Business owners who operate a retail space know that while commercial properties can be bought and sold like residential properties, the investment required to make sure a store is up and running can be quite significant. Unlike residences, where the building owner will repair broken plumbing or fixtures, lessors (owners leasing property) of commercial buildings only have to ensure that the building’s utilities are working. Anything else that goes awry, needs fixing or isn’t in working order will fall to you, the renter of the commercial property.
Remodeling commercial spaces is typically necessary to get the store into a condition that satisfies the renter’s business needs. Sometimes lessors will negotiate an agreement where they handle part or all of the remodeling costs. However, it’s also possible that the expenses for remodeling end up being the sole responsibility of the renter. This is especially true if you choose to renovate your existing shop halfway through your lease.
While remodeling always involves some time and money, investing quality materials and equipment into your commercial renovation will affect perceptions of your business. For customers, renovations hint at store success, brand culture and expansion. For employees, working in a modern and well-designed store fosters team morale and may spark greater interest from new job candidates.
While remodeling your brick-and-mortar shop may be costly, it can dramatically increase the perceived value of your store merchandise and brand over time. Here is a guide to weighing the costs versus the benefits of renovation:
Step 1. Determine What Needs to Be Done
While the remodel of an existing property requires a total demolition, check to see how much of your building’s existing infrastructure and framework you can use. You can often cut remodeling costs by keeping existing electrical panels, plumbing fixtures, load-bearing beams, gas lines and cable and phone wiring intact rather than replacing them altogether. If you’re looking to replace entire structures, then installing new flooring, ceilings and lighting may be more cost-effective for your project.
Step 2. Choose Your Team
Consult commercial contractors who can advise you on the latest trends, approaches and strategies for retail renovation. Find a reputable and reliable contractor who meets deadlines, as well as one who is bonded, licensed and insured. Angie’s List, a website that posts customer reviews on various businesses, is one resource that can steer you towards reputable plumbing, roofing and other commercial-building professionals.
Your team should be able to advise you throughout the remodeling process to ensure the right permits are processed; it can also guarantee management approvals are finalized and construction work is done according to health and safety codes.
Moreover, don’t be afraid to ask for help. Remodeling is a challenging project that requires many moving parts and pieces. Ask your staff to contribute ideas about the store layout and merchandise. Consider bringing in a facilitator who can effectively channel and gather positive and negative feedback that can be used by your contractors.
When doing this exercise, place yourself in the customers’ shoes to garner feedback about the shopping experience. Or even better, survey your customers on what they think about your layout before beginning the remodeling process. It can also help to take photos of the store and critique where improvements are necessary as the remodel is ongoing
Step 3. Establish a Timeline
Once you’ve assembled a building team that is serious about meeting deadlines consistently, develop a timeline to keep your remodeling project on track. A timeline will also guide you on when you should close and reopen your store.
Hiring a contractor who meets deadlines consistently and finishes your project on budget is essential for minimizing costs and losses from sales. One way to motivate contractors is to negotiate an early completion incentive, which provides them with bonuses for early completion of the project, but reduces the compensation the longer the project takes. Remember, every day you use to remodel your store also takes away days your store can be open to serve and sell to customers.
Step 4. Mock-Up Placement of Store Elements
Where will you place your store’s service area, cash registers and merchandise? Take some time to analyze the foot traffic in your current setup. Where are most customers congregating, walking and spending the most amount of time? Where do you want to funnel foot traffic, and how to do you want it to flow? Consider how to make the shopping experience more experiential rather than simply a chore. Then determine where to place different elements and attractions to create an ideal foot-traffic flow. Decide on the set of materials and colors you want to incorporate. Revise, revise and revise some more until you’re completely satisfied with the finished blueprint.
Throughout this creation process, keep your focus on enhancing, improving and reinforcing your brand. A store remodel presents an opportune time to revisit your brand image and positioning in the minds of customers and employees.
During the blueprint stage, visualize how the size and placement of fixtures, building materials and lighting will affect initial impressions and traffic flow to and from your store. Your contractor should be able to use existing measurements as well as sales forecasts to calculate the amount of space needed for areas such as fitting rooms, storage space and food bars.
What first impression do you want to create when prospects and customers glance through your window or walk into your store? Renovate your store to cater to these customers, and create a safe and comfortable space that shoppers can easily scan as they enter the premises. Design aisles wide enough to accommodate strollers if your store sells children’s items, and make sure shelving units are low enough for elderly or disabled people to reach.
Remodeling a retail space that not only expertly displays merchandise but is also accessible and convenient for your target audience will help increase foot traffic and enable customers to shop in a way that is logical to them.
Choose lighting that complements the mood and sounds you want to create in your store. To direct customers to featured merchandise, use track lighting in areas with low or dim lighting. For example, day spas typically create a “relaxing” and “warm” mood by building dim lights into custom cabinets and shelving units.
Color is said to have a powerful influence on our emotions. Thus, use colors in tandem with lighting and spacing that makes people want to shop in your store.
If your store is in the business of making, selling and serving food, then brown, red and orange colors are known to trigger hunger (think of the colors used inMcDonald’s or Burger King restaurants). Green triggers emotions around health and growth, which is ideal for stores related to wellness (such as Jamba Juice). Research the color schemes being used in your industry, or consult acolor forecaster on what colors you should use to complement new and future product offerings.
If you don’t have the budget or time to send drawings to an architect or color forecaster, websites such as Floorplanner.com can help you with this task. Floorplanner.com is free and provides 3D capabilities and editing tools to help you create and share the layout of your remodeled store.
Step 5. Measuring the Results: Was Your Remodel Successful?
Store renovations aren’t cheap. However, if renovations didn’t provide somereturn on investment, then businesses wouldn’t bother doing them. Measuring the success of your store remodeling project will be unique to your business. However, there are a few metrics you should keep in mind when determining your actual profit after remodeling.
First, factor in the initial cost of the commercial property to determine the amount you’ll need to make on the property after renovations. Then create asales target based on the location and average sales for similar stores. For example, you might set a target to generate $3.5 million in new sales for every $1 million spent on renovation.
Remodeling your store sends the message to customers that you’re willing to invest in your business to be on par or better than your competition when it comes to their shopping experience. The time and money required to properly renovate a commercial store can be daunting. However, by factoring in aspects — including location, contractor skill and cost, new merchandise and interior design — ahead of time, you’ll increase your chances of producing a retail space that will also increase your long-term profits.