Most people regard finance as the most important factor involved in setting up a new business. And it’s understandable that they would take that view. Give me that start-up capital, and I’ll make something fantastically successful out of it. This mirrors popular thought. But only a surprisingly small number of intending entrepreneurs take the decision about where to locate their businesses as seriously as they should. The result is that despite the availability of other resources needed to kick things off on the business turf, many of these new firms soon wilt under the scorching consequences of being unsuitably located. Customers are hard to come by, business costs eat voraciously into pockets which grow leaner all the time and the sickly state of the whole enterprise is mirrored even by solemn-faced workers and employers.
Deciding the location for a new business may prove to be a challenging task, but if a cost-effective, brand-boosting and profit-maximizing decision is made, the cost will be worth it and much more. The business type and target market are general determinants; needs, finance and the business-friendliness of any potential location are also things to consider. In making clear and definite decisions. The following evaluating factors should be borne in mind:
- Demographics: Who are your (potential) customers, and how proximate are they to your business location? What is the proportion of the local population whose characteristics correspond to the profile of the sort of customer the business targets? Can your business access and recruit the workforce it needs from the population?
- Accessibility: Is the location easy to find? Is it on, or accessible from a well-known, frequently used route?
- Infrastructure: Is power supply regular, or infrequent and erratic? How much will it cost to use alternative power sources in view of the likely time span of power outages? Are the roads around there in good condition?
- Traffic and Frequency of Human Movement: Retail businesses are preferably located in high-traffic areas, with a large number of people going through or walking along the location’s main route. However, companies which deal in more confidential business will do well to set up in areas away from the intense bustle.
- Proximity to Suppliers and Other Businesses and Services: Are your suppliers able to physically reach you in a relatively short time and at little cost? Are there businesses which may benefit yours located close by e.g. restaurants for workers to have lunch during work break? Are there businesses present, from which you could derive new customers?
- Formation of, and Impact upon Brand Image: What impression does the address make on people’s perception of the company and its brand?
- Competition: Although it might be a good idea to locate one’s business close to firms engaged in similar activity (this usually aids accessibility, as is the case with banks and textile shops), siting a new business not too far away from a much larger and more powerful, and already established potential rival may prove disastrous.
- Rent and Other Costs: Is the location affordable? Is transportation costly?
- Safety: Is it safe? What, if any, are the security concerns associated with the location?
- Personal tastes and industry specific needs apply too. After all, it’s up to you to decide.