Tuesday, December 11, 2012

Step 3 - Decide Where You Will Be: Location, Location, Location

In the deep forests of Sydney’s Northern suburbs, Richard Branson’s Virgin company opened a massive fitness studio the size of a football field. It is not near anything, and the first time I went there I got lost. Terrible location - right? Wrong. The building has a massive underground carpark that fluctuates between being full and empty three times a day. I met with the Manager of this vast complex - to discuss bringing in Alexander Technique back in the days of my failed Sydney launch - and when I commented on the weird location she let me know it was the result of three years - THREE YEARS - of exhaustive research. This Virgin Centre was pretty much full from the start.

Location will finally determine how successful you become. Get everything else right but this part wrong - your business will still struggle. There is a reason rents get higher in busy locations - businesses there make more money. For an Alexander Technique teacher it is not as simple as going to a busy location - we offer a service, not a product - so like Virgin the best location could be one you least expect. Without knowing your niche, this decision - so important financially to your cost structure - can easily sentence your business to years of unnecessary struggle, without you realizing why.

I know this, because it happened to me.

When I started BodyChance I was clueless. It was 1999 and we were renting a room in Ikebukuro, which turns out to be a reckless, red light area for salary men getting drunk after work. Hmm. Not the ideal location, but it never occurred to me to research it. Someone had a room to rent, I needed a room, so I took it. After three months I faced up to the reality.

Chastened, I made a list of what we needed that covered price, proximity to the station, atmosphere, size, amenities and look and feel. What I forgot to consider deeply, and what needed to be my first consideration: would it work for the people I expected to be coming?

However I, like most Alexander Technique teachers, only had a vague idea about this. “Oh, people in pain or interested in Alexander Technique I guess” was my definition of my niche. That’s why a clever decision is not possible until you have clarified the expected source of your clients i.e. your niche. Last blog, I gave you a checklist of 12 things to sort this out.

I looked at several places and finally found a studio that fitted the bill, though slightly above my budget. We moved in and struggled thereafter. It didn’t occur to me that my struggles had anything to do with our location. Finally, in desperation, I got a consultant, a Japanese consultant. His first comment was on our location. Here’s the story from a previous blog…

My first studio was in a suburb called Mejiro. It is on the Yamanote line - a transit line that runs a ring around Tokyo, in much the same way as the Circle line in London, or how Manhattan Island defines New Yorkers. The Yamanote Line is one of Tokyo's busiest and most important lines, but guess which is the least busiest station of all 29 stops? Right - the one we were on!

We moved our studio to Meguro, where we are today, and in the first year our turnover increased by 30%! Meguro is where office workers (with money to spend) go to relax, get a massage, learn ballet, go to music school - getting the picture? There’s been no looking back since then, as we have moved from strength to strength to be unassailable in the Alexander Technique market in Japan.

BodyChance also runs a studio in Osaka, Japan’s second biggest city. I did not repeat my Tokyo mistake, and found a studio within easy reach of a complex of stations that bring people in from far and wide, and is a known location for many different kinds of services. However, in the four years we have been there, our studio has not been able to gain traction with the public. Our Osaka memberships are 80% below Tokyo! What is wrong? There’s one suggestion in an earlier blog on this topic, but at present I don’t definitively know what is true. Therefore, this year we will make an experiment and move to a new studio.

It is a costly experiment - our new outlay will be between $10,000~$25,000 to move, and the rent will be several thousand dollars more a month. Is this the right thing to do? We have tried everything else in the last four years, yet membership numbers continue to stay low. Location is all that is left - so time to play that expensive card. The jury is still out, but I will know more in a year…

This is leading edge stuff for me - I don’t have a check list for you today. I am on my own learning curve with this, so stick with me as I can probably save you a lot of time, money and anguish by making the mistakes first.

If this is all overwhelming and you don’t know where to start - here’s my simple plan B: discover a successful, thriving business that offers a service to your niche - where are they located? Put your studio there! The business could be anything unrelated to Alexander Technique lessons -  for example a music shop that offers lessons - just make sure it is selling a service, not a product. It must be a business that is interacting with people on a daily, hourly basis.

The idea here is to lean on the research that others have done for you. Big, dumb companies usually get this part right. They have to - there’s too much at stake - and they have the resources to do the exhaustive research to analyze a location. They may fail on niche and product, but not usually location. So save your self three years of research and copy them.

In my last blog I also promised a story about virtual locations, but I will skip that one for now. It’s pretty advanced and getting physical location right is more fundamental. Instead, tomorrow we take a sharp turn around to look through the window of your studio and watch what kind of service are you offering? If you are thinking “I teach Alexander Technique” you have a long way to go my friend. Come back and read more tomorrow…

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