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Address for success

With her wares displayed against an eclectic backdrop of women’s designer hats from the 1960s, Russian matryoshka nesting dolls, flashing LED holiday lighting and French Art Deco clocks, it can be easy to forget Jovanka Hammond runs a bookstore.

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Hammond’s Antiques & Books

“We were the first people to renovate a building on this street,” she recalls.

That location has paid off. Tucked into a historic two-story structure she purchased in 1979 in South St. Louis’s once-gritty Cherokee neighborhood, Hammond’s Antiques & Books is well-placed as a quaint, out-of-print book and antique shop in an increasingly attractive area for browsers of anything from literature to decorative jewelry.

“When we moved back to St. Louis, I stumbled on it. I came down here and I loved it,” says Hammond as she idly flips through a National Geographic published in 1928.

“You know what? If you walk down these streets, it is pretty much the same as it was in 1890,” she adds. “I was very optimistic, and I felt that I could build a business anywhere,” she adds.

Optimism aside, can a business truly make it anywhere? Experts agree that location often can be a key factor in whether a startup enterprise succeeds or fails. The right spot could imbue a new company with everything from a steady base of customers to the ability to recruit the best employees. It all depends on the type of operation and the goals of the owner.

Hammond selected her location because she loved the neighborhood, which has since undergone a revival after decades of neglect. But even if nostalgia played a role in her choice, there were solid business reasons for the bookseller to be where she is.

“If I went to the Central West End, even in those days, I would have been paying $1,000 dollars a month for rent,” she says, referring to a more traditionally fashionable locale to the northwest. “I thought I’d rather take the low-key approach — pick a place that I thought was beautiful and wonderful and that I will be committed to.”

Setting up shop in an area that is still up-and-coming can indeed be a good choice when looking for better lease terms or smaller price tags for purchasing, says Jason DeBode, assistant professor of management at Missouri State University in Springfield. State or local grant money along with tax waivers or low-interest loans may be available in redevelopment zones.

Still, he warns that foot traffic might suffer initially until the neighborhood’s reputation improves.

“If you are in on the ground level of that, you might benefit from the upswing that comes after,” he noted.

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Ragazza Food & Wine

When Laura Norris opened her Kansas City eatery Ragazza Food & Wine in 2013, she chose an area that had a thriving business district, but she sounded a bit like Hammond when it came to other factors.

“It had to be an historic building,” says Norris, who set up shop in the diverse Westport area. “It had to be part of a neighborhood. And it had to be in at least a somewhat trafficked area.”

She was pretty sure traffic wouldn’t be a big concern, though. Her mother suggested she count cars passing on the street.

“I was like, ‘Mom, it is on Westport Road between Broadway and Main,’” she recalls. “‘I think we’re good.’”

Norris, who now is relocating a few blocks away in search of even better visibility and more space, says that finding locations can be difficult for a restaurant because those that are closing may not advertise the fact beforehand. She also warns that owners of new businesses should make sure the building is ready to move in before they commit — or at least factor in whether the business is able to sustain delays in opening should a facelift not be completed immediately.

Still, she seems happy with her choice of a new location, which is within three blocks of six hotels and in a relatively residential area.

“I wanted to locate where people would appreciate my product,” she noted. “That isn’t going to be a strip mall in the suburbs.”

Of course, not every business needs the right storefront. Sometimes it’s more critical to be near suppliers.

“If it is a manufacturing business that needs a certain kind of raw product, that might be extremely important,” says John Mehner, president and CEO of the Cape Girardeau Area Chamber of Commerce. “If it is a wholesale distribution business that needs access to the distribution network, then it might be interstate highways and rivers that are important.”

Mehner says that his southeast Missouri town offers a strong diversity of businesses, including tech startups that don’t have to worry about traffic counts or visibility. Still, they may have to make themselves attractive to another audience — employees.

“Usually, those people have a tendency to like walkability,” he says. “They like the stuff that that kind of environment offers. That’s most easily achieved in a downtown area in a place like Cape.”

The Springfield Area Chamber of Commerce tells a similar story, particularly in regard to IDEA Commons, a Center City innovation park and mixed-use development headed by Missouri State University and supported by the city, the chamber and other area agencies.

Matt Morrow

Matt Morrow

“I think we’re starting to build a little bit of a culture, a little bit of a hub in that part of town that seems to be appealing,” says president Matt Morrow, who touts the area’s growing technology sector.

