Starting a business is never an easy process. What may seem like small decisions at the time can become crucial factors and mean the difference between success and failure down the line. One area that can be a major headache for startups and small businesses in general is location. The physical situ of your company can have a massive impact on your bottom line, and there are many things to consider when choosing it – some of these depend on the type of business you run. Here are some tips for choosing a location for your business.
There are plenty of reasons your business needs to be located somewhere easily accessible. If your company is customer facing, for example a clothes store or a coffee shop, it has to be easy for customers to locate and reach – i.e. not in the middle of nowhere. A business that relies on a lot of footfall should ideally be in an area with other businesses, and close to transport links and/or residential neighbourhoods. Other visits are also a factor – if your business constantly receives parcels the location should be suitable, and if you receive many visitors for meetings, etc, you might need a carpark. For non-client facing businesses out-of-town locations can often be much more cost-effective, and larger should you want to expand.
When you choose your location it’s important to be aware that there are security factors involved. Of course, most businesses will have cameras and other security devices in place, but that doesn’t necessarily ensure safety, especially in an area which is isolated, or has a high crime rate. A location deemed higher risk security-wise can affect your insurance premiums, leading to a larger monthly outgoing amount. Knowing local government released crime figures, as well as making common sense assessments about the rate and/or type of crime your location (and industry) would attract, will help you minimise the risk.
Whether you want to be close to your competitors largely depends on the type of business you’re running, and the state of the current locale. It can be healthy for a retail business to have some local competition – customers shopping for clothes, for example, are likely to browse extensively before they buy (or buy multiple items from different stores). If you have the confidence that your products will outshine the local competition then a busy marketplace might be ideal – or if you have an effective marketing strategy that combines digital channels with street-level, high quality printed materials. But if there are too many competitors in the same location it may be wise to seek fresher territory in which to operate. It’s difficult – but not impossible – to find an area where a product or service is entirely unobtainable, but if you do then setting up shop and cornering the market can also pay dividends.
Local skill base
It’s likely that your employees will be from the local area, despite the increase of work-from-home initiatives. So when you look at location you must take into account the local skill base – can you get what you want from your employees? This is especially prescient if you require employees with specialised skills. It’s important to also take into account employment rates. If your business requires a constant supply of materials to make your products with, it may be useful to have suppliers close by, that way they can help you out if there is an unforeseen shortage, or if you are suddenly met by huge demands and need to produce quickly. Recruitment agencies can be a valuable source of information, sometimes sending example CVs as a free service. Or you can place a job advertisement and gauge the responses.
Running a business requires realism, but there is room for optimism within that. You need to be prepared for growth, whether it’s gradual or rapid. Will your location allow you to expand? You may need more space for employees, for more products, more capacity for production. It may be far more costly to move location than it would be to start with a larger space, even if business is booming. That means accurate, or at least realistic, forecasting for your business’s chances of success.
Location, location, location. It is such a crucial factor in the life of any business, and something that should be considered extremely carefully if you’re beginning or moving. Hopefully these tips will help you out.