The Burning Questions

Before deciding on a kiosk, be sure you've answered three essential questions.
Magazine Contributor
4 min read

This story appears in the October 2003 issue of Entrepreneurs StartUps Magazine. Subscribe »

A flip of the coin, a shake of the Magic 8 Ball, the fortune in the cookie-if only these could decisively tell you whether buying a kiosk is the right move. Unfortunately, it's not quite that easy. So if you're looking for a kiosk, it's up to you to do the digging, the soulsearching, to ask the tough questions that determine whether this is the right opportunity for you.

Kiosks generally work well for start-up entrepreneurs who want to test a product in a shopping center, says Sam Hosn, general manager for the Town Center, a shopping mall in Boca Raton, Florida. "They get the benefit from the high traffic, and the investment is generally much lower," Hosn explains. "In fact, kiosks generally work better for small-business owners who are just starting out than they do for large chains."

But how can you be sure a kiosk will work for you? What questions should you ask when considering a kiosk? Here are the three major issues you have to address before you open for business:

1. What product will you sell in your kiosk? Hosn estimates that 90 percent of the time, operators already have a product in mind when inquiring about kiosks. "The first thing you have to evaluate is whether it's the right product for that market," Hosn says. To determine this, do demographic research, and speak to the shopping center's landlord about customer demand. "Normally, a landlord will give [the entrepreneur] a wealth of information as far as whether there's demand for a product. Many customers will express whether they feel that particular shopping center is missing a product, so you can depend on the landlord to give you a little guidance," Hosn says.

2. Where should you locate your kiosk? Your answer is directly related to another question: Who is the target customer for your product? "The leasing rep can help position you in an area that is most favorable to your product. For example, if it's a product related to teenagers, the landlord helps you select a location that's around stores catering to teenagers," says Hosn.

When you think about product and location, the answers to many of your questions can be found at the mall. "To do your homework and find out if that center is right for you, actually sit in the center and count traffic," Hosn suggests. "Watch people-where they're going, where they're shopping, which products interest them more."

3. How should you structure your lease? "In your discussions with the landlord, try to negotiate favorable lease terms [geared to help you] survive, especially if you're testing out a new product," says Hosn. The type of products you sell can play an important role in your lease. "Many [kiosk] products are fads. That could be part of your business plan-you bring something hot into the market, and as [its] popularity [wanes], you bring in the next hot thing."

If selling an ever-changing stock of trendy items is part of your business plan, you may need to work that into your agreement with the landlord. While shifting your product line from tattoo-inspired jelly jewelry to Italian charm bracelets doesn't change the character of your business much, moving from Italian charm bracelets to personalized hermit crabs does. "Most of the time, landlords are flexible enough to work with you. They want every tenant to make money, and if a particular product isn't working, they allow you to change it," Hosn says. "There's some paperwork involved but also enough flexibility to help make sure you survive." Throughout the lease negotiation process, have a lawyer handy for any questions or concerns you may have. "If you're not familiar with the lease terms, it's definitely advisable to get a professional to look at all aspects of the lease," says Hosn. "That way, you don't make a mistake right out of the gate."

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