Choosing the Right Location for Your Business
Every business owner must understand how location will or will not contribute to the success of that business — and choose a place accordingly. This is one of the most important and challenging tasks every entrepreneur faces when starting a new business. Unfortunately, many would-be entrepreneurs become so thrilled about kicking off their new enterprise that they fail to invest the necessary time in finding the right location.
With the knowledge that a poor location can shut you down for good, a thorough commercial property search is vital to every serious business. Obviously, there are other factors that contribute to the success of any business; like good customer care, advertisement and a viable product, etc. But how will potential customers come in contact with your merchandise or experience your services unless they can come to you. You should be able to get them through your door. And the key to your front door is your location!
Factors to be Considered When Deciding on the Location of the Business
Though there are many factors to consider when you are looking for a property to house your business, make sure you ask yourself these four important questions:
- Is location really important for the success of my business?
- What type of location is best for my business?
- How much rent can I afford?
- Is my proposed location appropriate for what I plan to do there?
Is Location Really Important for the Success of My Business?
Typically, the type of business determines whether location is important to its success. For some businesses, location can mean the difference between abundance or a drought. But for some others, finding the right location may be less important or completely irrelevant. For example, picking a good location is fundamental for a customer-driven business like a retail store, restaurant or a clothing boutique. Your location can be your best form of advertisement if you are located in a busy area. However, for service oriented businesses like plumbing, pest control or cleaning; businesses that render services at the client’s home or at a company’s place of business, location is less important. With such businesses, you can pick a low cost place to save on rent or set up a home office.
What type of location is best for my business?
Bearing in mind that different types of businesses attract customers differently, the best approach for you is deciding on the factors that will give your business the highest customer patronage and picking a suitable location accordingly. The following are important considerations:
Traffic: A high-activity area can draw in customers because of its prominence to the public and because of its location. For instance, if a business that needs direct customer patronage is tucked away in an isolated location, it will find it tougher to attract customers than a business in a well trafficked area.
Convenience: The business should be located near your potential customers, near homes, offices or commuter pathways. Adequate parking is another common need for many businesses. If about 50 percentage of your customers will come with their cars and there is not enough parking at your selected spot, it is probably best to look somewhere else. Consider your customers, put yourself in their shoes and think like them. For example, if you are dealing with the elderly or pregnant mothers, they may have a totally different idea of “convenient”.
Similar businesses: Find out if it would benefit your business to be around similar businesses that are already bringing in the kind of customers that you want. A women’s foot ware store, for example will profit from being near other female shoes and clothing stores. Women who are shopping for clothes tend to shop for matching shoes and accessories and are likely spend a few hours within a particular area. However, do not underestimate your potential competitors. Don’t always think you can steal some of your competitor’s business by offering a better price or service as many businesses can have passionately loyal customers. The key is to do competitive analysis, scope out your competitors and see if you can gain enough of a market share.
Reputation of the location: How a neighborhood is seen or perceived may attribute to any of the following results:
The type of customers that will visit your business– for example, xxxxx shopping mall in Abuja Nigeria is known for its top of the line shops, it for the most part draws in rich customers.
Safety Concerns – No customer wants to feel threatened and uncomfortable while visiting your business neighborhood. They would rather take their business elsewhere than endanger their lives and belongings.
Do a comprehensive research. Find out how businesses have succeeded or failed in the neighborhood you have decided on. Let the analysis guide you to picking the best place to open your business.
How much rent can I afford?
Price is just as important as being in the right neighborhood. It is crucial to know how much you can afford for rent in relation to your start-up capital and your forecasted business’ income. This will impact the neighborhood where you look and the spaces you consider.
Do not forget that commercial leases and property prices can be negotiated. Therefore, it helps to know what the market rate is in your choice area. If you are renting, talk to other tenants in the building. If you are purchasing a building, you can look into the cost of other buildings in the area.
Is my proposed location appropriate for what I plan to do there?
The location you pick should be convenient and legally acceptable for whatever you plan to do there. Judging from other afore mentioned factors, a certain spot may be perfect for business, however if it is not zoned for the type of business you plan to do, you will be asking for serious trouble. Never sign a lease agreement without making sure your business will be permitted to operate in that space. Your city zoning board determines what business activities are permissible in a given location. If the board has an issue with any of your business activities and cannot find a way to accommodate your business, it’s best you find another location. Furthermore, you will require a property that has the capacity to handle the sort of business that you have set up. Be sure the space will work for you. Remember you are the one that will work there every day. Be sure the space works for your customers. Remember, No customers means no business. One approach to make sure of this is to check whether the same type or related businesses have operated where you plan to set up shop. In the event that these prior businesses have failed, figure out why they fizzled out and see if it’s something your business can avoid. If not, just go find another place jare.
The popular old axiom “Location location location” is possibly more important for a commercial property that a residential one. Where you pick to set up shop is very important to the survival of your business. Never sign a lease without doing a detailed research in your business needs and any property you wish to lease.
Choosing the Right Location for Your Business © www.businessplan.com.ng