Guide to choosing the right location for a business, plus some tips related to the location of a business.
By Arturo K. Last update 17 Feb 2020 3
Location is one of the most important decisions that we must make when starting a business , especially in the case of retail businesses that require a commercial location where they can serve the public.
A location in accordance with the concept or style of our business, with a good influx of public and with good visibility, could assure us of success; while a location in an unpleasant environment, away from busy areas, and with few access roads for the public, could mean failure.
If we add to this that today most of the good locations have already been taken, and that once we decide on one, it will be very difficult to change it, the location of a business is a decision that we must meditate very well.
In this article we tell you how to choose the right location for your business, and we offer some related tips.
The 3 keys to the success of a retail business: location, location, location.
In this article you will find:
- How to choose a business location
- Tips on locating a business
How to choose a business location
To choose the location of your business, the first thing you should take into account is the type of business you have or are going to start.
For example, if you have a retail business where you serve the public directly, such as a clothing store or a jewelry store, the ideal location would be one with a good influx of public and that allows good visibility of the business premises; But instead, if you have a manufacturing business where you sell wholesale products to retail businesses, the ideal location would be in an industrial area with wide entry and exit routes for vehicles.
Or, for example, if you have a fast food restaurant, the ideal location would be in a fairly busy downtown area (since people tend to go to these establishments on impulse); But on the other hand, if you have a gourmet restaurant, you could be located far from the central areas and still be successful if you offer good quality dishes and do an adequate promotion.
However, the type of business is not the only factor that you should take into account when choosing the location of your business, but there are several other factors that you should also consider:
In general, in the case of a retail business, regardless of whether it is on the street, in a shopping center or in a gallery, the greater the influx of public in the area (the greater the number of people who pass by the area), the greater the chance that the public will visit it.
In general, in the case of a retail business, the better visibility it has (the better the location of the business or its commercials is seen by consumers who travel on foot or in vehicles in the area), the greater the chances that the public will visit it.
A tip regarding visibility is to make sure that your business premises, as well as the advertisements that you place on its facade, are seen from both sides of the street.
When choosing the location of your business you must ensure that it is easily accessible; that is, that it has easy access routes or enough access routes so that your clients can visit you both on foot and in vehicles, and / or so that your suppliers can supply you in a timely manner whenever you require it.
You must also make sure that your business is not so “hidden”; that is, that it is easily located by your public (especially by those who come from remote areas and do not know the area very well), that the street is easily located on a map, and that there are close and well-known references so that consumers they can easily find you.
As a tip, in case the place you would like to buy or rent is somewhat “hidden”, you should make sure that there are at least two close and well-known references that help consumers find it.
When choosing the location of your business, it may also be advisable that you investigate if the locality has a high population density, or if it is sufficiently populated to have a good chance of attracting a good number of customers.
In general, the closer a business is located to where the consumers that make up its target audience live, work or frequent, the greater the chances that they will visit it (since consumers will always prefer to buy in the place closest to where they live, work or frequent); However, if a business offers a good quality product and carries out an adequate promotion, consumers will look for it wherever it is.
In general, locating a business far from the competition allows you to avoid having it take away customers; but in some cases locating it near competing businesses is the best alternative since it allows to take advantage of the influx of public generated by other businesses or the “cluster” (an area made up of similar businesses that, being known, generates a good influx of consumers from from different places) that exists or that would be created with the income of the business.
In case you opt for a place located in an area where there are already similar businesses to the one you want to set up, you should analyze these well and determine if there is enough demand in the area to locate one more business.
Environment of the area
When choosing the location of your business, you must make sure that the area and the surroundings have a pleasant atmosphere and that they (complement each other) with the concept or style of your business; for example, if you are going to set up a gourmet restaurant it is preferable that you look for a quiet, peaceful, somewhat “residential” area and, if possible, with some vegetation in the surroundings; But instead, if you are going to set up a fast food restaurant, it is preferable that you look for a commercial area with a high number of people.
You must also make sure that the premises have the necessary elements for the proper functioning of your business, and with enough space so that you can operate efficiently and your clients are comfortable, taking into account your growth projections in the short and long term.
You must also make sure that the premises have enough parking spaces for your clients ‘and workers’ vehicles, taking into account the number of clients in vehicles you expect to have, and the number of workers you plan to hire.
