One of the initial uses of capital is to obtain a site for the new business. The opportunity to select from among several sites is not always available. When it is, however, numerous factors must be considered.
Size Size of the site must be evaluated in terms of how much area the business needs at the beginning and how much expansion is planned if the business is successful. A field nursery requires more area than a garden center, and both need more space than a retail flower shop. A landscape designer does not require much space to operate but would need a lot more to expand into a contracting business. Small sites that offer no room for expansion should be avoided if the horticulturist foresees the business eventually needing greenhouses, lath houses, or other production or storage facilities. Conversely, large sites should be avoided by small retail businesses. Taxes and other costs of maintaining a large site can be good reasons for not purchasing a piece of property that is larger than will be needed now or in the future.
Natural features Natural features of the site and adjacent areas are of special concern to production firms. Fertile, rock-free soil of good texture and drainage is necessary for a field nursery. Good quality air, available water, and ample sunshine benefit all production nurseries as well as greenhouses. Level terrain that is easily accessible and areas that are protected from harsh extremes of weather are also of importance for any production firm.
Garden centers, landscape nurseries, flower shops, and maintenance firms may benefit from the presence of shade trees, bodies of water, rock outcroppings, and other natural features that contribute to the aesthetics of a site.
Zoning regulations Zoning regulations determine what use can be made of a site. Some areas of a community may be zoned only for a residential development and perhaps for churches and schools. Other areas may be zoned for heavy industry, and still others for light industry or commercial purposes. Zoning ordinances may restrict expansion, regulate architectural style, or even specify landscape features. The zoning of an area can also affect the rate of taxation on the land and buildings. Careful investigation of the zoning patterns of a community and the frequency of zoning changes can prevent a site that seems otherwise perfect from becoming a liability.
Utilities Utilities must be on the site or easily installed to avoid high costs of hookups. Nurseries and greenhouses need adequate sources of fresh water. Everyone requires electricity, and special wiring or special forms of electricity may sometimes be needed. Oil, gas, or other fuel suppliers must be nearby and reliable.
Access Access to the site is of prime concern. The type of access depends on the type of business. A retail operation needs to be close to main streets and highways so that suppliers can make deliveries. Growers who wholesale their plants must be near highways and railways if the plants are to reach their markets. Equally important is access to the business for customers. A landscape nursery needs to be on a major road near the community of clients. A flower shop or garden center has the best chance of attracting impulse buyers if it is located along a major road where traffic is heavy and access is convenient. However, if traffic is too hectic, as at certain intersections, motorists may avoid stopping. One-way streets can also be bad sites if homeward-bound traffic is passing in the opposite direction on another street. Where walk-in traffic is an important source of customers, the store could benefit from a location along a pedestrian mall, in a shopping center, or even in a major hotel lobby.
Compatibility Compatibility of the new business with other businesses around it will frequently determine whether customers are attracted to the operation. Other businesses generate customer traffic. Since most retail flower shops, garden centers, and nurseries benefit from people willing to linger and shop, it is advantageous to be located among other businesses that cater to shoppers. Convenience stores that cater to a dash-in and dash-out trade do not make compatible business neighbors. Stores that serve customers who remain in their cars, such as banks and fast-food restaurants, make especially poor nearby neighbors.
Merchants’ Associations Merchants’ associations are common in retail areas and are often very helpful to new and established businesses alike. The members of active associations often share the expenses of group advertising, holiday decorations, security systems, remodeling, group insurance plans, and other items of collective interest. At times, as necessary, they can even work as an effective political lobby. In evaluating a potential retail site, it is worthwhile to ask nearby merchants about the quality and effectiveness of the local merchants’ association. Lack of such an association may indicate an area on the decline.
Lease agreements Lease agreements are usually required when land or buildings are rented rather than purchased. A lease should not be signed until the business operator has thought carefully about the future. If a long-term lease is sought, the agreement may need to permit expansion when needed. If another site is likely to be preferable when capital availability permits it, a short-term lease may be preferable. Any responsibilities of the landlord should be written into the lease agreement. Maintenance responsibilities are especially important, and the period of time for their accomplishment should be specified. If possible, an agreement that vacant properties nearby will not be leased to competing businesses should also be written into the lease.
Cost of acquisition Cost of acquisition is the final factor in the evaluation of a site. For some would-be business owners it may be the most important factor of all. The cost of the site should be weighted carefully against its advantages and disadvantages to determine if the price is fair or if another site is a better value.