they doing in sales volumes? Sit outside and start counting warm bags. That will give you a pretty good guage of how they are sitting, and where you will be after you open. Basically take the competition’s volume and knock 20% off and run the numbers. If you can make it then by all means go for it.

From the appearance it looks like a decent $20k a week shop if you are a domiclone.

 

[system]

Right now there are 3 other independents within the immediate area. They are all located on the same block right around the corner from the building that I’m looking at. I’m going to take your advice and go scout out the competition this weekend. How long should I count warmer bags for? I figured I would go and scout Saturday night, then Monday night (to get an idea as to what kind of business they do on a slow night), and then Wednesday afternoon to see how they do at lunch time. If they location can do over $10,000 a week I will definitely consider it. Thanks for everyone’s advice, I really appreciate it.

 

[system]

I love campus pizza places. Everyday I try to convince the wife to let me move back to my college town as I have some great ideas for there. The pizza place I worked at in college did $30k a week in sales and looking back that place was very poorly ran.

The sky is the limit on a campus. However, college kids are very annoying customers. You should still be a college student in heart if you want to do this. So many stores fail at that.