That spirit can also be seen in St. Louis’s burgeoning tech district along Forest Park Avenue, with the Cortex Innovation Community as its hub. Convenient to highways and public transit and peppered with trendy Lime rental scooters, the region is trying to build a collaborative culture of which geography is a key element.

“Clustering certain industry sectors or segments of like-minded businesses becomes more attractive for the people who are the employees of those businesses,” says Cliff Holekamp, professor of practice in entrepreneurship and academic director for entrepreneurship at Washington University.

“You create a sense of community, and that sense of community is something that becomes an attractant to recruiting employees,” he says.

In Kansas City, a distinct tech presence also has evolved in the Crossroads Arts District. Laura Goede, director of marketing for Homebase, a smart-apartment technology company, says that even dissimilar fields can draw on each other.

“In creating today’s technologies, whether you are working next to someone in a completely different field, how they’re thinking about their product or solution can open new ideas that you may not have thought of for your industry,” she says.

Before coming to Crossroads, Homebase started out at Flexpod, a coworking space. Such an option can provide its own intangible benefits, Goede noted. With coworking, a business’s neighbors can even provide valuable services or advice in fields such as accounting or law.

“There is someone who works down the hall who can help you with questions if you need them,” she says.

A surprising amount of community can also build up in coworking spaces. Management instructor Dana Frederick, director of the Missouri Innovation Academy at Springfield’s MSU, recalls a church that set up shop in a coworking operation during the week and held Sunday services in a common area.

“When he said he was doing that, I said, ‘You are doing what?’” recalls Frederick with a chuckle. “But we attended there, and it works well.”

laura-goedeBeing near others doesn’t just help with employees. It can create a certain critical mass that raises the profile of an entire area, whether one is looking to build a dining destination to bring in restaurant patrons or a tech hub to attract top talent. It even works with hardware stores.

“One of Lowe’s stated business strategies is to open up across the street from Home Depot,” says Holekamp of Wash U.

Whatever option an owner chooses, the most important thing is to keep in mind that it isn’t about the guy in charge.

“Don’t ever choose a location because it is the most convenient for you as a business owner,” Holekamp says. “This is a mistake I see commonly. Owners of a business will choose a location based on their personal convenience rather than thinking about it for their customers and employees.”

Matt McCormick, president of the Columbia Chamber of Commerce, advises that owners also should be aware of potential usage limitations on a given location for a particular business.

“If you are looking at a specific piece of property, make sure that what you are wanting to do there fits the codes and ordinances,” he says.

Mike Staenberg, president of The Staenberg Group, a St. Louis-based commercial real estate developer, says that there is a great deal to consider when picking a location — including everything from cost and egress to the proximity of convenient restaurants for potential workers.

Regardless of all of those considerations, a business owner should always select a reputable landlord, he says. A lease is only as good as the parties signing it.

“Talk to the tenants who are there and say, ‘How do you like the building?’” advises Staenberg. “It is not always about rent.”

Business owners also may want to think about who their fellow tenants are and whether their foot traffic is dependent on those neighbors.

“If you are going there because Walmart is located there and then Walmart leaves, then you are stuck with a vacant shopping center,” he notes.

Jovanka Hammond

Jovanka Hammond

Exurban environments can present their own challenges and benefits.

“We enjoy being here. It just takes time when you are starting out in a community like this,” says Mark Hohenshell, as he loads cottage cheese into a dairy case at Marsala’s Market. “It takes years to develop, and it depends on the economy.”

Marsala’s has spent the last 13 years as part of Newtown, a cozy planned community in fast-growing St. Charles County. The little grocery has been here longer than most of the nearby residents. Hohenshell remembers most of his first customers were construction workers ordering sandwiches while literally building the town surrounding the store.

It is important for business owners to understand their role in the community, Hohenshell says. He and his wife run a market that is primarily a convenience for neighborhood folks, and their location reflects that.

“As grocery-store owners, we realize they are still going to go to Schnucks or Dierbergs, especially people with kids who need to stock up,” Hohenshell says. “We’re here for that Friday-night bottle of wine, that six-pack of beer on a hot Saturday afternoon so you can go fishing on the lake.”

Having a core vision of what a business does is probably the most important aspect of picking a home for it.

“It really comes down to understanding your customer and understanding how they consume the product or service you are offering and putting yourself in a position so that there are the least barriers to consuming your product or service,” Holekamp says.

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