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Location Is Vital for a New Business
By
5 MINUTE READ
November 16, 2014

People shopping at hat stall (Courtesy of Hetiarivony Rabetsimamanga)
Mandela Washington Fellow Hetiarivony Rabetsimamanga of Madagascar teaches young entrepreneurs marketing, which includes determining where to locate a business like this hat stall.
Credit: Hetiarivony Rabetsimamanga

Choosing a business location is one of the most important decisions a startup will make. The choice requires solid research and precise planning. Before deciding on a location, talk to building co-tenants or other business owners in the area.

Consider these location factors:

  1. Exposure: Choose a location that provides ample exposure to your customers.
  2. Image: Is the location consistent with the image you want to maintain?
  3. Competition: Are the businesses around you complementary or competing? Which areas are your competitors ignoring?
  4. Local labor market: Does the area have potential employees with the skills you need or the ability to be trained?
  5. Your plans for growth: If you anticipate the business will grow, look for a building that has the space you may need.
  6. Proximity to suppliers: They need to be able to deliver your supplies.
  7. Safety: Will customers — or employees — feel safe in the building or traveling between their homes and your business?
  8. Laws and regulations: Local authorities may have rules about what kind of business can operate in specific locations.

Consider financial variables that could affect your business:

  1. Hidden costs: Very few spaces are business-ready. Include costs like renovation, decorating, information technology system upgrades, etc.
  2. Taxes: What are the tax rates for your area? Could you pay less in taxes by locating your business in a nearby area?
  3. Wages: What is the prevailing fair wage rate in your area? You will get the best employees if you offer fair wages.
  4. Government incentives: Your business type or location can determine whether you qualify for a government business incentive program.

Always consult with a small business specialist or counselor familiar with local circumstances to help you answer any questions you may have about where to launch your business before you make any final decisions.

Interested in taking the next step with your business? Check out our #YALIEntrepreneurs page.

Adapted from material published by the U.S. Small Business Administration.

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Business Growth, Entrepreneurship