Over the years we have worked with tons of clients looking for that perfect space for their business. And of course, the first factor we consider in the search is “Location, Location, Location!” No matter the sector you are in, be it Retail, Hospitality, Medical, Office, Service, Industrial or otherwise, location is one of the determining factors of your success. Your Real Estate holdings can literally make or break your business. That’s why we wanted to get to the core of one of the top strategies to ensure your success – staying close to your competition.
A Competitive Advantage in Real Estate
It might be counterintuitive to stay close to your competition. Fear and anxiety usually ensue when I suggest it. Clients start stressing, “But Liz, are you sure we can be THIS close to our #1 competitor? They are literally a stone’s throw away! What if we can’t get any business, the market is saturated, people don’t come… ?” Well,
And here is the hard truth – Being the 1st to any market is a huge challenge and carries the greatest amount of risk, and potential reward. Being the last to enter is also challenging as you compete for limited supply in an over saturated market. Running with the herd, on the other hand, is what the majority of owners should be considering.
The word “Competition” leaves some people with a bad taste in their mouth. After all, if you have ever experienced Hard Core, Cutthroat Competition then you have probably felt the ensuing disappointment, pain, failure, and negativity associated with NOT winning. And who wants to be a loser? Not me! Many people can’t overcome these negative associations causing them to have a negative association with competition. These experiences lead people to think that it will be easier on their own, that there won’t be someone else competing with them. They won’t have to lose again. But they are wrong.
Your mathematical chance of success and survival in business is infinitely higher when you are close to your competition, and increases with your ability to LEARN quickly from your competitors.
Let’s go Primal, it’s the most natural example of the benefits of staying close to your competition:
- Animals: Do you think the sheep farthest from the heard or in the middle will get eaten first? Idealistic sheep believe they are safer eating all of the grass in their own lush green pasture, but statistically they are the fattest ones that are most vulnerable to the wolves.
- Athletes: Do you think the best athletes train with other athletes or by themselves? You better believe your favorite player is watching instant replays of themselves and their competition, studying them like a hawk, and working on their next strategy to get closer to winning the game.
- Masterminds: I am sure you have heard that you are the sum of the 5 people closest to you. If you want to be successful, you stay close to those who are doing well, who have a competitive advantage, who are where you want to be so you can learn from them, hone your skills, and Master your business.
Location Strategy is exactly the same. You WANT to be as close to your competition as possible.
What Do Music Row, Green Hills, Capitol Hill and Berry Hill all have in Common?
They all have clustered, location based Identity. They have a sense of Architectural and Geographical “Place” that extends to the types and subtypes of Commercial users that occupy each area.
Music Row was named for the many recording labels and production companies that set up shop right on top of one another, on the same street nonetheless. Can you imagine how Nashville would be different if businesses didn’t want to compete for our top local music talent? Did you hear of the recording studio across town that was bringing in the best talent? Nope. Because they didn’t.
When you go holiday shopping, do you go to the Mall and hit up all of the stores or do you go to independent one off shops around town each day of the week to procure the perfect purchase? The majority of people go to the mall. You should probably strategize your retail store location to be close to other retailers, especially if they are selling similar or complimentary items to what you are selling.
Retailers are of course the #1 business type affected by Location strategy because their income is directly proportionate to the value their Real Estate holdings bring to their business in the form of product sales. The foundation of their income model depends on it. Even online, we see the most successful retailers staying close to their competition. They use similar marketing, checkout process, and branding strategies to catch consumers looking for their products. Yes, Success!
Now you may be thinking, Green Hills is waaay too expensive for your startup luxury business. I would challenge you to assess how other businesses are affording those $50 – 60 + / SF lease rates and then structure your revenue model to do the same. I would meet with the luxury brands dominating that market and see if there are opportunities for your niche brand to do the same. Hello – We believe “There is Opportunity Everywhere”, and you should “Figure out your Financials 1st”! @SouthernAthena #corevalues
Have you noticed the majority of Attorney offices are located in the downtown core close to Capitol Hill? There is benefit in staying within an identifiable area, one that people associate with your service, industry or identity so that they can easily find you. AND there is usually a bigger Reason for these professionals to all be in one area, like access to court, or in Industrial cases, access to distribution.
Berry Hill is even now known in interior design circles as “Designer Row” due to the large amount of vendors selling architectural and building related products and services. I can spend a half day completing Architectural Specifications of flooring, tile, countertops, cabinets and lighting for clients, meet with my Engineers and pick up supplies all within a mile of a central point.
And guess which Tile business on the map above has the most reviews – Stone Source with 152, in the center of all of it’s competition. I bet we could aggregate the strength of the other tile businesses based on how far away from this central point they are located. And then you will also notice, that there are not other Tile companies located in the surrounding areas…. Hmm, Wonder why?
Innovators Unite! We can Find Your Unique Brand the Perfect Location in Nashville
Many of our clients are Innovators and the first to their market. That is because Innovators love us. We have the competitive advantage of being able to come up with creative solutions that others overlook. I have helped countless companies in unchartered territory find their perfect place even when there is no competition in the market at that time.
One client, Float Nashville, was the 1st to bring float therapy to all of Tennessee! Bam! Try convincing Landlords to allow your client to put +2,000 lb tanks of salt water on their property when they don’t understand the concept, let alone how it would make money. Well we did! Our location strategy for Float Nashville capitalized on one of the owner’s existing books of business in massage therapy.
