When starting a small business, finding the right location is an extremely important factor in becoming a successful company. When deciding on a location for your business, you should consider a few aspects of your specific situation: budget, business/space type, brand, vendors, safety, and demand for your product. Each of these elements will vary depending on the business type. Doing research to find a location that fits your business profile is extremely important for your business’ success.
Finding a location within your company’s budget is essential. You should consider all potential costs, not just rent or purchase price. Any location you choose has additional costs you should factor into your budgets, such as taxes, renovations, utilities, and economic incentives. Also, discuss your potential location with other business owners in the area to ensure their satisfaction with the costs of operating.
When choosing a type of space for your business, you have three options that vary in cost: shell space, spec space, and second-generation space. A shell space is a suite or floor in a building that has a floor, walls, and a roof but no interior improvements. Building out a shell space is expensive, as you build basically from scratch. Occupying a spec space is far less expensive, as its landlord has already finished building out the space with an expectation of what potential tenants will want. Usually, the most cost-effective method for starting a business is using a second-generation space. A second-generation space is a building previously occupied by a business similar in type to yours; second-generation spaces already have the electrical connections and design layouts necessary for your business. For example, if you want to open a restaurant, your initial build-out costs will be far less if you can find a space that was previously already a restaurant.
You should consider the type of business of your company and which option is best for you and your customers. Decide how much of your interior needs to be uniquely yours, and compare that vision with potential build-out costs at any locations you consider.
Think about your brand and where your product will draw interest. Study market trends and income levels in various neighborhoods, and compare them to your target demographic. Be honest about who your business should target, and prioritize locating your business somewhere accessible for those people.
Your business needs a location reachable for all your vendors and suppliers. Maintaining a quality product demands a fully stocked inventory and the avoidance of any delay in product shipment. When considering a location, research your vendors’ shipping routes and supply centers, and choose an area that makes acquiring the goods you need easier for your suppliers and cheaper for your company.
Safety is paramount to the success of your business. Choosing a location where you, your customers, and your staff feel safe eases the minds of all involved and makes for a more relaxed environment for your business. Also consider the safety of your product, as some businesses’ inventory may be a higher risk for theft than that of others.
Demand for your product should factor into where you locate your business. If possible, choose a location where competition is low. Find an area where access to your product or service is not easily accessible. You should also consider whether your business compliments others in the area. If your company’s service goes hand-in-hand with that of another business in the area, both companies can benefit from shared clientele.
Researching potential markets and locations for your business is vital to your success. Ensure you make informed decisions that will make your business an essential part of a community. Provide a service or product to an area where you have confidence in your service’s necessity to the community.