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Keeping it REAL estate

At Birds Barbershop, our mantra is to offer high quality at an affordable cost. We do that by seeking out real estate bargains, so we can push savings onto the customer. Without that balance, our model doesn’t work. And like many small operators who open one store at a time and rely on bank debt leveraged on increased sales to keep doing so, we can’t afford to open any duds.

A dozen years ago when we opened our first location, it was relatively easy to check all the real estate boxes. We could still find bargains. But rents have increased, meaning shops must succeed immediately. We have yet to close a shop, with nine in Austin, and one in Houston so far.

The ideal Birds Barbershop is a stand-alone 1500sq ft building that was perhaps once a laundromat/firehouse/gas station. Competition is fierce for those unique locations, but we find it important to seek them out, hopefully before they go on the market. If we are in a shopping center, we try to get a corner space, gussy it up as much as the landlord will allow and try to make it look like our small shop anchors that center. If they let us paint and mural the building and make a big, attractive sign, an in-line space can pop too.

Our ideal location is on a major, identifiable intersection or along a neighborhood’s major two-way thoroughfares, preferably with a middle turning lane to make entrance into a big parking lot easy.

Nowadays, working in the red-hot Sun Belt markets of Austin and Houston, boxes go unchecked. Rents have doubled over a decade, and unique real estate finds are rare, so we have to do a better job than the rest of the brick-and-mortar competition.

Before we tour available spaces, we zero in tightly on the area we want to be. The first thing we look for is rooftop density. Specifically, lots of small rooftops jammed together among twisty roads, bisected by long, straight retail corridors, with plenty of apartments thrown in. Bigger isn’t better for Birds’ business, but if you zoom out on the map and see larger rooftops cut off from essential services like haircutting, that’s another story. People who paid for the roof over their head are more apt to stick around longer, incorporate our business into their neighborhood routine, and raise their kids to be diehard customers too.

There’s always the rooftop anomaly, and in our experience building 10 shops, we’ve encountered it. In the most recent case, all the demographics were right: the density tight, within a nationally-ranked public school system so loyal it’s almost tribal – and the area cut off from retail amenity options. We now know there is a reason it is a restaurant desert: once parents and kids get home by 6pm, it’s lights-out on the streets, and in the warm months the families summer elsewhere. They do buy more retail, however.

We aim to learn from our mistakes and avoid future errors by physically being in the places where we want to hang our shingle. Once we’ve identified a part of town we like, we try to spend time getting to know the ebb and flow of the neighborhood’s people; where they eat and hang out, and what roads they use to get around, especially to and from work.

From breakfast at the diner to drinks at the place where the service industry hangs out, it’s an owner’s job to ask the questions that lead to the questions we didn’t think to ask. We love brokers that specialize and come highly recommended. One thing we know — especially outside our home market — is that we don’t know real estate the way a hometown broker does.

There are deals to be had in transitional neighborhoods, which south Austin was when we opened our first shop there in 2006. As our hometown expands, there are fewer of those pockets to be found centrally, but growth creates opportunity in areas we where we would not have thrived a decade ago.

“Location, location, location,” as they say. To that we would add one more, “location.”

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