You’ve heard it once, you’ve heard it twice, and you’re about to hear it again: location, location, location. As trite as it may seem, location really is everything. How else can you explain why one million dollars can buy you 1,000 square feet in San Francisco and over 80,000 square feet in Detroit? Location! That being said, it should come as no surprise that selecting a location for your business is important. There are a number of factors that need to be assessed when investigating where to set up shop. Below are four simple questions to ask yourself when selecting a location for your business.
1. What kind of business are you, and what location would work best for your needs?
The type of industry you are in can have a profound impact on choosing the right location for your business. Some ventures rely heavily on traveling to their clients. In these instances, the location of your business is not as important, because clients are not actively visiting your store. However, if the location of your business will be the forefront for selling your product or service, you have to make careful considerations as to what type of facility to select. Below is a brief description of the five types of business locations. Selecting the right one for your business is crucial to success.
- Home-based – Working from home is in vogue, and for obvious reasons. In addition to not having to leave the house, you don’t have to worry about paying rent or commuting. On the downside, room for physical growth is limited and accommodating employees or meeting with clients can be challenging.
- Retail – Retail space comes in a variety of shapes and sizes and can be located in enclosed malls, shopping centers, free-standing buildings, or mixed-use facilities. This type of location is most practical if you have a tangible product to sell such as clothing, toys, or gifts.
- Mobile – If you are selling a product or service to the general public or other businesses that you take to your customers, your ideal location may be mobile – a car, truck, or van.
- Commercial – Commercial spaces have even more options than retail. Commercial office buildings offer conventional office space tailored to businesses that do not require a significant amount of customer traffic for sales.
- Industrial – If your business involves manufacturing or heavy distribution, you’ll need a plant or warehouse facility. Light industrial parks typically attract smaller manufactures in non-polluting industries, while heavy industrial areas tend to be older and poorly planned but offer rail and/or water port access.
2. Who is your target audience, and where are they located?
Since customers are the crux of any business, it’s imperative that you check your customer demographics when you are scouting a potential location for your business. There are a number of online demographic reporting resources that you can utilize to break down demographics by city, state, or by specific zip codes. This is an invaluable resource because, when successfully choosing a business location, you must not only know whom you are trying to attract, but also when you are trying to attract them, where they are located, and where they are going on a day-to-day basis. For instance, if you are a breakfast restaurant, you want to make sure that you are on the side of the road that heads towards the downtown and business districts, so it’s easy for people to pull in, get breakfast, and be on their way. Whatever the nature of your business, it’s crucial that you position it in a way that will be easily accessible and practical for customers.
3. Who is your competition, and where are they located?
It may seem strange, but many experts agree that analyzing your primary competitors and their locations is one of the most valuable resources you have when trying to select a location for a business. Greg Kahn, location researcher for clients such as Arby’s, Home Depot, and Subway agrees, “Quite simply, the best place to be is as close to your biggest competitor as you can be.” The reason for this is because businesses choose their locations based on the ideal demographics of a particular area, which often directly corresponds with like-business’s ideal demographics. Additionally, many of these businesses have spent large portions of their advertising budgets trying to drive traffic towards their locations. In short, they have done most of the work for you. By piggybacking off of competitors’ research, you can save valuable time and money. Of course, it’s still a good idea to make your own evaluations about a particular area, but it’s not by sheer coincidence that gas stations and fast food restaurants are often located adjacent to one another in similar areas of town.
4. How much money do you have, and how much can you spend?
The biggest question to ask yourself is if you will be renting or buying, and do you have enough money to rent or buy in an optimum location? Without adequate money to spend, you could end up resorting to a location that is less than desirable. A common misstep, which is especially devastating for businesses that sell directly to clients, is going for the cheapest place available to keep overhead low. While this is important, smart retailers know that no amount of advertising or public relations can make up for a lousy location. Some advice: spend your money wisely, but don’t be afraid to spend a little extra on a choice location, it will pay off in spades when clients start walking through the door.
How do we do it?
At Screamer Co., our main goal is to help clients get from point A to point B. When asked to help select a business location, we pair with our research partner MindEcology to make it happen. Through detailed marketing data, we analyze customer demographic and behaviors in order to select a location. Site selection is a regimented, scientific process, but by answering these 4 simple questions, you can easily get started on finding the best possible location for your business.