Getting a business location isn’t just about setting up. It is about making a good overall strategy; one that impacts revenue, customer experience, and expenses. The choice of location is so critical that it could influence employees’ productivity and wellness too. 

This is because commuting to the location would not be long and exhausting (as it is in many cases) and, in addition, the environment will promote comfort and high-spiritedness. Who wouldn’t love that? 

What is a Business Location? This is the physical and geographical area where a business office or outlet is situated. 

Brief on Business Location Strategy

Business location strategy refers to a well-planned approach to identifying and acquiring highly beneficial piece(s) of real estate for the development of business property. This plan takes into consideration the type of property that will be developed - for example, an office, a warehouse, or a workspace shed. 

Secondly, it looks into the specifics of the geographical area, breaking it into country, state/province, city, community, and neighborhood. These different locations are further investigated for their benefits and potential for the business. The tax, cost of living, and other governing laws are also considered. 

Lastly, the business location strategy evaluates how setting up a business in a specific location will impact service delivery, customer convenience, and more. 

How to Choose A Business Location 

Here are nine things you want to clear off the table before choosing a business location.   

Laws and Regulations

The laws and regulations governing a particular location are the first things you want to consider. The reason? They determine whether you’re allowed to build the business in the first place. Laws may also dictate high taxes, create unfavorable business conditions, and impose severe penalties for any infringements, increasing the risks entrepreneurs face and stifling a business’ growth potential. Moreover, laws do not only impact your business. Racial laws may restrict your participation in business activities or limit you from reaching one or more roles/levels within the organizational hierarchy. 

Proximity to Market

Transportation and logistics often account for a significant amount of business expenses. This happens when a business manufactures its product away from a physical market and has to move it all the way there. To cut down on such expenses and avoid creating an inconvenience to customers, founders have to ensure their business is located close to a market. 

Sticking to a commercial area does not only cut down expenses. It also helps create awareness - as people patronizing nearby businesses will see the new business. Awareness then increases the volume of customer interaction that the business experiences. This goes on to raise their chances of making sales and generating revenue.  

Rent Costs 

After you’ve chosen the areas where you could have your business located, the next step is to consider the cost of rent. Rent comparison is so important as it helps you determine what you can afford to pay in the long term. Ideally, experts suggest that rent costs should be within 10% of a business’s revenue. For example, businesses that generate USD 20,000 per annum should be paying just around USD 2,000 in rent. 

Renting often turns out to be one of the highest expenditures incurred by a business. Being so, owners should seek the best deals they can find, minimizing their expenses while looking out for benefits such as parking spaces and utilities.  

Security

Providing security for your business is undebatable. It shouldn’t be. Not after you’ve invested all that you have to build the business and keep the lights on. One of the easiest ways to establish some form of security is by choosing a location that is just right. A good place will be within a predominantly safe community near other secure businesses.

You can even go a step further to purchase and install security equipment such as CCTV cameras, electric fence wires, alarm systems, and such, beefing up the security of your business property. While the extent of security you provide is totally up to you, you should remember that certain businesses naturally require more security than others. 

Take a jewelry store for example. These stores are prone to criminal attacks since it is believed that - large or small - the business makes lots of money. Owners of such high-value businesses must be keen on picking locations that provide inherent safety to their business. 

Talent Pool

Attracting and retaining talents from a faraway location could cost thousands or millions in expenses. This is why businesses ought to choose locations that are close to their talent pools - an area where a large group of potential, unemployed, or interested talents reside. 

Most often, talent pools exist within urban centers and economic hotspots. Identifying these locations and setting up your business nearby is critical to easing hiring processes. More importantly, access to a pool of talents provides leverage for a business to negotiate lower employee rates or, at least, spend less on certain allowances. 

Competition

Business competition is a real thing and founders could steer clear of it by opening offices away from similar businesses. But does it pay to be out and apart? The answer is ‘not always.’ New businesses stand a chance to benefit from being in the company of other similar businesses. Think about it this way. 

The availability of many same-kind businesses in one area (like in the case of a shopping complex) attracts a crowd of customers. When one business fails to meet a customer’s needs, these people easily turn to the next business to fulfill their desires. 

Such settings create a high sales potential for all and sundry, especially because customers enjoy having multiple choices when making a purchase. 

Growth Potential 

Choosing a business location should get you thinking about how much growth you expect to see. What you should then ask yourself is “Will your current location offer enough room for the possible expansion of your physical structure or work area?” 

Your answer to this will indicate whether or not your location supports the growth potential of your business. If it doesn’t, you might as well choose a different location or prepare to move out when the business begins growing. 

Accessibility

Accessibility here would take into consideration how long it takes customers to reach your business location, and how smooth or easy that trip goes. Imagine that your favorite shopping mall had only one branch located at the far end of town. How would you feel about that? Of course, you would be disappointed. Now imagine that the single road leading to that mall is bumpy and rough or gets flooded often. 

This would likely be the straw that breaks the camel’s back. Whether you own a car or not, going all the way there and back, and having to wriggle your way through the traffic and inconvenience would be aggravating. This simple illustration projects the need for businesses to use locations that offer accessibility. 

Operational Needs

An electronic store could include a section for the repair of damaged appliances while a restaurant might include takeouts to its services. Understanding the operational needs of your business is useful when choosing its location and office space. 

Conclusion 

Location helps increase revenue potential, lower expenses, and raise market impact. What is not so obvious, however, is that it plays a role in strengthening brand value and building a favorable public perception. Here’s how that works. 

The careful selection of a location fosters business efficiency. When outlets are situated near each other, exchanging information and collaborating on tasks become seamless, enabling the business to resolve customer issues, improve its processes, or develop products.

The efficiency demonstrated in these operational processes and service delivery significantly influences a customer’s perception of the brand. 

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