Many business experts will tell you that location can determine the success of your business. This is not often the case if you have an online business. But offline businesses such as a restaurant or tattoo parlor do require a physical presence.
If you find that you don’t know how to go about finding an ideal business location, hire a professional who is up to date with available properties like Pall Mall Estates.
Who are Pall Mall Estates? Pall Mall Estates is a property company that helps businesses both small and large, find a rental property.
Their services include providing:
- Quality office accommodation
- Commercial retail space for small business and multinational corporations
- Industrial yard space to house manufacturing and production equipment
- Trade property for rent
- Studio space for rent
- Workshop space for rent
- Residential property for sale
Why does location matter for business?
The reason why location is important is due to these four key factors:
- The operating costs
- Customer service
- Potential revenues
- Skilled labor
These four factors are key considerations when it comes to finding a business location. But mainly, your choice of location is influenced by two factors: Supply factors and demand factors.
The supply factors pertain to the operating costs in regards to the location. Here we are looking at:
- Labors costs – are you looking at a local business location or a foreign business location? Depending on the location of your business, this will determine the how much you will pay for labor.
- Transports costs – transports costs include the cost of transporting raw materials and the cost of getting the end-product to the customer. If the transportation costs of the raw materials are high, the business location should be near the supply source.
- Land costs – These are costs concerning the land and the business buildings, whether you intend to rent or buy.
- Energy costs – How much energy does the business need? Some businesses need considerable amounts of energy for their operations.
Community factors such as political stability, local services, local amenities, and government policies concerning business setup and operations also fall under the supply factors category.
In regards to demand factors, we are looking at customer service, skilled labor, site suitability, image, and expansion potential.
All these and some other factors play an important role towards the success and growth of your business, which is why location is of key importance.
How does location affect your business?
With a physical location, the customer base is specific and relatively small. So you when you are thinking about a location for your business, what type of business are you setting up?
For example, you cannot set up a daycare center in an area where the largest portion of the population is people who are in retirement age. Just as much as it would not make sense to set up a business in a location where the competition is already stiff and the consumer group is small.
So when you come down right to it, your business location determines the success and growth of your business. You want to set up your business in a location where the potential growth for revenue is high.
This, of course, has to be an area where the consumer group is relatively large and the demand for what you are offering is high. You also need to look at the competition when you are considering a business location, as this will affect the growth and success of your business.
What to look out for when choosing a location for your business
Before you start looking for the ideal location for your business, you need to know exactly what is that you want. What can you tolerate? How much can you afford to pay? What do you want to have?
You need to take time to figure these things out. The process may take time and may seem tedious, but it is essential. Some startup mistakes are repairable, but a making a poor decision when it comes to your business location is something you cannot easily repair if you can repair it at all.
And if ever you want to hire or contact a professional about your business location needs, make sure to tell them exactly what you want. Talk about demographics and your target market. Explain to them that you would want a location that is near complementary businesses, but not competing businesses.
With that said, here are some of the factors you need to consider when choosing a location for your business.
- Type of business you are setting up – depending on the type of business you want to start, this will influence your decision on the location of the business.
- Demographics – who are your customers and are they located near your business? Can your customers support your business? Basically, the demographic profile you create of your target market can help you make a decision about your business location. Also, consider your labor force. What skills are you looking for and is the skilled labor available? Are there resources to serve the needs of your employees? Is there affordable housing? Can your employees find recreational opportunities, schools, and hospitals? Your business location should be near local services and amenities.
- Foot traffic – if you are looking to generate good revenue, your business location should be in an area where there is a lot of foot traffic. But on the other hand, if the business you want to set up requires discretion, you may want to set it up in an area where traffic is low.
Other factors you need to consider include competition, operating costs, and image.
What if you can’t get the location that you want?
What do you do if you cannot find your ideal business location?
If you cannot find your ideal location within your area, consider setting up your business in a different region. However, to be able to do this, you may want to consider the cost of moving among other things.
The other option would be to rethink the type of business you want to start. Location is of utmost importance to retail and food businesses compared to professional service businesses such as accounting. If you find a location, but it is not your ideal location, think about using smart marketing strategies to help increase traffic to your business.