Too many would-be entrepreneurs become so excited about launching their new business venture that they fail to invest the necessary time in finding the right location. But as your company's image and its location are closely tied, finding the right place to set up shop can be critical to your success.
If you're in retail or hospitality, think about the location of the business from your customers' point of view. For example, a large retail space in an industrial area may be affordable, but may not attract enough business. On the other hand, if your business involves manufacturing, wholesaling, or selling strictly over the Internet, then selecting a location will not hinge on customers visiting your business.
Here are some tips to make choosing the best location for your business a little easier:
- Know your business. Understanding the needs of your business is the first step in finding a location. Will customers visit your location? Do you anticipate walk-in business, or will customers call for appointments? Does your business make use of natural resources? How are your goods delivered? Does your business involve chemicals or excessive noise that might fall under the zoning restrictions? Make a list of your business-specific needs.
- Find your customers.You need to identify who your customers are and how you can best meet their needs. If you are moving a business operation into a new city or rural area, find out as much as possible about population trends there. The U.S. Census Bureau provides plenty of helpful data on population trends and statistics. You can also contact local and state agencies for their input. When you have gathered as much information as possible, start creating your own demographic profile. Once you know who you're trying to reach, you can determine where you're more likely to find customers. For example, if you're opening an after-school center, you'll want to open it in an area that not only has many families, but also has a high number of two-income households. Good research will help you find such a location.
- Get a flavor for the community. Before deciding to set up shop somewhere, investigate the community. Read some of the local newspapers. Visit the library and do some research on the history of the place. Speak with other small business owners in the area. Ask them if their business is succeeding and if they think your business would do well there. Try to find out how receptive the established business community is to new businesses that come to town.
- Scope out the competition. For some businesses, this may not matter. Five Internet businesses could be in the same building and nobody would ever know it. However, if you're opening a retail business, a restaurant, or service-oriented operation, you'll want to know how many similar businesses are located nearby. Some communities feature areas with several similar businesses, such as the diamond district in New York City, with dozens of jewelry stores on one particular block. In other cities and towns, you may not want any competitors in the immediate area. The key is to determine whether you can gain enough of a market share. Do a competitive analysis, and if you scope out competitors, see if you can gain a competitive edge by offering something your competition does not. If you're moving into an area with stiff competition, make sure you have enough resources to hang in there while you make a name for yourself.
- Consider traffic and accessibility. These factors will be more important to some businesses than to others. If your business does not have customers driving to your location, then traffic and accessibility are an issue only for your employees. But parking, foot traffic, automobile traffic, and sidewalk accessibility are all important things to consider.
- Assess the building. Before signing any kind of lease or purchasing agreement, ask yourself some important questions about the condition of the space you're considering. How old is the building? How old is the roof? Is everything up to code? Has the electrical system been improved lately? Can it handle your technological needs?
- Balance cost with other factors. Obviously, the cost of the location is important to consider, but be sure to look at the big picture as well. For example, no matter how attractive the price of a site might be, if your customers can’t get there easily, or if the infrastructure can't support the necessary wiring for your Internet company, your business probably won't last very long. Spending more on a good location will probably pay off in the long run with lots of business.
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