Six factors to consider when choosing a location for your business
Despite the increasing pace of technology and digital enterprise, there will almost always be a requirement for a bricks and mortar presence, whether that’s to house your staff, store stock in a secure warehouse, or provide a physical brand presence for your customers.
There are many things to consider when choosing a location for your business venture, whether setting up an office or a shop for the first time, or looking to expand into new areas. Entrepreneur Jake Fox reveals the key factors a business needs to consider when selecting a new location.
Does your business rely on frequent deliveries? If so, it’s important to consider local transport links, particularly main roads and motorways. Property rental and purchase prices are often steeper in higher density, more commercialised areas, so there are certainly cost benefits to seeking a more out of town location, providing your daily business operations won’t be hampered by poor transport links. Equally, if you rely on high customer footfall, then ensuring your location is accessible by car, bus and even train will all be important considerations. Don’t forget your employees too, as a good location is often a critical factor in recruiting the right people into your business, particularly if they have been offered several jobs and need to evaluate the pros and cons of each.
Believe it or not, your location can increase your odds of being affected by crime, which in turn can influence your insurance premiums, as well as the additional security measures you made need to take to keep your premises safe. It’s fair to say that in business, we all make decisions based on information, intuition and probability mixed in with a little luck. But knowing the chances of crime in the areas you are considering is an important part of the decision making process. Looking at UK government crime statistics can help businesses make an informed decision about where to set up a new shop, office or warehouse. Knowing the risks of potential criminal activity can help you better prepare and take adequate precautions.
Your proximity to other competing businesses could be crucial to your success. Could they provide a benefit to your business or cause a hindrance? Establishing which competitors are in your area and their offering could help guarantee you choose the right location for your business. If there is too much competition then it may be a warning sign to expand your horizons to a new location. There are exceptions to this such as car dealerships who want to be near each other as customers compare and choose the best car deal, hence their close proximity. Likewise, if you have an element of your offering that is unique or offers some kind of new innovation, then choosing an area that already has a ripe market could be the ideal way to pick up customers very quickly and establish a presence in a new area in a relatively short time frame.
4. Business Rates
Cash is king! Cash flow is critical as it determines the viable ability for a business to survive and pay its bills. Therefore, it is important to research the average business rates including rent, utility bills and taxes in the area to ensure you can afford the premises. Simple hidden costs such as deposits and whether you need to pay to park need to be snuffed out before committing to a location. Estimating the living cost of the location will prevent a commitment outside your means.
5. Skill base in the area
Find out the skill base in the area – can it fulfill your needs? Take into account employment rates as well. If you rely on skilled workers it is best to go to where there is a healthy bank of talent. Employees are often a business’s biggest asset thus choosing a location that’s lacking in required talent may be the start of your business’s downfall. Some recruitment agencies will happily send you CVs on spec to gauge the market, only charging if you subsequently decide to interview and hire someone. Alternatively, posting a free job via an online job site will quickly show you the calibre of employees in a particular area.
6. Potential for growth
Will the premises be able to accommodate business growth or a spike in demand? Moving premises is a big upheaval and can be time consuming and costly. A decision needs to be made as to whether the premise you are choosing is a short-term location or if you would like to stay there for the long haul. Consequently, a location’s flexibility could be a very important factor regarding the premises’ suitability for your business needs.
Whilst a perfect business location is different for every business, covering these crucial areas will certainly give you the best chance of beating the odds and keeping your business on track for future success.
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