Thriving In A Bad Location

Every neighborhood has one--a particular retail store or restaurant location that seems to consistently fail. One business after another moves in, each succumbing to the same bleak fate. The location itself seems doomed to fail. Can any business succeed there, or is the spot just jinxed?

The Portland, Oregon, location of entrepreneur Allen Tackett's coffee-house could certainly be considered jinxed. In the seven years prior to Underdog Coffee'sresidence, at least three businesses had come and gone--including another coffee shop that couldn't make it work. Not easily discouraged, Tackett bought the failing coffeehouse in early 2005 (it was being run under a different name) and completely revamped it. From giving it the Underdog Coffee moniker and sourcing higher-quality coffee to creating new, eye-catching, backlit signage to draw in crowds, Tackett, 29, set out to unequivocally break the curse.

Change is the key to making previously failing locations succeed, says Richard Parker, a small-business expert and author of How to Buy a Good Business at a Great Price. A new business can't do the same thing as the old, failing business and expect to succeed. "As opposed to the location being wrong, the concept of the business is usually wrong," says Parker. "Maybe a restaurant isn't good for that location, but another business is." Even a seemingly small change to the business concept can make a huge difference. Parker cites a situation where restaurants continually failed due to a parking lot that customers perceived as unsafe. The restaurant that finally succeeded in that location offered free valet service.

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Parker also suggests using grass-roots marketing to get the word out about your new business. New, more visible signage, local fliers, direct mail, radio spots and product giveaways will encourage people to give your business a chance--and hopefully, the quality will keep them coming back for more.

Tackett proved extremely adept at marketing his new business. When he decided to give away free coffee during the week of his grand opening, he asked his local radio station to publicize it--and the DJs were more than happy to send listeners his way. The strategy worked, and now Tackett expects combined sales from that first store and a second location in Lebanon, Oregon, to gross over $250,000 in sales for 2005.