Whether you’re starting a new business or moving to a new business site, location is everything. Businesses thrive when they are visible to potential customers. As crucial as location is, business owners must always weigh the costs carefully before making a decision.
Here are the top six things that you should look for in finding your next business location.
Have you ever wondered why car dealerships cluster in auto malls? It may seem counterintuitive to locate so close to the competition, but, in reality, auto dealerships all benefit from being right next door to each other.
Why? Because everyone who comes to the auto mall is shopping for a car. Customers don’t want to drive all over town looking at cars. They want to go to the auto mall and compare vehicles and deals.
Dealerships benefit from the high traffic of prospects that come to their lots for no other reason than that the dealer is located in the auto mall.
As an added benefit, dealerships benefit from the advertising of all the other dealerships. Inevitably, some of the other guy’s advertising traffic steps on the lot. Locating near competitors isn’t the right choice for everyone. Too much competition leads to market saturation. It’s important to assess a new business location’s potential.
Opening up a hamburger joint across the street from a competitor is common practice and works well in many locations. However, opening a third hamburger joint on the block may be counterproductive.
Access is everything. If customers can’t get to you, then the new business location won’t work. The questions become: Who are your customers? How far are they willing to travel and by what means?
With the customer base in mind, it’s important to consider a new business location’s proximity to the following:
- Parking spaces.
- Gas stations.
- Bus stops.
- Train stops.
Few businesses these days get by without a reliable IT system. Considerations about IT infrastructure go beyond the speed of the internet connection when considering a new business location. Proximity to off-site systems, space to house equipment and electrical capacity are important. IT infrastructure consists of many elements:
- Hardware items, such as servers and computers. Some companies also need data centers, switches, hubs and routers.
- Software might require additional equipment.
- Networks require internet connectivity, firewall and security.
- Human users, including network administrators, developers, designers and end users.
For new businesses that serve the public, visibility means everything. Even the best-run advertising campaign fails to bring people through the door of obscure locations. When your new business location is highly visible, people start to think of it as part of the community.
Consider the following visibility factors:
- Visible from major roads.
- Easily located.
- Traffic density.
- Curb appeal.
Crime hurts business. Besides the problem of stolen or damaged property, crime drives customers away and makes employees consider changing jobs. Some of the best security comes from locating in a safe area with high visibility.
There are many considerations when it comes to security, and a good property management company can help with determining what security features are uniquely important to your business. Considerations include the following:
- What is the area’s crime rate?
- How much are the insurance premiums (more expensive in high-crime areas)?
- What security systems are in place?
- Are additional security measures needed?
- How does crime affect customers?
- How does crime affect employees?
- Will the business be open at night?
- The base rent.
- Building maintenance.
- Modifications like painting, redecorating, renovating and others.
As important as location may be, a business with too much debt can’t sustain itself, even in the best of locations. All business comes down to profitability in the end. Choosing a more expensive location only makes sense if the advantage of the location exceeds the cost differential.
Location costs are an important new business location considerations. All leases are not alike. Some cover many amenities, others require the tenant to pay these costs. Important leasing considerations include the following:
Location decisions often present new business owners with their first challenging decision. Everyone wants to locate in a prime area and expand their business fast. While great locations increase revenue, the shrewd business owner must determine if the increased revenue translates to increased profits. Picking the right location requires balancing competitive advantages with expenses.
Do you need help finding that perfect location with that’s safe and affordable with just the right amount of traffic. Contact the team at LCI Realty to partner with individuals who want to see your business flourish.
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