One of the most important decisions that we must make when starting a business is the location that it will have.
The location of a business is a determining factor in its success, especially in the case of retail businesses that require commercial premises where they can serve the public.
A location consistent with the concept or style of our business, with a good influx of public and good visibility, could ensure success; while a location in an unpleasant environment, away from busy areas, and with few access roads for the public, could mean failure.
The three keys to a successful retail business: location, location, location.
If we add to this that today most of the good locations have already been taken, and that once we decide on one it will be very difficult to change it, the location of a business is a decision that we must meditate very carefully.
In this article, we tell you how to choose the right location for your business, along with some related tips.
How to choose the location of a business?
To choose the location of your business, the first thing you should take into account is the type of business you have or are going to set up.
For example, if you have a retail business where you directly serve the public, such as a clothing store or a jewelry store, the ideal location would be one with a good influx of public that allows good visibility of the business premises; but instead, if you have a manufacturing business where you sell wholesale products to retail businesses, the ideal location would be in an industrial zone with wide entrance and exit roads for vehicles.
Or, for example, if you have a fast food restaurant, the ideal location would be in a busy downtown area (since people tend to go to these establishments on impulse); but on the other hand, if you have a gourmet restaurant, you could be located far from the central areas and still be successful if you offer good quality dishes and do adequate promotion.
However, the type of business is not the only factor that you should take into account when choosing the location of your business, there are several other factors that you should also consider:
Public influx
In general, in the case of a retail business, regardless of whether it is located on the street, in a shopping center, or in an arcade, the greater the number of people in the area (the greater the number of people passing through the area), the greater the chances that the public will visit it.
Visibility
In general, in the case of a retail business, the better visibility it has (the better the location of the business or its advertisements are seen by consumers who walk or drive through the area), the greater the chances that the public will visit him.
A piece of advice regarding visibility is to make sure that your business premises, as well as the advertisements that you place on its façade, are seen from both sides of the street.
Accessibility
When choosing the location of your business you must make sure that it is easily accessible; that is to say, that it has easy access roads or enough access roads so that your customers can visit you both on foot and in vehicles, and/or so that your suppliers can supply you in a timely manner whenever you require it.
Easy location
You should also make sure that your business is not so “hidden”; that is to say, that it is easily located by your public (especially for those who come from remote areas and do not know the area very well), that the street is easily located on a map, and that there are nearby and well-known references so that consumers they can find you easily.
As a piece of advice, in case the place you would like to buy or rent is somewhat “hidden“, you should make sure that there are at least two nearby and well-known references that help consumers find it.
Demography
When choosing the location of your business, it might also be convenient for you to investigate whether the town has a high population density, or if it is populated enough to have a good chance of attracting a good number of customers.
Consumers
In general, the closer a business is located to where the consumers that make up its target audience live, work, or frequent, the more likely it is that they will visit it (since consumers will always prefer to shop in the place closest to where they live, work or frequent); however, if a business offers a good quality product, and carries out adequate promotion, consumers will look for it wherever they are.
Competence
In general, locating a business away from the competition prevents it from taking away customers; but in some cases, locating it near competing businesses is the best alternative, since it allows you to take advantage of the influx of publicity generated by other businesses or the “cluster” (an area made up of similar businesses that, when known, generates a good influx of consumers from different locations) that exists or would be created with the income from the business.
In the event that you opt for a store located in an area where there are already businesses similar to the one you want to set up, you must analyze these carefully and determine if there is enough demand in the area to locate one more business.
The environment of the area
When choosing the location of your business, you must make sure that the area and surroundings have a pleasant atmosphere and are in line (“complement”) with the concept or style of your business; For example, if you are going to set up a gourmet restaurant, it is preferable that you look for a quiet, peaceful area, something “residential” and, if possible, with some vegetation in the surroundings; but on the other hand, if you are going to set up a fast food restaurant, it is preferable that you look for a commercial area with a high influx of public.
Premises infrastructure
You must also make sure that the premises have the necessary elements for the proper functioning of your business, and with enough space so that you can operate efficiently and your customers are comfortable, taking into account your growth projections in the short and long term.
