The importance of a location in business is no joke. Everything else can be in order but if the location is poorly picked, there will be consequences. The location alone can affect your overall operating costs. Location can also compromise your ability to provide wholesome customer experiences. Your location can even lead to poor visibility which in turn ruins revenue prospects. Bear in mind also that it might not always be easy to just change a location. That is why you need to carefully consider the following factors when choosing a business location.
Mode Of Business Operation Is A Determinant
It would be remiss if we do not consider how operating businesses online is now a thing. In a recent article, I mentioned online retail as one of the fastest-growing industries in 2023. Thus in choosing a business location you need to consider this dynamic. There are 3 basic modes of business operations. The traditional one has always been the brick-and-mortar one. It remains widely adopted and is not going anywhere soon.
The other one is the online one which of course can be rolled out in many forms. The third one is the hybrid or blended one. This entails combining brick-and-mortar and online, sometimes bricks and clicks. How you will operate your business has a huge bearing on location considerations. It is important though to appreciate that brick and mortar is never completely out of the picture.
Accessibility
How accessible (or not) your business location has bearings on multiple elements. Accessibility has a bearing on customer inflows. Accessibility has a bearing on suppliers and other key stakeholders. Accessibility also has a bearing on customer experiences. Basically, anyone who wishes to engage your business should easily access you, physically. This means anyone driving in or walking in should not struggle to get access. This also means your location should be strategically picked. It should not be too far away. It should be within a reasonable distance of anyone who might want to access your business.
It should be sufficiently visible as well. Accessibility is also achieved by being connected to or close to major road networks. Can your staff easily access their workplace? This is with regard to where they stay and where you are situated. Understandably your choice of location may not tick all the boxes for everyone. Regardless you should endeavour to be accessible to the majority. Accessibility also spans online too. Your business should be easily accessible online. This implies that your digital footprint should be solid. Even your physical accessibility can be aided by online accessibility.
Competitor Dynamics
Your choice of business location should factor in competitors. It is not always cast in stone that you should not be located close to competitors. You always have to weigh the pros and cons. There are times when it is strategic to be located close to your competitors. Then there are times when it is detrimental to be located close to your competitors. That is why market research at the onset is crucial to draw insights. If you thoroughly conduct it, the insights you will get on competitors will guide you accordingly. Let us suppose you manage to discover how you can come up with a unique and superior value proposition.
This can enable you to be located close to competitors. That way it will be easy to lure customers. Plus there are cases where competitors are actually located in one place. For instance, you can find whole streets lined up with hardware outlets. This means prospects flock that general location. Placing yourself there will be strategic in that regard. Then there are scenarios where deliberately choosing a location away from competitors can be strategic. Evidently you can see it varies contextually so do proper market research competitors-wise.
Operating Costs Implications
The location you choose is closely tied to your operating costs. This is particularly so in relation to items such as rentals and related utility bills. It would not make sense to pick a location in a very expensive area e.g. the central business district. That would be a poor decision especially if that choice is going to hurt your cash flows. You also have to consider the possibility of having to change a business location later. This pertains to investing in building or renovating a location for the long haul.
What if a short while later you realize the location is less ideal? The fact that you would have parted with lots of money to set up at that location will ground you. In the same vein, choice of location can be influenced by whether or not substantial funds are needed from the onset. For instance, some locations may need lots of renovation or construction works first. When choosing your business location carefully consider the operating costs implications. Do not be too quick to make financial commitments to a location.
Security Considerations
The potential losses from theft or other causes can be crippling. That is why when choosing a business location you need to consider how secure it generally is. Proximity to security services e.g. security partners and police matters here. Your business location must enable rapid response where needs be.
You must also consider the general profiles of towns, streets, neighbourhoods and so on. Some are more riddled with criminal activity than others. Getting to know the profile of a prospective location helps inform on security measures you have to or can implement. Some businesses can get away with average security measures but for some businesses it is crucial. You can tick every other box but if security is compromised the losses can be huge.
There is a lot to consider when choosing a business location. However, these 5 areas that we discussed are core and fundamental. As you thoroughly navigate them you will notice several other vital areas. The thrust is to choose a business location where all the 5 major elements converge.
