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7 Things To Consider When Choosing Your New Business Location

When operating a brick-and-mortar business, choosing the right location can vastly improve your chances of success. If you’re operating a retail or food service business, you want a highly visible location to improve foot traffic and drive impulse buys.

In other industries, you might want a location with lower rental rates, but not one that’s so remote it’s hard for your employees to commute. Even if you operate online, you may still be in the market for a physical location.

Here are some considerations you should make before settling on your location.

1. Accessibility

Make a list of all activities associated with your business to determine if your location is accessible. Consider deliveries, access to busy roads and public transportation, parking, and other factors. If you have any staff members with disabilities or mobility issues, make sure they can enter the building and get around your location comfortably.

Although less densely populated areas are often more affordable, look at what kinds of amenities surround your location. If your business is in a sparsely populated area with no restaurants, shopping, or other activities, you may not be able to attract the right employees. Look through area guides to get a feel for popular attractions and features of potential locations.

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2. Zoning Ordinances

Every city has its own zoning laws which are often specific to your type of business. A zoning ordinance might restrict your business from operating in a certain location. For example, if you wanted to open a day spa in a commercial office building for cost savings, you may need to check your local zoning ordinance.

Local rules and regulations might prohibit retail businesses from operating in the building. By ignoring this ordinance, you may risk hefty fines. Check all local rules and regulations before choosing a location, or ask your realtor for guidance when considering locations.

3. Regional Business Expenses

Startup costs are another factor in your location search. Minimum wage, local business taxes, registration fees, business insurance, utilities, and property values vary based on location. Before settling on a property, look up any associated costs in your chosen city.

While you’re looking for a location, get information from multiple cities so you can compare rates.

4. Budget

Along with regional business expenses, consider your budget. Be realistic about what you can afford each month. Along with the rent, you also have to pay for taxes and utilities. You may also need to pay for renovations or upgrades to the property as well as permits and licenses.

If you’ve been in business for a while, you probably have a good idea of your monthly income, so you can better assess your monthly budget. If you’re just starting out, it can be tempting to use the high end of your targeted monthly sales to create your budget. You’re better off being cautious in case it takes a few months for revenues to start picking up.

5. Competition

If you’ve decided to set up a shop in a dense urban area to improve foot traffic and enhance your visibility, consider the competition. For example, if you’re planning on opening a new pizza restaurant within two blocks of the most popular neighborhood pizzeria, you may want to reconsider.

Some healthy competition may drive business to your shop as customers look to try something new, but you don’t want to open a new business in a saturated market. If you do find yourself amidst a lot of competitors, focus your marketing efforts on what makes you different. Educate potential customers about what you can offer that your competitors can’t.

6. Your Target Market

Finding the ideal storefront at the right price will do nothing for your business if your target market doesn’t live nearby. Before you sign a lease, do some research on local demographics. Figure out what kind of people live in the area, including their age, interests, and disposable income levels. Knowing this information will help you select a location that’s visible and accessible to your target customer. It may also make your marketing efforts easier.

When you’re targeting the same demographics online and off, you can be more consistent with marketing messages. You can also reach local customers by participating in or sponsoring local events.

7. Surrounding Businesses

Another reason to research local demographics before choosing a location is the nature of the area itself. When you choose a location that speaks to your target market, you’re more likely to become neighbors to other businesses that cater to the same type of customer.

This is important because it helps drive more foot traffic from people who are likely to be interested in your products and services. For example, if you’re opening up a coffee shop near a local bookstore, you can attract customers who want to sit down and read the book they just bought.

You may even consider partnering with the store, offering a coupon with a book purchase to build brand awareness. If you want to open a dessert bar, you might consider a location near a popular dinner spot to attract people looking for after-dinner sweets.

Go Out And Find Your Next Location

Now that you’re ready to start looking for a location, make a list of the following considerations. This will help you narrow your search and settle on the best location for your business.

If you need some help with your startup, contact StartupGuys and let us help you on your path to success.

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