Find the Right Location For Your Showroom

Naturally, a sampling of specialty dealers and custom installers yields a number of various opinions that are based on their own business experiences, current financial status and long-term business goals.

In the affluent suburbs of Southern California, both Ty Meyer, president of Mission Viejo-based Audio Video Design, and Gary Hall, vice president of La Quinta-based Radio Active, say that owning a storefront space opens up more options for a small business than would be there with a lease.

"We decided to own," recalls Hall. "We bought when the market was still rising and we wanted the option to keep the building in case something ever happened to the business."

Meyer supports Hall's comments and adds that ownership provides a natural equity and enables changing with the many market conditions that a business has to weather.

George Hall, president of Elkridge, Md.-based Questron Inc., points out that having the ability to change is one of the most attractive benefits of owning a piece of commercial property.

"We own it. There's no more rent," he says, "and we have the flexibility of being able to do what we want."

Dennis Sage, president of Phoenix-based Dennis Sage Home Entertainment, says that owning has enabled his company to tailor his facility to fit the needs of his business. That, in turn, he says, visually communicates how seriously his firm is about its work.

"Anyone that visits our store can quickly see what we do and what products and services we offer," he explains.

"With a captive audience, our sales team is very good at describing the possibilities. In many cases, it's not the product, but the solution the client is searching for. If we can show them that, we can create the magic they want, and a level of trust is established that lasts a lifetime -- as long as we do what we say we will."

In making his decision to own, Sage notes that he wanted as much input as possible. So, he asked his 85 employees for ideas.

The end result, he explains, is something that showcases many of the residential technologies homeowners' desire. "Over 300 ideas were given to me and this facility includes about 90 percent of those ideas," he says.

"We didn't include the indoor pool and sauna, the weight room, the indoor basketball court, the laundry facilities or the stripper pole, as were suggested by some of the more 'creative' individuals. However, what we have here is a facility that meets the needs of employees, builders, clients, designers, architects and others."

Sage's property features a 5,000-square-foot showroom, ample space for expansion, multiple training/meeting rooms, a library, private spaces for almost every employee, a sizable warehouse, a video repair facility, a staging area, a female-only lounge and a framed house.

"The beautiful part is that everybody feels that they were a big part of creating it," Sage says.

"So, the pride of ownership runs very high. It is a facility where clients can touch, see and hear the latest and greatest in technology. Builders understand the tremendous dedication we have to quality work. Designers see the wide plethora of architectural choices they have to choose from, and it is all done in a comfortable setting that is very easy for both male and female."

The biggest downside to ownership and to investing in a property space, says Sage, is that it creates large overhead expenses.

The timing for his move, he said, also coincided with the housing market slump, which has made it more difficult to compete against the trunk slammers that use price as a means to gain business with builders.

Sage says that some builders don't understand the differences between his products and services and those offered by the discount companies and, in a tightening economy, the battle for revenues has become in part tied to job bids.

7 Tips for Real Estate Investments

Jon Duncan, president and CEO of Indio, Calif.-based RNX International, says specialty dealers/installers should look at any real estate investment from a long-term perspective.

Duncan offers these tips when using this type of angle:

• Look for property that is located in a state and/or federal subsidized zone. That way, the tax credits, which can be substantial, help pay for the property.


• If you are not incorporated, or if you are set up as a C Corp, change to an S Corp. That way, the annual tax credits amassed by the business can be passed on to the owner and stockholders.


• Purchase the property outside the business. Then, lease the property back to the business so that the mortgage payments are made by the business. The owner benefits here are obvious in that you are paying yourself and amassing some personal wealth. Plus, as you look to retire, you will have the opportunity to continue the income stream through the continued lease of the property whether to your own company that has been sold or to a new tenant.


• When looking at a new facility, look for visibility through like businesses. For example, locate an area wherein other trades are located -- designers, cabinet shops, window and door companies, and others that target similar clients. This will expose your business to potential clients or partners through your neighborhood location alone.


• Have a plan that meets with your business requirements, including office space, showroom, tech area, warehouse and storage, plus room to grow. Before you go out looking, know what your company needs.


• Talk with your accountant. See if he or she has any suggestions that can benefit either your business or you personally.


• Once you've got a plan, go out and make it happen. Hold an open house, invite you clients, architects, builders, designers and cabinetmakers and get the word out about your new location. Ask a factory to help out with the open house costs. Feature that manufacturer's products to help draw you guests into the event.