I have heard some people say, "Hey, this is a good place to open a mail and parcel center! Let's do it." There are a few other steps to take before you jump-in head first.

BE SAVVY
My basic rule of thumb has been that a city needs at least 25,000 in population, depending on density and competition, with an average annual income of at least $35,000. All of the above rules also depend on your profit centers (services that you provide). These are the minimum statistics in our opinion, but that doesn't mean that less can not work if the business is established and operated properly for an area.

For example in our area, we do not open a store unless it is in a medium to upper-income residential section (average annual income of $45,000 plus) and with a thriving, growing business district nearby. A growing, vibrant business district nearby is key to obtaining customers for many retail packaging and shipping stores these days. Obtaining corporate customers proves to be a good determinate of success.

Some merchants are exceptions however, and I adore these savvy merchants who deviate from the norm. I have known some merchants who open stores in small towns which do not even qualify as a city, and they succeed. However, they do provide services that these lower income and/or small populations need, such as storage facilities, drive-up windows for retirees, and even selling auto oil. As you can see, you need to know your market, your city, what your customers will buy, and how you can support and attract these customers. In essence, do your homework or hire a professional to assist you.

RESEARCH THE AREA
Opening a store is a big investment, so do your research. First, you need to get demographics of the area that you are considering, and if possible, get demographics for two, five, and ten miles around the location. Usually the leasing agent can provide these to you, but try to get another source, too, for comparison. The city's Chamber of Commerce may be able to help you with this. In addition, call the major city's newspapers, and ask for a media kit. Tell them to include their readership demographics for the area around your store.

CHECK CITY PLANS
Next, check with the City Planning Commission or other sources to determine what the plans are for residential and commercial development. You may find that if you wait six months to a year, you can get into a much better shopping center. If this is the case, you can start working to get a lock on a space there. If you don't wait and open in an existing spot, a competitor probably will open in the more desired center.

Call the Department of Transportation, too, to get the scoop on their plans. We had renewed a lease on a store, and a few days later, the city put a median that blocked access into the shopping center from northbound traffic. The median appeared one day, and the sales literally dropped in half overnight. See Lease Negotiations below.

Did you find that the intersection where the center is located is one of the busiest in the city? That's not always a good thing, as we learned, since people may avoid your store because of the traffic. You should be able to determine whether or not this with your further investigations. Research the shopping center.

INVESTIGATE THE CENTER
Most of us open stores in shopping centers or strip centers.

Strip and Shopping Centers
We once had a store in a small strip center that had a consignment shop and a computer repair shop with it. This was a dynamite location for us, but we were at the right place at the right time.

Our opening day was the best we've ever had with any store, and it made money it's second month of opening, believe it or not. I think what made it so successful is that it had easy access from all directions of traffic; there was no competition within two miles; and it was in a very high-income residential area (old money). Also, there were several art galleries, antique stores, and other good sources of business near it.

As a note, "Old Money" is a group of people who are wealthy because they inherited the money. "New Money" is a group of people who made their wealth on their own. The two groups have different spending patterns, but they both see their time as money. Overall, both of these groups are seen as our good customer target market.

Again, please consider that this section mainly deals with opening in shopping centers, but the major points can be used for most types of locations. If this location was so great for us, why did we move it?

When business is good, you can count on competition moving into your nice, comfy, warm spot. The area started to develop even more, and a competitor opened two blocks away from us into a new shopping center that had a good grocery store, popular coffee shop, yogurt place, gift shop, along with all other sorts of desirable merchants.

Our landlord knew the area was growing and decided to double our rent, so we had to make a decision. Since our current location didn't fit the growing trend in the area, we jumped on a lease in another new shopping center one block from our old store. It has a specialty grocery store, major drug store, Outback Steakhouse, etc. People in the area were drawn to the new centers, and we retained our sales. This is called, "Growing with the Flow," in my book.

If your potential site is in an existing shopping center, carefully look at the types of other vendors that are in the center. Does it have a small discount shoe store and a dollar store? This usually is a bad sign, unless you want to focus on doing money orders and paying utility bills for customers. Also, we've found that if the center doesn't have at least one anchor (major chain store), that is a strike against it. Is there a nice grocery store, drug store, or other draw to the center? If so, this is good, since major chains that attract middle to upper-income customers tend to do extensive demographic analyses on what will work in an area.

Keep the size of the center in mind, too. For example, one of the best shopping centers here is so huge that it not only has a Wal-Mart, Barnes & Nobles, Michael's Art Supply, Rack Room Shoes, and many other nice discount stores, but it also has high end clothiers and furniture stores. This includes nice restaurants and delis, along with another hundred merchants. This shopping center is surrounded by upper-income residential. The packing store there has a prime location that is not near an anchor and therefore has somewhat decent parking for customers.

Power Centers
If you're looking at a Power Center, I bet that there is not much residential around it. Keep your fingers crossed if you decide to go into one of these!

