Factors Affecting The Selection The Right/Best Business Location
How To Choose A Good Location For Your Business – Why Is This Important?
Understanding your customers is key in selecting the best location for your business. To get your business location right, you should carry out a careful assessment of whose needs your business is meeting and what type of people fall into such demographics.
If you would be selling products needed by high-income earners, siting your business in a rural area or suburb is the first step in perfecting failure.
Siting A Business
What are your reasons for choosing a location for a business? Why is location important when starting a business?
A very important consideration for a good business location for any prospective investment is the socio-cultural and economic demographics of the surrounding communities. A region may be very are good for reselling ventures but highly unsuitable for production business. Another one may do well for retail operations but not ideal for industrial use.
Therefore as a business owner, an in-depth study of the host community before deciding on which location to site your business is crucial.
Factors To Consider When Choosing A Business Location
When it comes to the topic of choosing a good location for business, it is like a do or die affair for some business owners to decide, for others, it doesn’t matter. Location is perhaps the most important decision you make concerning a business.
One of the most common sayings in business is that success comes from location, location, location. Your location, no matter what your business is, plays a big part in how well your business does. It means almost everything in a brick and mortar business.
How to Choose the Location of a Business
What is the importance of location in business – how do you choose the best? The performance of a business is related to its location. A good location is an excellent competitive advantage for small businesses because they are easily accessible, whereas a poor location can ruin a business
In this post, I want to share with you everything you need to know about choosing a business location. Location decisions, though infrequently made, must be carefully made since they do have significant long-term impact or lasting effects on the organization. I will be sharing some tips for choosing the right business location.
Influencing Factors that Affect Location Decision in Business
To identify the best location available, certain determining factors that influence the decision process, and some are discussed below;
1. Nearness to Markets
Proximity to market can be important to enterprises that supply perishable goods such as groceries. Supermarkets prefer central location in densely populated areas to minimize distribution costs.
When the cost of transportation is high relative to the value of the product, nearness to the market is important.
Though, developments have taken place in refrigeration and containerization; hence it is possible to transport materials over long distances with minimum risk of spoilage.
However, refrigeration means extra cost that can be significant for a tight-budget firm. Therefore, the selection of a location which minimizes the total cost cannot be overemphasized.
2. Government Policies and Taxes
Some policies and taxes favour certain businesses while they discourage others. Gas related businesses are encouraged while cigarettes and alcohol are heavily regulated. The multiplicity of taxes, regulations and approving authorities as well as the attitudes and styles of officials who implement these policies and programs can be detrimental to small businesses.
3. Community Factors
Many communities may attract business location with incentives. Others for religious and cultural taboos will discourage certain businesses in their communities. The intolerant attitude of the community to strangers and the level and frequency of violence can restrict business inflow.
Choosing a location for your business? These are some vital things to consider.
Steps in Making Location Decisions for your Business
Choosing a business location varies from a new organization and an existing one. The size of the organization will also influence location decisions. However, here are some choices you need to consider to choose a business location;
1. The Location of your Customers
You want to have customers near you so you are their first choice when they need your services. When your business involves customers to physically come to your office location to patronize your business, consider a spot that is easy to find. You don’t want to your customers calling you up to five times just to locate your office do you?
2. Consider the Competition
It is important to know whether the locality in which you intend to run your business has competition that is either a threat to you or is complimentary to your business.
If the competition is likely to attract people to the area who were subsequently to find your business attractive, then it is useful. If the competition is likely to alienate people or put them off the area or be a direct threat to you then a different location might be advisable.
Not only can it be hard to compete when you have an established competitor near you, but it can also be difficult to get a business loanif your area already has a strong competitor’s presence.
3. Supply of Labour
When choosing a business location, you should ask yourself if there are potential employees in that area and what will their commute be like? If you are thinking of employing people in the future or even at the startup of the business, then you need to know whether there is a local supply of labor that would be appropriate for your business.
This requires anticipation of what type of labor force you want, whether you want part-time, freelance or permanent staff and what sort of age or gender demographic you’re looking for.
4. The Size of the Premises
Equally, the size of the premises is an issue. It is difficult to estimate how much space you will need, what is important is to know that you can acquire extra space if you need it, either in the same building or nearby at a reasonable location.
5. The Issue of Safety
The issue of safety arises as well as both yourself and any employees or customers who revisit the business. This is not an area you want to be politically correct about. You should know what areas are considered okay and what areas are considered a bit rough or areas that you would not want to spend a lot of time in.
Whatever the potential benefits may be economically, if safety is an issue it’s a no go area. It simply won’t work if people you really want to visit the premises are afraid of the area, and will not go there.
If your customers are worried about being mugged when they come to you for help, they will just go somewhere else.
Also think of the costs associated with repairing your own business after repeated break-ins.
Location is one of your biggest considerations with your company. Many businesses don’t succeed because they chose the wrong location. Don’t let that happen to you. Maximize these tips on how to choose the right location for your business.
Other Influencing Factors To Consider When Choosing The Best Location For Business
Cost Implications —–» Investors can choose to site their business in areas where rent or purchase of land and building is affordable and where they can actually operate within cost-effective limits.
Space Availability—–» Business owners choose areas where they can easily get access to space especially during the process of expansion.
Basic Amenities —–» A location may be selected for business based on the proximity of professionals to support the business. Access to roads, steady power supply and ease of acquiring inputs may affect where a business would be situated.
Personal Convenience —–» A business site may be preferred for personal reasons. Many people choose where to locate their business considering how far they have to drive each day.
Business Taxes —–» Often times, many investors try to get a compromise between high returns and low tax rates in choosing a location for their business.
Competition—–» The level of competition with your business may vary from place to place. While considering where to put up the business, you should look at areas where competition is not too keen as would kill your venture in its early stages.
While searching for the best location for your business, you need to ask yourself the following questions;
—–» Is the area suitable for such investment?
—–» How easy would it be developing a good relationship with the landlord and neighbors?
—–» Are there existing laws and policy relating to such business in the area?
—–» Is the community secured? How safe is your business in that area?
—–» How good is the facility? How much repair needs to be done? Is there an opportunity for expansion? Is it comfortable for customers?
—–» What is the competition like? Are there rooms for local marketing campaigns?
Assessing your primary business location is focal to making the best decision when siting a business. While product distribution requires quick access to highways, rail and plane transportation, a retail business would require visibility and decent parking space.
Businesses generally have core requirements. You should consider this while making a choice of where to set up the business. A comprise may hamper lots of business operation and spell doom for the investment. If you get your location right, your business, employees, and customers would be an advantage in the most profitable way.