Premises parking
You should also make sure that the location has enough parking or parking spaces for the vehicles of your clients and your workers, taking into account the number of clients in vehicles that you expect to have, and of workers that you plan to hire.
Venue costs
Probably one of the most important factors that you should take into account is the cost of buying or renting the premises (in general, the more central or more commercial the area where a premises is located, or the greater the influx of public in this, the higher the cost of the premises will be), as well as the cost of remodeling or repairs that might be necessary.
If you do not have enough capital to buy or rent a central location, it is recommended that you look for a location located within the limits of the commercial areas.
License and regulations
Finally, you must make sure that they will grant you the operating license for the type of business you are going to start (and not assume that because there are already similar businesses in the area, they will also give it to you), and that there are no regulations or restrictions that could affect the operation of your business.
Once you have an idea of the type of premises and the location of this that you want for your business taking into account your type of business, the other factors that we have seen, and your budget, the next step is to find the right premises.
To find premises that are for sale or for rent for your business, you could start by going to specialized sites for buying and selling real estate, Internet classified ad sites, and newspaper classified ads; and then visit the areas where you would like your business to be located (for example, commercial areas or areas where there are businesses similar to yours).
Once you have some local potential for your business, to choose the right one, you must take into account the factors that we have seen previously, the weight or importance that you give to each one (taking into account your type of business, your objectives and your budget), your personal tastes and your intuition.
As a general rule, the more central the location of a store, the higher its cost, and vice versa, the less central the location, the lower it will be.
Tips on locating a business
To end this article, here are some tips related to the location of a business:
1: Consider starting your home business
Depending on your type of business, and if your home has the right location and conditions, consider setting up your business in your home, at least initially.
In addition to allowing you to save a good amount of money on the purchase or rental of premises, setting up your business in your home would allow you, among other things, to work in a comfortable environment and close to your loved ones.
The downside could be that visiting customers might get the impression of your business not being very professional, your staff might not feel very welcome, and you could be constantly distracted by family members (although the latter could be solved by clearly defining the place). where your business will work, and you talk to your relatives so that they respect it).
2: Consider starting your business on the Internet
Also depending on your type of business, consider the possibility of setting up your business on the Internet, also at least initially.
In addition to allowing you to save a good amount of money on buying or renting a place, setting up your business on your Internet would allow you, among other things, to save on products since you would not have to have them physically when you sell them.
The disadvantage could be that customers, seeing that your business does not have a physical location where they can directly see your products or try them, or where to visit you, do not come to fully trust your business.
3: Research the area well
Once you have chosen a place for your business, before buying or renting it, be sure to research the area well.
Before closing the deal with the owner of the premises, take a good walk around the surroundings, and see how many people there are in the area, both on weekdays and weekends, and both in the mornings, afternoons and in nights.
If there are similar businesses in the area, find out how many there are and which are the main ones, and see how many customers they receive; and in case there are houses, make sure that you will not have problems with the neighbors (for example, that they could complain about the noise), consulting the local authority or the neighbors themselves about these.
4: Make sure they will give you the license
Once you have chosen a place for your business, before buying or renting it, also make sure that they will grant you the operating license.
Do not assume that, because there are already other similar businesses in the area, as it happened with them, they will also give you the license, and before closing the deal with the owner of the premises, approach the municipality or local authority in charge of granting the licenses, and find out if they would give you the license for the type of business you want to start.
Keep in mind that it is common for people who, after having invested a lot of time and money in setting up a business, are surprised that for some reason they do not want to grant them the operating license.
5: Be aware of parking lots
Finally, a piece of advice that seems obvious, but is often overlooked, is to make sure that the place you plan to buy or rent has enough parking spaces for the customers with vehicles you expect to receive.
Keep in mind that it is also common for people to overlook parking lots when evaluating a place, and later, when their business is already up and running, they realize that many of their clients cannot find a place where leave their vehicles.
Taking parking into account when evaluating a location is the first thing you should do, as this way you can quickly rule out locations that do not meet your parking needs and, therefore, save time and money in your search for locations.