We stayed within a 1/2 mile radius of her previous business to prevent attrition and to help them enter a new to market industry that required a ton of time and energy for client education and awareness. This was the perfect Hybrid strategy to limit their risk and increase their reward. (Pssst, we also provided the technical drawings required to get state approval of the spa pack system used to ensure safety and sanitation of the tanks.)
The local massage therapists, physical therapists, and chiropractors along with existing clients could now use the tanks as an additional offering to compliment their healing therapies. There are now over 5 more Float Tank centers in Nashville. And Float Nashville still holds the most market share. It has been so successful they have since expanded their innovative offerings opening a second location with us in Murfreesboro, Float Alchemy, this past year.
Remember when “Vaping” hit the market? It seems that overnight vape stores where popping up on every corner when just a month before no one even knew what a Vape pen was! Similarly, we have recently been contacted by a slew of new CBD Hemp business owners hoping to set up shop. Ross and I did the research and suggest our CBD clients position themselves close to the creative class (users) and medical / wellness centers (competition) so practitioners can refer patients with pain and chronic inflammation to their stores. Within 2 months time there are 4 CBD shops opening in East Nashville right on top of one another. Everyone assumes the demand must be there. Let the competition commence.
There is no wonder though that most of our Medical and Wellness based facilities are clustered close together. When my Aunt with MS comes to town for doctors visits, she can make back to back appointments with each specialist without having to go too far. How easy. The specialists geographically closest to the referring doctor or physician often benefit the most and get a boost in business as people travel to Nashville for our amazing health care opportunities.
Find a Competitive Edge with your Real Estate
Now you may be thinking, hey, I don’t entertain clients or have a retail presence, why do I need to be close to my competition? This goes back to access to like minded businesses and capitalizing on location based “synergy”.
You will naturally hold more market share just being in the same building as like businesses than if you are on an island by yourself. And therefore you will be better able to grow your business faster and with more success than those going it alone.
People are naturally attracted to other like minded people (It’s a hard wired safety thing left over the years in our DNA). Your business location and the culture of that place and/or neighborhood is one of the determining factors in how quickly you can then bridge the cultural gap with clients and other competitors so that the entire community thrives. The rise in popularity of co-working spaces is a beautiful example of this principle in action.
We worked on a remodel with a State Farm Agent – Jeannie Gregory who was worried about a competitor Insurance agent opening up shop across the street. She wanted to remodel to help distinguish herself and her offerings before he “poached half of her business”. Well, he opened up shop, but did he put her under? Not at all! She has more business than ever because she is unique.
Often, even in niche businesses, you have an opportunity to distinguish your offering just enough from your competitor that consumers will be forced to choose their preference. If I have a need but don’t totally jive with business A, now I can go to business B across the street and still have access to that niche product and service. It’s important to gain a competitive edge with your Real Estate, and it has to do with location and distinguishing your offering from the competition. Corner lot anyone?
Real Estate Strategy and Economics
Okay, so you may be thinking that a location we suggest is just too close for comfort. You don’t believe the market can handle adding yet another “insert your business type here*. Well you may be right, but let’s look at the numbers 1st.
I’m a huge math nerd. I freakin’ love Math! (History on the other hand… let’s just say you should not pick me for your Trivia team.) In 8th grade I won 2nd place in a national championship for playing a stock market game to make the most money. I invested strategically in up and coming companies that where undervalued and found out within a year I would have been a millionaire if the $1,000 invested was real. Dang, maybe I need to rethink my investment holdings…
I am also that strange person who really enjoyed Calculus and dominated my Economics classes. I entered college with all of the base and advanced math credits needed to graduate before enrolling and strangely wanted more.
Let’s just say, “Strategy is my Specialty.”
And it is in my blood, all 3 of my siblings and father are Engineers. My older brother has developed his own board games for sale. My younger brother is freakin’ data analyst for goodness sake. My sister and father work in Health care analyzing medical facilities, staff, processes and efficiencies.
Staying close to my competition was the only way I survived family game nights. And my sister is the Queen! She usually keeps score, which means she has her eye on the competition more throughout the game and can adapt or change strategy to pull out a win.
There is something called Nash Economics and it relates to game theory and how certain decisions can ensure certain outcomes. If you are playing to win, there is a point where you should be to guarantee that outcome. Poker players use nash equilibrium theory to strategize a win. Businesses use it for their location strategy, and you should be using economics more than your intuition when you are playing in Real Estate.
Basing your Real Estate Strategy on your Feelings is a sure way to Lose Money.
Your Real Estate holdings should be treated as a financial Investment more than a passion project. Though I am a core believer of passion, it doesn’t always pay the bills. Real Estate should bring value to your business or portfolio in tangible numbers. Yes, feeling good about a space and fit for you and your business is important, but the decision to Buy or Lease isn’t like that shirt you are trying on, Real Estate Location Strategy is about data and proven models of success. And we are here to help!
Still can’t decide on a location? Check out our Property Decision Matrix in our Resources.
Are you looking to Invest in Nashville Real Estate? Contact us today for insights and Exclusive Representation for your business’s next location.
We will help you WIN with competition, gain value from your Real Estate holdings, and boost your business income to a new level all while continuing our mission of “Building a Beautiful South”. We encourage you to work with us, invest in Location, your local community, and healthy competition. Let’s do this!
Photo Credits: And as always, thank you to our photo sponsors – Harris III with Story Gatherings for his “Fear is a Liar” inspiration board we saw every single time we showed his property FOR SALE in East Nashville (It really hits home in the work we do.), to Leonardo Sanches for the “Eat, Drink, Sing Repeat” photo on Unsplash, and to Float Alchemy for their beautiful “Massage Therapy Room” photo.