As we covered in a previous blog, while not every business needs to have a physical location, there are still many undeniable benefits for small businesses to have a brick-and-mortar space. However, choosing a business location is not something that can be done on a whim: it is a major business decision that requires careful consideration and research. Choosing the wrong location for your business can hamstring your operations and even potentially lead to legal issues, as certain types of businesses have unique location requirements.
Choosing an official business location takes planning and a personal evaluation of your business needs. With these helpful tips though, you can better identify what type of location would best serve your expanding business.
How to Choose the Right Location For Your Business
Finding a place for your business isn’t just about picking a building: you must also consider where the building is located and how this could affect your operations. There are numerous factors that go into picking the best location for your business. Consider the following 15 options to be an overview of some of the most important.
Before getting into the finer details of your ideal location, it is important to consider:
- Local Laws: What city and state are you working from? Income and sales taxes vary greatly from state to state, as do various regulatory requirements. Some states are friendlier to entrepreneurs, meaning laws are better tailored to their needs. Additionally, many cities have zoning laws that limit what types of businesses can be located in certain areas, so do your research before you sign a lease.
- Local Economy & Finances: Along with the many legal considerations for your area, you should ponder some other local factors, such as average rent, availability of labor, and government economic incentives. All of these can dramatically affect an area’s affordability.
- Cost: Perhaps the most (and obvious) important factor of all – can you afford the location? This doesn’t just mean rent either: is there free parking? Would it be more expensive to operate here instead of somewhere else? Will the additional expenses of the area force you to charge higher prices to your customers?
- Foot Traffic: Pedestrian foot traffic is extremely important in retail, making it important to find a high-traffic location if you run a retail business. In contrast, if your business requires confidentiality, you might not want to be located in a high-traffic area. Consider what best suits your business and your target audience.
- Accessibility & Parking: How accessibility is your facility for everyone who will be using it – customers, employees, and suppliers. How easy is it for cars to get in and out of your parking lot? Do you have ample parking space? Do you have accessibility options for people with disabilities?
- Competition: Are there any competing companies located nearby? This can be a good thing sometimes (you can sometimes catch the overflow of existing businesses), but other times it can make marketing a lot tougher.
- Proximity to Other Businesses: What other businesses and services are in your general area? Could they be potential customers or business partners? Could they potentially enrich your own business (for instance, a health food store might find that setting up shop on the same street as a gym works towards its advantage)?
- Demographics: It doesn’t matter how nice your location is if your target audience is nowhere to be found. Does the community surrounding your target location match your customer profile? What skills do you need and are the people with those talents available in the area?
- Image & Credibility: Does your location seem consistent with the image you are looking to convey with your business? Would a “high class” address add to your company’s credibility.
- History of the Site: Some locations have a lot of history, so it is a good idea to educate yourself before settling on a location. Ask about previous tenants. You might find out that several businesses have already failed in a location, which could impact public opinion of your business. What types of businesses have worked from this location before? If they failed, what was the reason?
- Condition of the Facility: How old is the building? Does it have a history of problems? Has it been renovated recently? Is everything up to code? The answers her could determine whether or not you’ll have to spend a lot of money.
- Utilities: Are utility costs included in your lease? If not, what kind of security deposits do the various utility providers require? Will you have to provide your own janitorial services?
- Infrastructure Requirements: Does the location have adequate electrical, air conditioning, and telecommunications service? Does your business have any special needs that must be met? Will your business be able to provide free wi-fi (customers increasingly expect it)?
- Cargo Needs: Do you require easy access to transportation for shipping. Will you need a space large enough for trucks to load and offload product? Does the location include ample storage space?
- Growth Potential: Does your location have room to grow? In a few years, you might need to hire more employees or accommodate new inventory, so you’ll need to be sure your location can handle both your current business and where you see yourself in the near future.
These are just some of the most important factors to consider when looking for a business location. This is a choice that will have a serious impact on the future of your business, so it is vital that you carefully consider your options before making a decision. Hopefully, these tips will help you make the best possible choice!
If you have any questions about these or any other legal documents you will need for the future, talk to the professionals at CCSK Law! You can contact us at SUPPORT@CCSKLAW.COMor (219) 230-3600.