Know the answer before you open another location!

Understanding the differences, benefits, and challenges between “Location” or “Destination” business is VITAL! So, it always surprises me when business owners don’t understand these concepts, or they don’t know which one best descibes their business. I’ve seen some locations fail because the owner didn’t understand. There are many decisions to make when opening your first business, or your tenth location, and determining if you are a Location or Destination will determine how you handle those decisions.

When I was in my late teens, living in Baton Rouge,  I started training at a new restaurant concept for a waitress position. I learned a lot about presentation, expectations and delivery. After a few training sessions – before the place opened – one of the owners stopped by. I couldn’t help but ask them how they planned on getting people in the door – much less the right people.

The restaurant was new to the area and it was tucked back behind several other businesses – even other restaurants. I couldn’t imagine how they would generate any business being so far off of a major road with zero visibility. I’m sure the owner was wondering why a waitress in training would ask this kind of question, but he answered, “We are a Destination not a location. People will decide to come here and will drive the slightly extra distance. We don’t need drive-by traffic to be a success.”

At the time I thought they were crazy. Honestly, I quit the job because I didn’t know how I was going to make money at a restaurant that would have such little business. I also didn’t like the way they had us delivering certain dishes. The method forced us to almost burn our hands by holding the scalding-hot bowls a certain way so they could be delivered with style. I went to work at another restaurant in town that already had a proven track record, but in hind sight I probably missed out on a great opportunity. The “New Concept” was Semolina. It was very VERY successful in that location for several years.

That owner, or franchise owner (I don’t know which), understood what kind of business Semolina was. They had some specific and strategic advertising, and yes, people would drive the extra distance to a restaurant that was “off the beaten path” for well-prepared fresh pasta served in a dynamic atmosphere. They were a destination.

Now, deciding if you are a Location or Destination isn’t only a restaurant owner’s choice. All Business-to-Consumer companies need to determine what they are.

So, for instance, if a Destination business compels people through unique differentiation or branding to arrive there by making a conscious decision to do so – a Location business is one that is planted in a high-traffic area so it can take advantage of its visibility and convenience. Successful location-based businesses know a lot about what kind of “high-traffic” they need to be successful, and will only add locations that fit that model.

As I said, knowing if you are a Location or Destination is vital! This is because you have to make other decisions for your business once you determine which model your business will be. Marketing, Branding and Advertising are used differently for each. External signage is different. Your message will be different. Your peak volume of business, and at what time of day it occurs will be different.

If you have a highly successful “Location” it is challenging to then establish a “Destination” when opening your next store. If you open your first store and are relying on a specific kind of “high-end” or “hungry-in-a-hurry” traffic, for example, and you picked the wrong location, your success may be limited, or you will need to re-make yourself into a destination.

So whether this is your first or fifth store, figure out if you are a Location or Destination – knowing the answer may determine your success.