If you’re starting a new business, buying a business location is one of your chief concerns. There are more than 30 million small businesses in the USA, and without a good location, you’ll never be able to compete.
So how can you choose a good location for a business? What are the fundamental decisions that you’ll need to make?
In this guide, we’re going to take a look at deciding on a location for an office or a store, and how you should make your final choice.
Are you ready to learn more? Then read on!
1. Find a Good Demographic Fit
Your store will likely cater to a certain demographic. For instance, if you run an upscale clothing business, you’re unlikely to get a lot of business in a lower-income area. If, on the other hand, you run a tool supply store, you won’t get as much business in a prosperous suburb.
If you’re selling to industry, then being in a residential area makes little sense.
When you’re choosing the location for your business, have a think about who your customers are likely to be. Then think about which areas of the city or town have more of these kinds of people. There you go: you’ve just narrowed down your choice to a handful of areas!
2. Where Is Your Competition?
Opening up very close to your direct competition is a poor idea for a new business. The rival business will already have an established clientele who will probably stay loyal to the old store.
While there are exceptions to this rule, for instance, if the other store has indulged in price gouging and you sweep in offering lower prices. Yet assuming that isn’t the case, opening up across the street from a competitor is going to cause you problems.
While it can sometimes be a good move, it usually isn’t. If you do decide to move in close to competition, be prepared to have a tough fight on your hands.
You’ll be better off avoiding competition, especially if you sell niche products. Find a new area where there’s a gap in the market and move there, instead.
3. Do You Rely on Foot Traffic?
Depending on your store, you may or may not need to be able to draw people in off the street. If your store relies on foot traffic, situating your store by a highway or other busy road isn’t your best bet. You’ll be better off setting up in a pedestrianized shopping district.
The inverse is also true: if you sell heavy equipment or other goods that people will need a vehicle to move, you need road access.
4. Can You Afford the Rent?
When you’re deciding on a business address, there are a few questions you may have. What is the difference between a business address and any other address? What facilities are available at this location?
Yet the first question you should be asking is whether you can afford the rent.
Set yourself a budget! Think about how much you expect to make each month once all other expenses have been taken care of, then think about how much of this that you’d be willing to spend on rent.
Once you’ve got that figure, you’ll need to shop around and find yourself some premises that are right for you. Don’t overextend yourself on rent: you probably won’t make too much in your first few months of operation, and you can always move to a better location later.
5. Are You Close to Suppliers?
Depending on the industry that you’re in, being close to suppliers may make or break your business. Logistics costs can add up fast, so if you need to bring in lots of stock, being close to the suppliers can be a massive boon.
Think about where your supplies will be coming from and how much you’re going to need to spend on them. If you could save a lot of money by being closer to your suppliers, then this should factor into your business location.
6. How Safe Is the Location?
Safety is a big concern for many customers and if your store is in an unsafe area, this may drive customers away. Yet there are some things that you can do to make it more inviting. For instance, you can have security guards on-site or you can make sure that the area around your store is well lit.
It’s up to you to make sure that your customers are comfortable coming to the store, so if you’re in a more dangerous area, make sure that you put effort into making the customers feel secure.
7. Is the Address Prestigious?
Depending on your clientele, having a prestigious address may be a big advantage, but there’s more to it than that. Depending on your business, investors may be driven to invest in your business if you’ve got a particularly good patch.
Think about the long-term plans that you have for your business. Where do you want to go and who do you want to serve? Will having a prestigious address be advantageous for you?
Your Business Location Can Make a Big Difference
It’s easy to be a little blithe when you’re choosing your business location, but you shouldn’t be. It can make a huge difference to your business and can really shape your future plans. Take the factors that we’ve listed into consideration and find the very best location for a business that you can!
For more informative and helpful articles like this one, check out the rest of our site today!