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. Most frequent question people ask when choosing a business location are;
- 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. Others 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 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 the 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.