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How to Get the Best Commercial Space?

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By : Hassan Osman    99 or more times read
Choosing a commercial space like a bank or a place to eat is not an easy task. Unlike what people may think, you do not just go and get whatever you find. There is a scientific approach to this process and unfortunately, this approach is not applied more often in Egypt. It is not just the space area and location, you have to be aware of the type of customers and know exactly which class they belong to.

There are many steps to be followed. First: identifying the places and locations that are possible for a chain of large branches to open for the first year like Mohandeseen, Zamalek, Heliopolis, or Maadi. If we started in Mohandeseen for example, you have to know the streets and select one based on the customers you target. You will want a fancy street or a crowded street, so that people can see you. Try to choose a place in the corner, as they are always visible to one's eyes.

The standards that you work on are: Visibility and Accessibility to Customer and Capacity.

First of all, the visibility, it has to be visible from every angle and preferably on ground level, so that the sign can be visible. Secondly, is the accessibility, which means being easy to reach and to find. Being on a corner has been easy to accomplish before, but now it has become a difficulty, as it is impossible to find a free corner in Egypt. Then, comes the capacity or the space area. Unfortunately, we are a bit ignorant when it comes to this point. You might want to buy a 300 meter area, but someone tells you he can get you a 600 meters area for the same price of 300 meters. This might sound like a good deal, but you have to take into consideration that you will have to construct, finish and air conditioning an extra 300 meters. You will find extra space that will cost you more than you planned and you will not benefit from. If the space area is smaller, especially if it is a restaurant, everything will be clustered and you will not have enough space to move.

Now that you have chosen the street, say you have two corners. To compare between them you have to think which one has better shops and location. Also, think of the traffic flow, to calculate: there is something called "Decision logic & Decision criteria."

Decision logic is to see the visibility, accessibility, and capacity of each property and then start grading them. When you choose the place, you have to have someone who knows how to deal with districts well to review the authorizations; so that you do not choose a place then be left with incomplete papers. Next, you talk to the owner of the place. The most important thing that you have to know about before buying or renting is not saying your company's name because of the "New York strategy", which means; if the owner finds out that you are from a big company, he will raise the price.

When you ask yourself 'why am I taking this place?' Here comes the decision logic that is what has convinced you to take this place. Do not forget to think of the place and its merits, shortcomings, the percentage of population overcrowding in this area and the number of companies or banks that can come to your place. Then, you go to the location and calculate the number or cars and pedestrians passing by in weekdays and weekends. The commercial space you are buying is a project, so you have to study it thoroughly before you decide. You also have to weigh up your cost and profit.

Now you have to see the capture rate. The capture rate determines the number of people that can come to your commercial space. It has to be realistic. In addition to the people living in the area and also the employees working around, there are also people daily passing by the space. To calculate the capture rate, stand in the street four times a day; in the morning, in the afternoon, after sunset and at closing time for two days during the week and during weekends. Make a schedule to write the number of people and cars passing by. Use a stopwatch to count the number of people and cars passing in 3 minutes. If 50 people and cars passed by in those 3 minutes, add them and calculate the average. The result is the capture rate.

Sales projection = Average Check x Transactions. Average check comes from the capture rate. You have to bear in mind that on the weekends, especially in the summer, the number of people will decrease as they travel.

Now that you know the sales projection, it is time for the completion map. Put the location of the store on a map along with three of your strongest competitors in order to build accurate expectations. There is a way to find out how much your competitors make. Go first thing in the morning and buy something, ask for the receipt, then go again at closing time and buy something and take the receipt. This way you will know the number of transactions and you already know their average check. Then, you have to do something called "Competition Visit." You visit your competitors and rate them. There is something called QSC: Quality Service Cleanliness. Do the rating and evaluate them, this can be done in half an hour.

This way your sales projection is accurate, you know why you are choosing this place and you examined all the dimensions of the project. Now start talking to the owner about the price. Certainly, everyone knows the prices in the market whether buying or renting.

The problem is that not everyone knows how to close a deal. The important thing is to convince the owner that you are so close to closing the deal, which is done through simple techniques. For example, send people to calculate the measurements and make sure all the papers are correct. You can also send the contract. You, also, have to identify the proportion of your profits and losses in the upcoming two years. Revenue - Expenses = Net Profit.

In my opinion, real estate directs any business. Banks, for example, have to be in a rectangular format, and pharmacies have to be above ground. There are a lot of other complications that real estate help with its solution.

This study takes from 10 to 15 days. It is very important for the completion of a successful and study-based project from all aspects.
Real Estate Egypt

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