Location is critical for any successful business, foot traffic and accessibility having large effects on how many potential customers you have coming through your doors. Use these five tips to determine what property is right for your business:
- Buying or Leasing?
The first decision to make when thinking about the ideal location for your business is whether you plan to buy or lease the property. If you’re planning to expand your business within the timeframe of a few years, but are starting small, leasing a property is likely a better option for you. If you’re looking for a second location, and business is going well and you feel comfortable purchasing a building, buying a property is the better decision. Factor in your company’s immediate requirements and future needs into the decision to lease or buy.
- Zoning
Zoning becomes especially important if you plan to build your business from the ground up. There are certain regulations that all commercial properties must comply with regarding structure, ADA compliance, and area specific regulations. Depending on the type of business you own, zoning restrictions may also limit the areas you can choose for a new location. Contact your city’s planning and zoning division to review any restrictions that a particular area enforces that could affect your business.
- Convenience and Frequency of Foot Traffic
For most storefronts, the number of customers they receive is dependent on the foot traffic that travels through the area of the business. Especially in the beginning, your business attracts customers through word of mouth or community engagement. That is why it’s important to select a location that is visible and easily accessible. However, with these coveted locations, the purchase price or rent is going to be steep. Marketing efforts can help boost visibility and attract customers, even if your location isn't in the most prime spot.
- Close Competition
Before deciding on a location, it’s important to research how many competitors are in the area. There are pros and cons to being near a competitor, on one hand you may be able to poach some of their customers – but on the other they could do the exact same to you. Unbiasedly think about where your business would stack up at that location. For example, if you're opening a pizza shop right next to a pizza parlor that’s been a favorite of the community for over 100 years, it’s probably not a good call. If you’re opening a frozen yogurt shop in an area that already has 4 frozen yogurt shops within a 5 mile radius, it’s not the best location for you. Instead look for an area that hasn’t been tapped out by similar businesses, while at the same time, staying out of dead zones too.
- Demographic of the Area
When you’re choosing a spot to locate your business, think about the area’s demographic – who lives there? What age groups can be found frequenting that area? Are they people you would consider as viable customers? You will want to locate your business in an area that potential customers already frequent. If your target market is people ages 18-25, locating your business near a campus would be optimal. However, if you predict the majority of your clientele will be age 55-65, that same campus location would not do much for your business. Before choosing a location, ensure the area’s demographic will express interest in the product or service you offer.
Outside of aesthetics, there are many factors to consider when choosing where your business will be based. Ultimately, your location should work for you, not against you. Select the spot that will benefit your business for years to come.
If you have questions about choosing your business location, we are here to help! Together, we can find the perfect location and choose a financing strategy to grow your business.
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