Leo in N E Illinois
The Professor
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Like all businesses, location matters. The business sinks or wins based on its return per square foot of space, versus cost per square foot of space. I know a number of plant businesses (orchid businesses and one bonsai business) that went out of business because the land became too valuable for the activity (growing orchids or growing bonsai), the business could not return enough cash flow to cover property taxes.
Its all about gross sales versus total expenses.
So obviously, you can not afford to locate a bonsai business in downtown Atlanta, in the high rent district of Peach Tree or any of the trendy, high property tax or high rent districts. Its silly. So the logical step is to look in the moderate to low rent areas. You need a neighborhood that is either far enough out in the country that land values are cheap. Or you need a "brownfield" development where land is cheap, but you are closer in.
THere is a "Brownfield" orchid company in a "cave", in Kansas City. The cave is an old limestone mine that is no longer quarrying limestone. The tunnels are huge, usually 20 foot ceilings, and they run miles underground. The quarry become a mixed development. Because it is underground, you don't need to heat much in winter, actually you need to add a little heat, winter and summer simply because the constant 55 F cool puts a chill in your bones. The quarry ran electricity, there are roads in and out, parking areas in each gallery and shops put up glass storefronts. The orchid nursery has bout 2000 square feet, and grows all the orchids under lights. The rent is paid by the year, and is (was in 2005) only $4 per square foot. Your only utility was electricity, and growing under lights without the need for major heating and cooling that you would have to do above ground, the economics worked out. Other businesses in the cave included refrigerated storage. A boutique wine cellar where you can store you wine collection in individual lockers, there were restaurants, refrigerated trucking companies, and a bunch of other odd things. a wild place.
Point is, get creative on location. Some brownfield sites might be affordable. Otherwise, you have to head out to the country, to get land with a low enough overhead cost. Also, you must consider your customers relation to your location. One business in a very expensive neighborhood, the neighbors would complain when I parked my 20 year old rusty mini-van out front. The neighbors would complain that my car was making their lawns die. I'm joking, but one orchid business was forced by the City it was in to close and re-locate, because neighbors complained, and forced a change in zoning to prohibit retail sales on that street. It was a very, expensive neighborhood.
By the same token, the neighborhood needs to be safe enough that @Adair M could park his Tesla out front and not be afraid as to whether it would still be there when he came back out. Or that the rust from my car would attack his Tesla.
So location, location, location.
Brussels is at least somewhat concerned, the suburbs of Memphis keep expanding and property values for his location keep going up and up. He originally located just a few hundreds of feet across the line in Mississippi from Memphis in order to get in on the lower property taxes. So far it has worked well for him, but his taxes keep going up.
So choose your location well.
Its all about gross sales versus total expenses.
So obviously, you can not afford to locate a bonsai business in downtown Atlanta, in the high rent district of Peach Tree or any of the trendy, high property tax or high rent districts. Its silly. So the logical step is to look in the moderate to low rent areas. You need a neighborhood that is either far enough out in the country that land values are cheap. Or you need a "brownfield" development where land is cheap, but you are closer in.
THere is a "Brownfield" orchid company in a "cave", in Kansas City. The cave is an old limestone mine that is no longer quarrying limestone. The tunnels are huge, usually 20 foot ceilings, and they run miles underground. The quarry become a mixed development. Because it is underground, you don't need to heat much in winter, actually you need to add a little heat, winter and summer simply because the constant 55 F cool puts a chill in your bones. The quarry ran electricity, there are roads in and out, parking areas in each gallery and shops put up glass storefronts. The orchid nursery has bout 2000 square feet, and grows all the orchids under lights. The rent is paid by the year, and is (was in 2005) only $4 per square foot. Your only utility was electricity, and growing under lights without the need for major heating and cooling that you would have to do above ground, the economics worked out. Other businesses in the cave included refrigerated storage. A boutique wine cellar where you can store you wine collection in individual lockers, there were restaurants, refrigerated trucking companies, and a bunch of other odd things. a wild place.
Point is, get creative on location. Some brownfield sites might be affordable. Otherwise, you have to head out to the country, to get land with a low enough overhead cost. Also, you must consider your customers relation to your location. One business in a very expensive neighborhood, the neighbors would complain when I parked my 20 year old rusty mini-van out front. The neighbors would complain that my car was making their lawns die. I'm joking, but one orchid business was forced by the City it was in to close and re-locate, because neighbors complained, and forced a change in zoning to prohibit retail sales on that street. It was a very, expensive neighborhood.
By the same token, the neighborhood needs to be safe enough that @Adair M could park his Tesla out front and not be afraid as to whether it would still be there when he came back out. Or that the rust from my car would attack his Tesla.
So location, location, location.
Brussels is at least somewhat concerned, the suburbs of Memphis keep expanding and property values for his location keep going up and up. He originally located just a few hundreds of feet across the line in Mississippi from Memphis in order to get in on the lower property taxes. So far it has worked well for him, but his taxes keep going up.
So choose your location well.
