Choosing a location for your business as the most important factor to consider in establishing your business, has been mentioned for a countless number of times in research studies, business-related articles, and online resources. In fact, we’ve got a marketing and management lecturer at the University of Dayton School of Business in the name of Irene Dickey to thank for in stating, “the three most important decisions (you’ll make in starting any kind of business) are location, location, and location”.
Reading across multiple references regarding the matter at hand concludes that businesses are directly affected by its location in so many ways, despite the different marketing strategies that are utilized to their maximum potential.
Why location matters?
So what exactly is the fuzz about “location” in business? One of the great fighting scenes that reminds me of the importance of having a strong position is the part in the movie entitled, “ Revenge of the Sith” where Obi-wan says, “It’s over Anakin, I have the higher ground”. The same principle is applicable in business. The success of your business depends on your position (being on high ground), along with other factors such as:
- Product pricing
- Projected income
- Operational cost
- Target demographics
Have you ever wondered why there are certain chain store franchises that last while others fold in a matter of months? Given that a franchise has an established brand, why is it that other franchisees don’t get the same percentage in profits? The fact of the matter is, your projected income even with the best offer in pricing may not yield the same results because of the factors involved along with the location of the business.
Come to think of it, if your business is something that can be run at home, your location won’t matter. However, it’s a different story when your business requires a physical office or something that has to be located in a commercial area where there’s a constant flow of foot traffic to ensure a steady flow of income.
Advantages of a good location
Here are some of the advantages of a well-positioned business based on location.
- Increases Brand Awareness
- Attracts Customers
- Penetrates Target Demographics
- Better Rate of Return on Investment
Important questions to consider
In choosing a suitable location for your business, see to it that you take note of your answers to the following questions:
- Does customer traffic hold a lot of weight in the success of your business?
- Is the convenience of your location more important to you and your workers?
- Does your business rely on deliveries from your suppliers?
- Is visibility important for the growth of your business and establishing your brand?
- Does your location abide comply with the zoning laws and regulations in your area?
Success in business cannot solely be attributed to attracting a large number of individuals and establish your customer base. Your location determines the quality of individuals, their talents, and the value that they bring to your business. It also helps to create and establish the image of your brand.
Factors to consider in choosing a location
While there may be other things that people would want to include, in addition to the following factors to consider in choosing a location for business, the following are the most significant.
Accessibility and convenience
In reference to the important questions you need to consider, if your business relies on frequent deliveries from your suppliers, make sure that your business location is easy to reach and near transportation links to main roads and accessible to different types of vehicles for delivery. Also, take into account the accessibility of your location for your employees and customers.
Security and safety
A good business location ensures the safety of your workers, as well as, your customers. Businesses lose the opportunity to earn money and trust of their supposed clients due to issues that are related to security and safety at the workplace or the place of business. Be sure to assess the safety of your business location and take the necessary measures to make certain that it is secure. After all, this factor greatly affects the premium of your insurance.
Being in an area where established competitors are in existence can work for or against you, depending on the type of business you have. Having too many providers for the same products and services is a clear warning that you are better off taking your business elsewhere. Although there are exceptions to the rule, especially for products where customers are eager to shop around and get the best deal. However, if the nature of your business offers something fresh and innovative, being in an established location where the market is ripe for the product you are offering would be a good option.
Business rates for utilities, rent, and taxes
Every business decision has a financial implication. Making certain that business operations continue while making profits after paying rent, overhead costs, and taxes is important. In choosing your location, be sure to assess if the cost is feasible in relation to your budget. Otherwise, look for an affordable location within your means.
Availability of talents and skills
Carry out your due diligence by conducting a survey of the area. In choosing your location, you would want to make sure that there is an abundance of skilled and talented workers that you can employ for your business. Let’s just say, you want to establish a business that handles customer service inquiries for consumers in the U.S. In this case, establishing your call center in a country where people have excellent communication skills in English is vital. Remember, the people you employ are your greatest asset. Likewise, setting business in a location where there’s a lack or shortage of talent is a sure way for any type of business to fail.
Space for growth
Another factor that you need to carefully consider in choosing a location is its potential for growth. Moving your business from one location to another is costly, not to mention that it would affect your productivity and consume if not waste time. Imagine this scenario, your business outsources products that are manufactured in a location that is economically feasible but couldn’t handle the expected increase in production. You might be able to address temporal issues, but eventually, you will be forced to relocate. In choosing a location for your business, think about the benefits for the long haul.
Despite having the knowledge, useful ideas and important factors to consider in choosing a location for your business, one can never tell the unforeseen events and uncontrollable factors that could happen in the early stage of planning. However, one can be assured that making the best decision for your business with carefully researched information, discernment, and reasonable probability would provide better results.