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10 Things to Consider when Choosing a Business Location

Filed in Articles by on August 14, 2020

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10 Things to Consider when Choosing a Business Location.

Things to Consider when Choosing a Business Location – It has been shown that businesses flourish or flounder simply because prime or bad locations were found. The most frequent question people ask when choosing a business location is.

Choosing a Business Location

  • The population and growth potential of the area?
  • What are the income, age, and occupation of the population in the area?
  • What type of trading takes place in the area, commercial, industrial, residential, or seasonal?
  • Are new industries scheduled to open in the next several months?
  • How many nearby firms are in the same line of business as you?
  • Do they have any apparent advantages over you?
  • Which businesses in the area will be your biggest competitors both direct and indirect?
  • How many nearby firms look as though they are barely getting by?
  • How many nearby firms went out of business in this area last year? How many of the businesses in the area look prosperous?
  • Is the supply of labor adequate and the necessary skills available?
  • Is there adequate fire and police protection?
  • Will crime insurance be needed and available at a reasonable rate in this area?

The list below is factors to consider when finding a location for your business

1. Quality of Residency

Ideally, the location you choose should permit a good quality of life. There should be little air, noise and water pollution, as well as parks and restaurants to go to and relieve stress. Other factors to consider are climate and amount of rainfall.

2. Tax Advantages

Find out what the local rate is and if there any incentives for startups.

3. Environmental Restrictions

You should be aware of local bylaws and constraints that might limit the level of production or expansion, especially if you plan to start a manufacturing business. In fact, many cities and municipalities discourage certain types of manufacturing because of noise, pollution concerns, and waste disposal complications.

4. Labor Pool & Market

Most businesses need a convenient source of labor in their area from which to hire machine operators, office workers, supervisory personnel, technicians, and so forth. If your operation requires skilled technicians, you should locate in or near a center with skilled workers. Likewise, if unskilled workers are required, you should locate in an area where unskilled labor is abundant. Keep in mind that pay scales vary from city to city and even from one area of a city to another. Find out what other businesses in the area pay their employees.

5. Accessibility to Customers

To help determine how accessible a potential location is to your target customers, answer the following question: “Do my customers come to me, or do I go to them?”

If customers come to you, try to locate as close to your customer base as possible. Make it easy for your customers to get to you or for you to get to your customers.

Your location should also be convenient for the staff. You want to attract the best people to your business, especially if you are starting a service company.

They too will appreciate a convenient location. If you are running a manufacturing business, it is necessary that your location be close enough to your customer base to reduce shipping costs and transportation time, as well as allow person to person contact when necessary.

6. Age, Family & Income Demographics

Find out what people’s ages are in the area. An older, established community generally has different shopping needs and tastes than a younger developing area consisting of many families with small children.

Also, determine the income levels of the people in the community.

Obviously, families of low, medium and high incomes will have different spending habits that could make or break the acceptance of your retail outlet or service establishment.

7. Area Trends

Before making the commitment to buy or lease a site in a particular area, determine whether the area is progressive or stagnant. Find answers to questions such as:

Are there any changes planned for the area by city planners? Are any schools, roads, highways, stadiums, or shopping centers planned for the near future?

Will changes in other areas of the city affect this area? Will these changes cause people to move in or out of the area? What is the overall potential for economic growth in the area?

8. Friendliness of Business Climate

Find out how the neighborhood has supported other merchants, what its history is relative to businesses, and whether the demographics of the community are agreeable.

9. Nature of the Product or Service

The nature of your product/service influences which area of the city you should locate your business. For example, if you sell goods that are for the most part purchased on impulse, e.g., you sell flavored popcorn, and then high traffic and visibility are critical factors to consider when choosing your area and location. On the other hand, this concern is less important for products/services that customers are willing to go out of their way to find

10. Transportation Routes

Access to transportation is essential for distributing your products to your markets and for getting the raw materials and supplies you need, as well as allowing customers to get to you.

Good transportation routes are particularly important for manufacturing and wholesaling firms. Determine what is available such as buses, taxies, railways, and freeways, and at what costs.

11. Competitor Saturation

Find out the number of competitors within various distances of the proposed site. Determine where they are located, how long they have been there, and how strong they are. Too many competitors in your area may mean a saturation level has been reached obviously, this is no good.

However, a little competition is healthy and even beneficial. Having competition allows you to save a little on advertising as customers visiting the competition, are also likely to visit your establishment and do some comparison-shopping.

12. Traffic Flow

Instead of analyzing a prospective location when the landlord or agent decides to show it, make it a point to visit the location at all hours of the day or night, for a more objective picture of the premises in regards to traffic, lighting, security, sign and display needs and so on Count the number of pedestrians and/or automobiles passing the proposed location.

How many people pass by during your business hours? Estimate the number of men, women, children, or other target groups.

Count empty spaces in the parking lots of competitors. Also, determine if your location is highly visible to passing traffic convenient and whether it if more convenient for vehicular or foot traffic.

Also, find out what major businesses nearby that may generate customer traffic? Usually, banks, fast food restaurants, and theaters generate a lot of customer traffic.

FINDING the right location for your business is one of the most challenging tasks most people undertake, regardless of the type of business you plan to start.

One of the most important decisions to make when establishing a new business, or when reviewing the state of your current business, is what form of business location to use.

Each form offers advantages and disadvantages, so review the following factors carefully before making your decision.

What’s your take on this? We believe this article was helpful, if yes, don’t hesitate to share this information with your friends on Facebook, Twitter, Whatsapp.

CSN Team.

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