Choosing the best location for your new business is a decision not to be made in haste. Your first consideration for convenience and cost factors is to contemplate the possibility of running your startup company from home. With the rising number of virtual companies, it’s easier than ever to work remotely and take advantage of some home-office tax deductions at the same time. finding a location for your business requires doing your due diligence.
The commercial building you choose will have a big impact on your business. Ideally, its size, layout, location and appearance should all enhance your operations while respecting zoning and environmental regulations.
Commercial buildings come in a wide variety of shapes, locations and prices, so you have to know what your needs are and how much you can afford to pay. If you've worked on a business plan, you probably know the amount you can spend on rent or a mortgage, utilities and taxes. A cash-flow analysis will help you determine whether you can afford to purchase a commercial property or if renting is your only viable option.
When choosing your location, it is ideal to follow these required steps, at minimum:
Completing an accurate and detailed feasibility study is the first step in finding your ideal location. Is your location feasible? This study will help you determine the most opportune neighbourhood for your business and will outline both your primary and secondary target markets.
What can you truly afford? You should have the knowledge of your overall start-up budget. Are you in a financial position to build a restaurant footprint from scratch or will it be more ideal for you to take-over an existing restaurant space? Analyze your vision, concept, and the costs of renovating.
This study will also match your concept to specific demographics within a hyper-local area of your city. Needless to say, this information is vital in determining where to even begin your property search.
If you're a retailer, you probably want to make sure there's ample parking and pedestrian traffic as well as attractive decor. Situating your business close to a magnet or "anchor" store can provide you with lots of walk-by customers. If you sell high-endclothing, for example, it's probably best to avoid discount malls and instead locate your business close to other high-end retailers such as shoe stores or jewellers.
Location and decor are less important to the success of a small wholesale or manufacturing operation, but you will have to comply with zoning regulations that stipulate what types of activity are allowed where. You should also consider the availability of qualified employees within a half-hour commute of where you are considering buying.
For personal, professional or creative services, you may require a series of closed offices in pleasant surroundings with high-speed networking and easy access to public transit. The ability to attract and retain qualified employees can be critical to success of such businesses, so a building in a central, easily accessible location can give you a strategic advantage.
When considering a loading dock, for instance, ask yourself: Is it well situated? Does it require repair? Are there more than one in the facility?
When reviewing potential locations and neighbourhoods, make sure to analyze the accessibility of the location from different streets, directions, and intersections. Many municipalities have also completed traffic reports, so with a little bit of research, you can likely find the amount of vehicle traffic going by on any average day.
Do you need a location that has room to grow? In a few years, you might need to hire more employees or accommodate new inventory.
While more and more buildings are wired for high-tech needs, that isn’t always the case when you’re looking at older buildings. Plus, if your business requires a lot of electrical power for computers, printers, servers, etc., you don’t want to blow the whole building’s power source. Finally, more and more customers expect free Wi-Fi when they shop in your store or sit in your lobby before appointments, so make sure this is something you can offer.
Do you need easy access to transportation, such as trains or an airport for cargo shipping? Do you need space for large trucks to load and offload product?
Besides office space for your staff, do you need a dedicated space for a receptionist? One option is to look for office space with shared resources such as receptionists, copiers and a mailroom.
Once you know your needs, it’s a good idea to do some of your own research on locations before talking to a commercial realtor. Check with your city’s business development office and the local Chamber of Commerce to get their suggestions on where to locate for your type of business. You may find out that your city offers tax incentives to attract small businesses to certain areas. Ideally, you want to locate in an area with active support for local businesses.
Next, check online to find the demographics of different areas so you can determine whether or not the location will support your target market. Websites such as City-Data, the Census Bureau and Proximity can help you narrow down your search.
Make it a point to read the area’s local paper to get a sense of the economic climate, type of businesses opening and closing and general vibe of the area. Then, look for any marketing research reports on the area from the city’s business development office, the local SCORE office and local city colleges.
No matter how good a location looks on paper, you need to visit the different locations you’re considering in person to check out the traffic patterns and types of customers in the area. Does the location portray the image you want for your business? Is the area in need of street repair? Is there a nearby anchor store to help attract customers (or a competitor to lure them away)?
Finally, make sure you’ve figured out what monthly rent your budget will allow before you start talking to a commercial realtor. Leasing space is a large expense already, so you don’t want to be talked into more than you can afford.