Chapter 7 - Location Location Location - Where to Establish your New Business

To date we have established that you have a business idea and decided to pursue it after you have analysed the market and identified your target audience. We have also narrowed down a price point, drafted your business plan and decided upon a business name. I hope you are feeling really proud of your progress so far?

Continuing the task of starting your own business today, we look at the importance of finding the right location for it. It could be that you are embarking on an internet business and you might assume that location does not affect you, its not to the same extent but location does matter to you too.

Why is your business location Important

Being in close proximity to clients/customers is important in order to tap into their custom, sometimes it is good to have a business where there are no competitors in the vicinity and so you create a monopoly in that particular area.

However, if you want better footfall, you should identify where your customers are at the time you are open. For example, a tourist area with lots of restaurants, if you are not in the same vicinity its going to be difficult to attract your customers away from that area, so your business will most likely not thrive.

So if setting up your business in an area like this is too expensive, you need to consider how you are going to entice your customers away. This is where customer service comes in, as if you can develop a service that is superior to that of others, for a competitive cost, your business will likely thrive.

Distribution and or transport costs will come into play wherever you decide to locate your business. You need to be able to get your goods to the customer so having a great distribution network available to you will help with the distribution of your goods, it will more than likely be less expensive if your location is not in a remote location.

Your market research may have informed you that your target audience for your goods and services might be more attractive to people in a certain area and this has been confirmed by the demographics of the area. So this would be a good basis on which to make your decision. Continuing the theme of informed (data-driven) decision making.

If you are needing access to the labour market or specialist professions and trades, finding a location where these resources are available to you is of upmost importance. It will be unlikely your business will thrive if your business needs a project manager, for example, in a house building or a planner in a wedding business, and there are none available to you in the proximity.

Taxation comes into choosing the location too. Local, regional and national taxes will impact on your cashflow so you need to do some research into the applicable taxes for your business. Im speaking of VAT thresholds, local business rates and national income tax thresholds and percentages. Whilst paying taxes is a necessary evil to many, paying taxes does actually feed the continued investment into the local, regional and national areas.

The cost of buying materials/purchases locally will also impact on your choice of location. If your materials are expensive to buy locally, or if they can only be acquired from afar and you need the transport to ship them to you, this will impact on your profitability. Research your suppliers before you choose your location.

All of the above will impact on your choice of business location. and will need to be considered in developing a Business location strategy that works for you. So research your local area, consider the cost of operating in that area.

In conclusion, we have established that location is important for your business because it can determine how it functions and this can potentially determine its success. The location also influences many decisions that you might need to make as a business owner.

More Chapters in this series

Chapter 1   - A Business Idea - Lets Make it Happen

Chapter 2  - Target Your Market

Chapter 3   - Land Your Brand

Chapter 4   - The Price is Right

Chapter 5   - Lets Get Down to Business

Chapter 6   - Its All in the Name

Chapter 7   - Location Location Location

Chapter 8 - Financing your New Business

Chapter 9 - Recruitment

Chapter 10 - Law and Taxes: Play it Smart, Stay Sharp

Chapter 11 - Kick off Your Business with a Bang

Chapter 12 - Financial Review for your Small Business

Look out for the next chapter.

the Lead Coach is available to further help you - just get in touch via the website contact form.