If there’s one thing that shouldn’t be rushed when starting up a new business, it’s the selection of its location. The location of your business can make or break its ultimate chances of success. Even if you’ve come up with the best product or service in the world, you won’t get very far by plunking down your storefront in a random and haphazard way. As eager as you probably are to get the ball rolling on your new enterprise, it pays to take your time and do your research when selecting its location; the following advice is sure to help.
Nail Down the Basics
Before you begin your search in earnest, it helps to be able to visualize the type of place that you need. Throughout your search, you will be repeatedly asked a number of the same questions: How much space do you need? Are you going to need public restrooms? Does your business require special fixtures, plumbing or lighting? Is ventilation a particular concern with the products that you sell? These types of details may seem mundane, but they are vitally important. If you make a major misstep here, your chances of success will be seriously diminished.
Figure Out the Type of Location You Need
If your business is the type of place that people dart into to grab convenience items like prescriptions, personal hygiene items or snack foods, you can rule out a mall right off the bat. Business that rely on a steady stream of customers who need to grab something and go need to be located within a short distance of a parking lot; customers shouldn’t have to wander through a labyrinthine mall in order to find you.
Specialty shops and boutiques can generally get away with – and even benefit from – being located in places like malls and downtown areas. In this case, you’re going to be looking for window shoppers and for those who are willing to make special trips to buy what you’re selling. Malls are filled with people who are in the mood to shop; you can cash in on impulse buys by placing your business in such locations, and the same thing goes for downtown areas and “main street” situations, too.
In some cases, it makes sense to place your business in a unique location. If you sell goods that are going to appeal to business people, for instance, it’s smart to choose a location within or near an office building or business district. Grab-and-go necessities can benefit from being sold in stores that are near public transportation stops. Make sure to consider residential buildings and developments, too – they often provide captive audiences who are willing to pay more for convenience’s sake.
Be Realistic about Costs
It’s easy to get carried away when considering the costs of leasing business space. All too often, business owners are overly optimistic about how they will fare and end up in over their heads in terms of monthly rent, utilities and other costs. Be as conservative as possible when setting your limit for monthly rent; after all, if you can’t pay rent, you can’t stay open. Coming up with an accounting model and conferring with a financial specialist are never bad ideas, either. Err on the side of caution to avoid crashing and burning.
Take Demographics into Account
Large corporations pay big bucks to ensure that their stores are located in areas that make sense demographically. If you are opening your own business, though, you probably don’t have the luxury of paying for an in-depth analysis of the surrounding area. It’s still possible to take an analytical approach to the issue, however.
The first thing that you need to do is identify your ideal customer. Who wants to buy what you have to sell? If your business is completely brand-new, you may have very little data on which to base your analysis. In that case, visit successful, long-standing businesses that are similar to your own. What types of people shop in them? Are they young, old, male or female? If possible, chat up store owners to get a feel for the types of customers that keep their businesses afloat.
There are many great online resources that can be used to gauge an area’s demographics, too. Websites like city-data.com and zoomprospector.com can give you a general idea about who frequents a given area. Depending on your familiarity with the area, you might also want to stop by the local chamber of commerce; the staff there might be able to give you some pointers and advice. Census data can also be invaluable in determining the region or part of town that is right for your business.
Consider Traffic when Choosing a Location
Plunking your business down in a high-traffic area doesn’t necessarily mean that it will enjoy high-volume sales. “If you build it, they will come” simply doesn’t apply to the art of choosing a location for your business. In fact, it’s possible to build a successful business that’s a little off the beaten path; in that case, though, you will probably have to spend a lot more on advertising. As always, keep your target audience in mind. For instance, elderly folks are typically less willing to hoof it to a business, so ample parking is essential. You can generally never go wrong by being located within a reasonable proximity of public transportation, too.
Keep Direct Competition in Mind
Finally, there’s a lot of debate out there about the merits – or lack thereof – of placing a business near its biggest competitors. On the one hand, a competitor who is well-established and thriving has clearly chosen an ideal location demographically; by setting up shop nearby, you can ride on their coattails a bit. On the other hand, unique businesses that have specialized niche markets shouldn’t be placed near direct competition, since there’s only so much business to go around. Ultimately, the decision will depend on careful analysis of the situation.
It’s impossible to overemphasize the importance of location when it comes to setting up a new business. In addition to the preceding advice, it never hurts to assemble a great team to help you. Most importantly, track down a real estate who knows the area like the back of his hand; better still, find one who specializes in commercial real estate and who has a track record of placing businesses in excellent locations. Remember, too, that your own personal convenience matters; don’t choose a location that will involve a daunting or stressful drive each day if you can avoid it. In the end, taking a measured approach to finding a location for your business will net you the best results.