A good business location means good business and high profits. A business owner should aim at finding his required customers and most times competitors lead us where our customers are. Doing research will help you also get a suitable lease.
It’s time to put location at the top of your to-do list. If you’re preparing to open a food or retail business with a storefront, putting your business in the proper location might be the single most important thing you do at startup. Of course you need a winning product, too, but how will anyone know about that product unless you get them through the door?
Check Your Demographics
Making these determinations can be as simple or as complex as you make it. There are, for instance, sophisticated location analysis tools available that include traffic pattern information, demographic and lifestyle data, and competitive analyses. Adds Dickey: “For a price, a retailer can ask such questions as, ‘If I’m looking to add a store to a particular market, what’s the optimum level of traffic as it relates to the specific targeted trade area? What is the overall type of traffic? Once consumers are in the store, is there any way to measure the traffic patterns in the store?'”
In addition, you should look at neighborhood traffic generators, such as other retailers that draw people to the area, industrial or office parks, schools, colleges and hospital complexes. You’ll also want to look at both highway and foot traffic. Carlos Silva, co-founder of Memphis Championship Barbecue in Las Vegas, learned all about finding a good location when he and his three co-founders (Dick Hart, Mike Mills and Dan Volland) opened their first restaurant in 1994. “We opened our first business in the middle of nowhere, and we had to work to get people to go to it,” says Silva.
Look Your Competitors in the Eye
Many experts agree, though, that the answer to where you should locate is more straightforward than many entrepreneurs make it. “Quite simply, the best place to be is as close to your biggest competitor as you can be,” says Greg Kahn, founder and CEO of Kahn Research Group in Huntersville, North Carolina, and a behavioral research veteran who’s done location research for Arby’s, Buffets Inc., Home Depot, Subway and other major and minor players. “Foot traffic is obviously important, but landing the ‘perfect’ customer is far more crucial. By being in close proximity to your competitors, you can benefit from their marketing efforts.”
In other words, your competitors chose their locations based on the ideal demographics of a particular area, says Kahn. In many cases, they’ve also devoted large portions of their advertising budget toward driving traffic to their locations. “Why spend the money when they’ve already [spent it] for you?” asks Kahn. “It’s that easy.”
Do You Need Professional Help?
But your job isn’t done even when you think you’ve found a good spot for your business. Negotiating a lease that works for you and your business is just as important as the location itself. “It’s very important that you have a good lawyer who can negotiate your lease-that’s another cost,” says Tartt. Your attorney can help you look at things like the term of the lease, buildout allowance and the condition of the property.
He or she can also help you talk to the landlord so you ask the right questions. “Interview the landlord as hard as you look for the location,” cautions Tartt. “You’re marrying your landlord. There are a lot of unscrupulous [ones] out there-they tend to have a ‘me’ mentality.”
Sourced from: https://www.entrepreneur.com/article/73784
For a good business location find a location that will also help cut down costs. Confirm that all factors of production in a certain area are favorable enough to meet your requirements and also reduce unnecessary competition.
The first course of action to finding a location for your business is to determine your business’ needs. Will you rely on foot traffic? Does your business require natural or local resources? What kinds of zoning restrictions might you encounter? The best location is one that minimizes costs while maximizing income. Some businesses are “footloose” in that they could set up pretty much anywhere.
Push And Pull Factors
Factors that draw a business away from a certain location are “push” factors. These include increasing costs, more competition, a reduction in demand or poor communication and transportation systems. Conversely, those that “pull” a business toward a location are lower labor costs, a growing consumer base, government incentives, improved transportation and communication systems.
Customers And Community
When you rely on customers to visit your business, consider the demographics of your potential location. A business appealing to young families would not do well in a location where the average householder is older than 50. A day care facility would need to be located near where young dual-income families live, or where young parents work, so that dropping off and picking up are not out of the way. Check the United State Census information for your proposed locations.
When your business relies on the local community for support, you’ll need to check out the competition. In some cases, being near several similar businesses is an advantage because it draws a consumer group to that area. So, if you are retailing teen fashions, being near to other similar stores could be helpful. The same is true of fast food or quick restaurants, and gas stations. However, if you need the bulk of the market share, such as a grocery or after school program, you’ll want to choose a location where you are the primary servicer of that market segment.
Area And Success
Choosing the actual business area contributes to the bottom line. Consider traffic patterns and accessibility for both customers and employees. Consider too that even if a location does not have specific zoning, there may be covenants and deed restrictions on the location you choose. “Bloomberg Businessweek” writer, Peter Coy, points out that while Houston, Texas, for instance, has no formal zoning code “the separation of land uses is impelled by economic forces rather than mandatory zoning … Developers employ widespread private covenants and deed restrictions, which serve a comparable role as zoning.”