Where your business is located is important. Get the golden location and you can expect to be busy and running a profitable business, get it wrong, and you might find yourself closing down soon.
So what is the criteria for a good location for a business? Actually, there are no set rules. Your business is unique and therefore, the ideal location is going to be perfect for you, but perhaps not for your competition. There are of course exceptions to this rule; surf shops will want to be near the coast for example. But even with these exceptions, there will be variations in the need of each business when it comes to location.
To help you determine where the best location is for your growing business; here are a few considerations:
- Brand Image
Your brand, the image of your business, must link to your location. This is because when customers or potential employees first approach your location, they will make a judgement about your business based on the surrounding area.
An example could be a high-end restaurant opening up in the middle of a downtown area. Customers will expect that the food would match the area and local residents might expect the prices to be more aligned to their income.
While competition is good for business, it stimulates innovation, too much competition or rivals being too close can be a bad idea. That could limit your potential footfall into the business, especially when you are a retailer.
However, it might also be a bad sign. If a similar business doesn’t exist in the area and you think that there is an opportunity, you have to ask why there isn’t someone else there. Perhaps there isn’t a market in that location?
- Local Labor Market
Employees can be the difference between success and failure. If you want employees, you have to ensure that your business is located within an area that has qualified and experienced workers. If they aren’t close by, consider whether someone would relocate or is a commute possible?
Consider a mining operation. It is unlikely that there will be qualified miners near a new area of operation. However, they might be willing to move or commute on a weekly basis.
- Future Plans
If you are looking to grow even more in the future, do your new business premises have the potential to help support that growth? Room for growth can be determined in different ways. For instance:
- Office space – could it accommodate more employees?
- Warehouse space – could it store more stock in the long term?
- Floor space – could you expand the shop floor to have more customers in at the same time?
- Proximity To Suppliers/Customers
Your business is unlikely to be completely cut off. It is likely customers and/or suppliers will have to visit your premises at some point. Not being close enough to them might increase costs, make it difficult to operate or mean you don’t have the footfall to generate enough revenue.
For example, opening up a pizza restaurant on a highway might not provide you with the number of customers you want and make it hard to receive stock.
- Legal Issues
Consider very carefully where your location is optimal for taxes/government regulations. There might be opportunities for you to save money by operating across a state line. Alternatively, some states don’t allow certain operations or have different regulations – moving the premises might make it easier to do business.
Sometimes it costs more to operate in certain areas. Rents can be higher, suppliers charge more, and insurance can vary depending on crime rates and other factors. If you want your business to continue growing, you’ll need to keep costs down as low as possible.
Your business may be growing now, but for its continued growth, you need to select a location that will help support your future. Not every location is going to be suitable for your business, which is why you need to consider the above criteria to ensure you have the best premises for your organization.
How did you select your business’ premises? Has it had much impact on your business?
Let us know in the comments below.