While the age old maxim of, "location,
location, location," works to heighten the awareness
of how important location is to starting a gelato shop,
or galeteria, it is also a strategically useless bit of
advice. There are various factors that should be considered
in deciding on a location for a gelato shop which facilitate
the decision of where to actually locate the shop at. The
decision about location can be divided into two broad dimensions:
geographic location and site location and each comes with
its own set of criteria.
Any retail and food service business depends more heavily
on location than other businesses in other industries because
these types of operations must be both visible and accessible
to the general public. Typically, the type of background
research in identifying an ideal location for a gelato shop
is referred to as due diligence and it must be done. Due
diligence involves either purchasing the data oneself and
performing traffic analysis, demographic analysis, and a
review of existing businesses in the targeted area or just
purchasing or commissioning the analyses outright.
Business owners look for locations with high traffic (car
& people) generators such as existing large retailing
operations, industrial or office complexes, or colleges
and hospitals, for example. Although opening a gelato shop
in less densely trafficked and populated areas may be a
legitimate consideration, the business owner must recognize
in advance that marketing spend will increase in order to
attract customers to such locations.
Traditional business wisdom has always proposed that a new
business should enter an area where it has no existing competition
but this, in fact, may not be the best approach. There is
a school of thought that says a potential gelato business
owner should find the location of its largest potential
competitor and locate a site as close as possible to that
competitor.
The advantage is that because this large competitor has
most certainly spent vast financial resources on developing
their own market-based research on location and site analysis,
then the new gelato entrepreneur can piggyback in a sense
on this competitor's extensive market analysis.
Also, because the competitor is committing vast sums towards
generating its own foot-traffic, the new gelato shop benefits
indirectly from this advertising as well. If the gelato
business owner has faith in the quality and service delivery
of his or her products, then the rest will take care of
itself.
The other dimension for determination of location is the
actual location site analysis. If an area and building has
been located for the potential gelato business then it must
also be examined according to certain criteria. The first
and most important question to ask is, of course, if the
building is in an area appropriately zoned for a retail
food business.
Following this, it must be determined if the building can
meet the gelato layout requirements both in terms of current
business projections as well as future growth. Also, do
the building's utilities meet the business' requirements
such as heating, cooling, and plumbing needs to operate
a gelato shop?
And finally, another important consideration is determining
if the location is accessible not only to customers but
also to employees who might not otherwise visit the area
where the business owner may want to be in.
Using these guidelines as a template to build the analysis
strategy to source the optimum gelato business location
can mean the difference between success and failure. Location
is everything but the methodology in how one identifies
a location is actually much more important than just getting
out a map and pointing to an area as far from competitors
as possible. Due diligence is paramount to long-term success.