Probably one of the most important factors that you should take into account is the cost of buying or renting the premises (in general, the more central or more commercial the area where the premises are located, or the greater the influx of public in this, the higher the cost of the premises), as well as the cost of the remodeling or repairs that may be necessary.
If you do not have enough capital to buy or rent a central location, it is recommended that you look for a location located in the limits of commercial areas.
License and regulations
Finally, you must make sure that they will grant you the operating license for the type of business that you are going to start (and not assume that because there are similar businesses in the area, they will also give it to you), and that there are no regulations or restrictions that could affect the operation of your business.
Once you have an idea of the type of location and the location of this that you want for your business, taking into account your type of business, the other factors that we have seen, and your budget, the next step is to find the right location.
To find premises that are for sale or for rent for your business, you could start by going to specialized sites for buying and selling real estate, and classified ads sites on the Internet, and classified ads in the newspaper; and then go through the areas where you would like your business to be located (for example, shopping areas or areas where there are businesses similar to yours).
Once you have some potential locations for your business, to choose the right one, you must take into account the factors that we have seen previously, the weight or importance that you give to each one (taking into account your type of business, your objectives and your budget), your personal tastes and your intuition.
Tips on locating a business
To finish this article, here are some tips related to the location of a business:
Tip # 1: Consider setting up your home business
Depending on your type of business, and in case your home has the right location and conditions, consider starting your business in your home, at least initially.
In addition to allowing you to save a good amount of money on the purchase or rental of a premises, setting up your business in your home would allow you, among other things, to work in a comfortable environment and close to your loved ones.
The downside could be that customers who visit you might get the impression of a not very professional image of your business, your staff might not feel very comfortable, and your family members could constantly distract you (although the latter could be solved if you clearly define the place where your business will work, and you talk to your family members so that they respect it).
Tip # 2: Consider setting up your Internet business
Also depending on your type of business, consider the possibility of starting your business on the Internet, at least initially.
In addition to allowing you to save a good amount of money on the purchase or rental of a premises, setting up your business on your Internet would allow you, among other things, to save on products since you would not have to physically have these when selling them.
The disadvantage could be that customers, seeing that your business does not have a physical location where they can directly see your products or try them, or where to visit you, do not fully trust your business.
Tip # 3: Investigate the area well
Once you have chosen a location for your business, before buying or renting it, be sure to research the area well.
Before closing the deal with the owner of the premises, have a good walk around, and see how much public there is in the area, both weekdays and weekends, and both in the morning, in the afternoon and in the nights.
If there are similar businesses in the area, investigate how many are and which are the main ones, and observe how much influx of customers they receive; and in case there are houses, make sure that you will not have problems with the neighbors (for example, that they could complain about the noise), consulting the local authority or the neighbors themselves about these.
Tip # 4: Make sure you get the license
Once you have chosen a location for your business, before buying or renting it, also make sure that you are granted an operating license.
Do not assume that, because there are other similar businesses in the area, as well as what happened with them, they will also give you the license, and before closing the deal with the owner of the premises, approach the municipality or local authority in charge of granting the licenses, and find out if they would give you the license for the type of business you want to start.
Keep in mind that it is common in the case of people who, after having invested enough time and money in starting a business, are surprised that for some reason they do not want to grant them an operating license.
Tip # 5: Parking
Finally, a tip that seems obvious, but that is often overlooked, is to make sure that the place you plan to buy or rent has enough parking spaces for customers with vehicles you expect to receive.
Keep in mind that it is also common for people to overlook parking lots when evaluating a location, and later, when their business is already operating, they realize that many of their clients cannot find a place where leave your vehicles.
Taking into account parking lots when evaluating a location is the first thing you should do since you can quickly discard locations that do not meet your parking needs and, therefore, save time and money in your search for locations.
- The location of a business is a determining factor in its success, especially in the case of retail businesses that require a place to serve the public.
- To choose the location of a business, the type of business must be taken into account, but also other factors such as the influx of public in the area, the visibility and accessibility of the premises.
- To search for premises, you can go to real estate buying and selling sites on the Internet, and classified ads in the newspaper, and go through the areas where you would like your business to be located.
- Some tips related to the location of a business are considering the possibility of setting it up at home, and making sure that you will be given an operating license before purchasing the premises.