One of the top considerations new business owners face when preparing where to operate is location. Location is one of the most critical decisions as it can determine whether customers will enter your store or shop with your competitors.
There are many factors to consider when determining location such as demographics, visibility, supply chain, competition, budget and legal and environmental obligations. Here are some tips to help you decide on the right business location:
Determine what your business requires
Understanding the key demographics of your target market can provide insight into where your customers live and prefer to shop. As most businesses will choose a location that provides exposure to customers, it is worth considering visibility and accessibility when deciding on a location. Other considerations include:
- Competition: Are neighbouring businesses competing or complementary?
- Future growth: Do you plan to expand or grow in the future? Will you have extra space if needed?
- Image: Is the area consistent with your brand image?
Forecast your finances
When determining how much you can afford it is a good idea to forecast any additional financial costs you may incur such as:
- Transportation: What will be the cost of moving business equipment?
- Redecoration: Will the location need any improvements such as repainting?
- Tax: What are the income, sales and property tax rates for your state? Could you pay less taxes by operating across a nearby state line?
Research the area
The business premises and its surroundings will have a large impact on whether your customers will travel to your location. Study the foot and vehicle traffic for the area to ensure the location is practical for your customers. Some questions to consider include:
- Parking: Is there a parking lot for the shopfront? Is there affordable public or street parking nearby?
- Public transport: Is it convenient to access with public transport?
- Commercial activity: Are there similar businesses nearby? Is the area run down or a thriving shopping precinct? Does your business create noise or smells that may affect neighbouring stores?