A Power Center is one that has major discount merchants, such as Sam's, Costco's, B.J.'s, Pet Smart, Comp USA, Home Depot, Lowe's, Office Depot, OfficeMax, Staples, etc. You may "do okay," depending on the sources of business merchants that you can find and how you gear your business to attract them in order to make money. Don't bet the ranch on it, though. These power centers usually attract discount shoppers, and your neighboring merchants more than likely will have their own shipping system set. Again, only locate where you know you will have customers. In our area, I have never known of a packaging store that has survived in a power center.

Fine-Tuning Research
If everything looks good so far, and if it's an existing shopping center that you are considering, take at least one full day a week over several weeks to visit it. Talk to the other merchants in the center, ask for the owner or manager, and tell them that you are considering becoming a neighboring merchant. I've found that people always are more than happy to talk. Have on a "cheat sheet" of a list of questions handy. These questions include:

Go back to your car after visiting each merchant and make notes of their responses. It helps if you have forms with all of your questions printed so that you can quickly write your notes. Write their responses verbatim as much as possible. This will help with your final analysis. You need to determine who wants more merchants in the center because this will benefit the center and their business, and who is being candid with you.

As you sit in your car and walk around the center, always keep your eyes open to the parking lot. Does it appear empty or full? Are there times during the day when it's slow, then it gets busy during other times? Consider these points:

Go to the shopping center on different days of the week. Do you see any differences? Try to determine the reasons for any differences.

STORE SELECTION
Also, don't be so "picky" when you have found a fantastic shopping center, but the store doesn't meet some of the criteria that you had in mind. We were spoiled from our city's growth and great economy in the early years of our business. This was before we were surrounded by competition. We thought that we needed a back door to do large freight, and we passed on a great location. A competitor took the space instead. If it can fit through your front door, you can do it. If it can't fit, do you have another insured covered space where you can do the larger pieces of work?

In addition, we thought that we had to have a certain amount of square footage to have a thriving business. We later opened a store in a busy shopping center, which became our best store ever. We only had 750 square feet of space.

Let me stress this: Make notes of everything. Try to be objective when analyzing your data. Don't let your enthusiasm cloud a logical analysis.

STORE SIZE
For more information on what size store to consider, see the section in this book called Store Plan. This section is put under assets, since the store size depends on many factors which include what profit centers you offer. In essence, our best store was 750 square feet, but we were able to move large freight jobs to our warehouse. Our largest store that was easier to work was 3,000 square feet, and we did large crating and freight from this store. We consider the average store to be in the range of 1000 to 1900 square feet. Again, square footage depends on your profit centers. If you are going to offer self-service copying services as a core of your business, you need to have the lobby space, for example.

Let's continue with this section on research. Alter this for your situation, should you deviate from the norm. Please refer to the suggestions in Business Plan on how to do demographic research, too.

LEASE NEGOTIATION CONSIDERATIONS
One may have to sell a shopping center management company on the advantages of having a retail packaging and shipping store in their center. If you are a new, independent merchant, you may have to provide a business plan or part of it to get into a good center. If you are part of a franchise, then you may be able to refer the management property to the popularity and other specifics, such as name recognition, of the franchise operation. Independent merchants now have this recognition with the Neighborhood Postal Centers branding.

Make an attempt at negotiating price, too. This can be done by showing them the traffic that you can build in the center for other merchants and the popularity of the center overall.

Now look at the space options that you have. Yes, anchors are great, but if your potential store is too close to one, your customers may find that parking is too much of a hassle when they are trying to carry in packages into your store. If a close location to an anchor is your only option, then try to get a clause in your lease agreement that states that you will have dedicated parking space for your store and that these spaces are in front of your store's entrance. This always is not possible, but try to get it by discussing why this is good for your business.

Some mail and parcel center stores, as well as other quick service businesses, are able to get dedicated parking or at least signs that say, "15 Minute Parking Only." The center can post signs or can paint parking signs which say that parking spots in front of your store are reserved for your customers. This is important to your business, so try to get it by telling them how customers will be carrying packages into your store. Some properties will not give this to you, however.

Ask the center to require that merchants' employees park in designated areas. Otherwise, you may find employees who work at the store next to you are parking right in front of your store.

While you are at the lease negotiating table, make certain that you have a "move-out" agreement. This clause should state that if an anchor closes in your shopping center, then you can get out of your lease. What if you were the only store left in a shopping center because an anchor closed? Most customers will not visits a barren center.

Look at the property and what build-out, i.e., upgrading, you will have to do. Are you going into a used space that needs new flooring, carpeting, or walls? Is another competing shopping center offering more than the center you are considering? You have nothing to lose by asking for monetary discounts for this, but you may have a lot to lose by not asking. Also, the center may pay for the upgrading for you as a way of financing this. In essence, they may pay for it and then include an additional amount in your lease payment amount to pay for it.

If you are responsible for center upgrades and repairs, be sure that expensive projects costing over $2000 are spread over six to twelve months. If a center decides to repave the parking lot and demands that each tenant pay their share within sixty days, it can hurt a merchant financially.

Refer to this section in How to Open a Mail & Parcel Center: Tips from a Consultant for several other lease negotiation tips, store buying and selling tips, and much more. A table of contents for both manuals that come with this products can be viewed here.