How to Choose the Best Location for your Startup Business
It doesn’t matter what type of business you are starting up – location does matters. A certain location might be perfect for one kind of business, but it could also be horrible for another. For example, a retail mall would be great for a high-end thrift store, but that would be terrible for something like a dance school or a garage.
The real challenge is finding a location that matches all your needs: business, customers and branding. Although your first thought might be the cost of the location, it should never be your ONLY thought. Here are some tips that can walk you through the most important aspects to consider when choosing a new business location based on your unique business and financial situation.
Think About Profit
Of course, you would want to make the most profit that you can from your business. Therefore, you need to keep your overhead costs as low as possible. A location’s overhead cost is more than simple rent or mortgage calculation; it’s also about your utilities, taxes, insurance, maintenance, janitorial, etc. Think about it as how much that exact location would cost to maintain each month.
It’s also for your business’ own good if you can calculate how much you’re going to spend each month. Make a list of the essential components your business needs to operate, and then base your budget on that.
For example, a flower shop needs retail space, office space, space for supplies and inventory, production area, and even customer parking. On top of that, the space should also be highly visible. You’d want to be able to change your sign or decorate your storefront to attract the attention of passing traffic. All these factors need to be taken into consideration for the overall profitability of your chosen location.
Think About Customers
Sometimes, customers want convenience, and sometimes they just want cheap. Other times they want to shop in a welcoming, well-decorated environment. Ergo, your startup business should have a mixture of all. You have to ask yourself what your potential customers would need.
For example, with a flower shop, potential customers want it to be at a convenient location, but they would also want to shop in a well-decorated store. However, others may be willing to drive a few extra miles for a cheaper flower arrangement.
Now, you have to ask yourself, “What do my potential customers value: price or location?”. You have to decide if your customers would go out of their way to purchase a cheaper product or if they would pay more to shop in a high-end location – this should be a huge consideration when you’re looking for the location for your business.
Think About Branding
To make sure that your business thrives, you would want your customers to come back for more. Keep in mind that you might never get a second chance to make a first impression, so you should have your best foot forward always. Your employees focus on customer service. Your products are premium grade. Also, your location is at a prime spot.
Of course, your physical location is one of the first things potential customers see. They can get the overall impression of the surrounding area, storefront and the overall feel of the place. Your location, regardless of where it is, contributes to the brand perception of your business.
This is now where you should keep in mind that branding matters in any business, regardless of industry. The thing about branding is that it happens whether you put a thought in it or not. Your best bet is to try to manage your brand image and create the type of brand you actually want. It’s much easier than trying to change an established brand down the road. Try to envision a brand that you want to be, do you want your products:
Cheap? Think low-price over quality.
Average? Think quality and convenience.
High-End? Think upscale, quality and reputation.
Before you decide on a location, figure out what brand image you want to project. Then choose a location that supports the brand you envision.