Following are the highlights from an expert panel on leasing, finance and small business presented by ICSC (formerly the International Council of Shopping Centers).
Highlights from the Small Business Panelists
Geoffrey Meeker, Owner of French Truck Coffee
Geoffrey Meeker discussed the challenges and benefits of pivoting to brick and mortar from a food truck format and using technology and automation to reduce human error in his business by, for example, allowing him to remotely monitor coffee brewing. He stated that his biggest mistake in the business was failing to “hire slow and fire fast;” he felt he should have looked outside of the organization more for hiring.
Eric Van Hoven, Vice President at Gulf Coast Bank and Trust
Eric Van Hover emphasized the value in decisions being made at the local level at community banks like Gulf Coast. He stated that borrowers trying to pitch their ideas should clearly communicate their plans and showcase their own or a mentor’s experience in the area. He noted that if the borrower has poor personal finances this would be a red flag for the bank, and he emphasized that it is very important for the borrower to have “skin in the game” by contributing funds to the project.
Melissa Warren, Senior Advisor at Sterling Properties
Melissa Warren discussed the real estate agent’s role as an advisor for the whole business rather than just trying to achieve one transaction. She noted that an advisor focuses on the big picture, helps assemble the individuals who will make up the team and assists in multiple deals to help grow the business. She discussed considerations for small businesses looking for new space.For example, they might consider an older building with lower net charges and rent but good foot traffic and less competition. Retail tenants are generally looking for the best location for the best price and improvements allowance and rent-free lead time. She noted that some benefits of leasing over buying are being able to sell the business without being tied to real estate and having more budget for other things, like advertising. She also stated that supply chain issues and inflation are requiring landlords to give more for tenant improvements, but in exchange, they often want a longer terms.
Cleveland Spears of Spears Group (marketing agency)
Cleveland Spears discussed budgeting for marketing for new retail businesses. The standard recommendation is 3-5%, but the budget should depend on the specific business’ plans for growth. He emphasized that the marketing budget is as important as rent and utilities and needs a long-term commitment. He noted that social media allows businesses to find the exact target customer based on data, and data allows for better measurement of effectiveness of marketing. Thus, new retail businesses might consider the use of influencers for marketing because this is more economical and provides the ability to speak through a trusted voice to the consumer.