One of the most important decisions you will make as a small business owner is choosing a location for your business. For many industries such as restaurants and retail, finding the right location can mean the difference between success and failure. The location of your business can determine the amount of foot traffic you will receive, the atmosphere you will create, and the demographics you will reach.
Finding the right location starts with analyzing the needs of your business. For example, are you a retail store that will rely heavily on foot traffic or a tech-startup in search of a hip location that will appeal to millennial workers? You also need to consider potential client demographics, real estate costs, where competitors are located, and how supplies will be delivered to your business. By understanding and defining your needs, you will be able to more effectively choose a location that will benefit your business. Choosing a business location takes planning and research, so here are a few factors to consider when choosing a location for your business.
How important is location for your business?
This may sound like a silly question, but think about how location will affect your business. A retail store or restaurant relies heavily on location compared to a company’s central office. Consider the impact location will have on your success as a business and choose a location that will best meet your needs.
Is the location accessible?
Does your location rely heavily on foot traffic or frequent deliveries? If so, it is important to consider how accessible the location is for your business. Are you close to main roads or highways? Is there adequate parking or space for large trucks to make deliveries? Is the location easily accessible by car, bus, or subway? Is the location easily accessible for employees who might be factoring that into their job search?
Consider the demographics of the area.
Think about who your target customers are and how close they are in proximity to your business. For example, a local brewery might appeal to a younger demographic so it wouldn’t make sense to build the business out in the suburbs. On the other hand, a women’s clothing boutique might be better suited to older women who don’t live downtown. Think about the demographic profile of your target market and see if that matches the demographics of the business location.
What is your proximity to competition?
Another important factor to consider is your proximity to other competing businesses. Depending on your particular business, this could either be a benefit to you or a hindrance. For example, if there is too much competition nearby then it may be a sign that you need to reevaluate your decision. On the other hand, if your business has something unique to offer, it could be to your advantage to set up shop in a well-established market.
Consider rent, utilities, and other costs.
Obviously you can’t overlook the cost of the location. Consider the fact that rent takes up a huge portion of your operating budget, it is definitely worth considering. You also want to consider other costs associated with the location such as utilities, paid security, janitorial services, parking fees, remodeling expenses, and general maintenance costs. It’s a good idea to estimate the total cost of the location to determine if it falls within your company budget.