You may already be in town when suddenly two other competitors show up. If you have established your reputation in the community, new competition may have little effect. On the other hand, it may be a warning signal that it’s time to move on. Sometimes a seemingly perfect location can be rendered bad by competitors moving into your market and shrinking your potential.
For example, in my second and most successful martial arts school, I was the only martial arts business in an affluent town of 60,000 people. There were thousands of families the perfect age and the Karate Kid movie part two had just come out. Not only that, but the school was also located next to Irvine Dance Academy. This business would not have been considered an anchor except that it had been there for 15 years and had an active enrollment of over 1200 little girls. While the little girls were dancing, their little brothers were looking through the window of my karate school. I’d invite them in to kick and punch a bag. More often than not, as soon as their mothers came looking for them, they’d sign up their sons. On the strength of location alone, a monkey could have done well financially.
Three years later, the situation had changed. The city had grown, several new shopping centers had been built, and the city boasted no less than 23 other martial arts schools. We were still doing well but the glory days of easy income without competition were gone forever. So when someone walked in out of the blue and offered to buy the business for a fair price I sold the same week. I moved to a fast-growing town twenty miles south and started over again.
Locations and shopping centers can also go downhill when the anchor tenant moves out, when gangs start hanging out in the parking lot, or when a new Walmart center opens across town. When you see the writing on the wall, start looking for a new location fast.
Don’t be oblivious to competition or changing conditions in your area. Good locations can and do go bad.
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