Choosing a Business Location for a Business Start-Up
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Depending on the type of company you operate, location can make a big impact on the success of your business. It is important to take this into consideration when you are looking for a storefront or office - before you sign a lease.
Sometimes a higher-priced location can bring you more clients to substantiate the cost. However, a high-priced high-traffic location can be great for one business and not another. For a shop looking to secure a high-traffic location, it is important to look at the type of traffic that congregates in the area.
Here are some factors to consider when scouting out a location for your business:
- The first item on the checklist is making sure that the area is zoned for the type of business you want to open. You can find this out by contacting your local city or county office. One you know if you are even allowed to open your business in a specific location, then you can proceed to the next steps.
- Easy access for customers and staff. Think about locations where your target market already travels, so they would not have to go out of their way to visit your shop. The more convenient your shop location, the more likely customers will stop by.
- Speaking of convenience, can the location supply ample parking to customers? Is the parking lot easy to get in and out of? Is parking an issue, or do most shoppers use public transportation or bikes? Will people have to pay for parking? Is the neighborhood safe?
- What types of other businesses already exist in the surrounding area? It can be advantageous to locate near other companies that target a similar market to yours. This “clustering” effect makes it easier to attract new customers. For example a nail salon, beauty supply store and clothing boutique work well together - or a laundromat next to a deli or cafe.
- If your company is a technology-focused business, having a college nearby can help in both attracting customers but also qualified employees.
- Also consider the cost of doing business in the city. Lease rates, utility costs, taxes and other factors vary by location, and these recurring costs can greatly affect your bottom line. If you choose to operate in a higher-cost location, factor those expenses into the prices you charge customers and see if you can still be competitive in the marketplace.
- Cost of living can also affect your company’s profits. A location where the cost of living is low, yet the economy is growing and salaries are increasing is a good sign. In this situation, shoppers feel more comfortable spending money, but cities with desirable economies tend to grow in size, thus attracting even more buyers.
- Speaking of a growing economy, have you checked the growth rate in the area where you want to set up shop? Knowing these numbers can give you a good insight into the profitability of that particular location. In addition to population increase, notice if other companies are moving to the area. Do you see developments being built or lots of vacancies?
- Lastly, look at ways you can save money with things like tax incentives. Some communities offer nice incentives to attract commercial ventures into their areas and spur the economy. It’s worth asking about. Besides, if you are trying to decide between two different office spaces or storefronts, the right incentive can make decision making much easier.
Just like with products and services that you offer, with location you ideally want to give your customers what they want. Whether it be convenience, attractive location or a storefront bargain that enables you to offer lower prices to shoppers: always keep the customer in mind.
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