If you ask today's youth about their future work aspirations, they would likely respond in unison that they don't want to work a regular job until old age. They want to find other pathways to wealth, such as starting a retail business or launching a small company. Of course, the first step in starting a business is to develop a solid Business Model and explore avenues for launching the venture. When it comes to popular locations for starting a business, the go-to choice is often the “commercial building”, commonly referred to as “shophouse”. However, not every commercial building purchased will guarantee a successful business. Otherwise, we wouldn't see commercial buildings left abandoned along the streets, which contradicts the theory that being located on a main road is always advantageous.

               

Now, let's take a look at what constitutes a good “commercial building” that can lead to a booming business without any setbacks.

 1. Prime Location with High Foot Traffic 

 

When considering retail or any business venture, “location” is always the top priority. This is especially true for commercial buildings, as the location must attract customers to the storefront. Therefore, you should focus on selecting a location with heavy foot traffic, situated in a bustling community. However, it's essential to survey the area to determine when it is busy and when it is quiet. If there is consistent foot traffic at all times, that's even better. Additionally, be cautious and investigate whether there are plans to build overpasses or underpasses in the area, as these could lead to a decline in customer visits, ultimately resulting in the commercial building becoming deserted.

 2. Easy Parking, No Guesswork 

 

Another crucial aspect of a commercial building is parking availability. When starting a business or even a small company, it's necessary to provide parking for customers or visitors. Therefore, before purchasing a commercial building, always consider the parking situation and the number of available spots. Many times, a location may seem ideal with high foot traffic, but it can fall short due to a lack of parking. Unless your building is adjacent to a subway station, in which case you should consider whether you can afford the price.

 3. Supportive Neighbors 

 

Some may wonder how purchasing a commercial building relates to neighbors. Well, nearby businesses can effectively attract customers. It's advisable to investigate what types of businesses are operating around the building you are considering. TerraBKK recommends choosing neighbors that operate businesses “similar” to yours. Yes, you read that right. Select shops that offer products or services similar to yours. Don't fear competition; instead, view it as the more businesses that gather together, the greater the draw for customers. However, the most concerning neighbors are those who purchase a property and keep it closed, using it solely for residence without operating a business, as this can further silence the commercial atmosphere.

 4. Open Facade, No Obstructions 

 

Having discussed the larger scale of location selection, let's focus on the finer details when choosing a specific spot. First and foremost, the location of the building you choose should not be obstructed and must be easily visible. Some may select a front position, but find it blocked by advertising signs, or it may be along the road but behind a bus stop.

 5. Corner Units are the Best! 

 

If you ask where the prime location for a commercial building is, the answer is clear: corner units are the best for running a business. They offer more space and, importantly, provide two storefronts, akin to having showcases on both sides (while other buildings only have a front). However, if it's a corner unit, it should be a corner with two visible sides, not one that is at the very end next to a project fence, as that would be considered an obstructed spot.

Another recommendation from TerraBKK is that there are currently various types of commercial buildings that are clearly distinguishable, typically falling into two main categories.

A. Old Commercial Buildings are those shophouses located along the street, constructed long ago. Most of these commercial buildings have the advantage of being on the street or within a community. In the past, when there was land adjacent to the road, it was often built as a shophouse. However, the downside is that the buildings tend to be old and require a significant renovation budget.

B. Planned Commercial Buildings refer to large-scale projects of commercial buildings or home offices that are developed as comprehensive projects filled with commercial buildings. The advantage of these is that they feature modern designs and aesthetics, but they are often not located on major roads, requiring customers to drive into the project to see your building. Therefore, when choosing to purchase a commercial building within a planned project, it's essential to select a location that is prominent, ideally in the first zone that people will see. Importantly, before purchasing, ask the project sales representative about what businesses the previous buyers have opened to assess whether those businesses are sufficient to attract customers.

All of this should provide a foundational guideline for selecting a commercial building to open a retail store. However, it is clear that the building alone will not drive your business; other factors such as Business Model, Product, and Marketing must also be planned before purchasing a building. At the very least, we want to ensure that the business plan you have meticulously crafted does not falter at the stage of selecting a shophouse for your venture. ---TerraBKK 

Article by: TerraBKK Investment Tips

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