Location is one of the most important new business decisions. It’s part of how to start a business. How do you choose a good business location?
Here are some tips to make a better decision about where to locate a small business.
How important is location to a business?
The amazing progress of collaboration technology makes remote work much easier. But your location can still be crucial to your business. Your site can be a key factor in attracting customers and employees.
It’s essential for businesses that connect with customers at their location. That includes brick-and-mortar businesses like retail, restaurants, and dentists. Even e-commerce businesses need a lower cost packaging and shipping location to fill orders.
Small businesses also need to attract great employees. Your location can be a factor in whether people want to come to work for you.
What factors should I consider when looking for a business location?
Some factors to consider include:
- Costs
- Quality of life
- Foot traffic
- Market demographics
Costs when choosing your location
When you choose a business location, find an area with office space you can afford. Look into property tax rates. Increases drive up occupancy costs. Make sure that the zoning is right for your business.
Some other cost-related questions to ask:
- Does the area offer tax advantages?
- Is employee pay reasonable in this region?
- Do you need to offer perks?
- Will the logistical costs make sense for your business?
Quality of life when choosing your location
Pay and the type of work are top factors for employees. But, many other things make up their quality of life. Your business location can impact that quality of life in many ways.
For example, taxes have an impact on take-home pay. If you have the choice of where to locate, you may consider a state with lower taxes or incentives for business owns.
It’s not just about dollars, though. The average American commutes over 200 hours a year. A commute-friendly business location could be the difference between your business attracting good employees and not.
Other quality of life factors to consider in your business location are proximity to restaurants, access to schools for employee’s kids, proximity to freeways and more.
A principal factor for your business location is knowing if that area has enough employees for your company’s needs. Many of the quality of life influences overlap with the amount of talent. Some other determinants to consider:
- Is your business located near a major college or training facility?
- How fierce is the competition for the employee talent you’re looking for?
Foot traffic as a factor for location
Foot traffic is customer count in the area, which is very important for retail businesses. Do your own research on this but don’t be afraid to be a copycat. Your competitors have already done their research. It’s ok to follow some of them if it makes sense for your budget.
Market demographics as a factor for location
You can have a great product or service that fails because you’re not in the right market for it. For example, it might not be a great idea to open a retail sports-apparel store exclusively offering merchandise from the hated rival of the city its located in.
How do you find the right area for your business? Experts can help you create a strategy. You can also get a market research report by zip code.
How does location impact the success of a small business?
Put simply, the right location helps your small business succeed.
Location can impact sales, and it also affects cost structure and staffing. Consequently, the wrong location choices can lead to poor results, cash flow problems, or failure. Alternatively, excellent locations attract the most customers.
