How to choose a good location for a business
If you’re starting or running a brick-and-mortar business, then the adage “location, location, location” should be your mantra. Your location will affect your clientele, employees and suppliers, so choosing the right spot is an important step toward business success.
Factors to consider in choosing your business location
Choosing a good location depends on a variety of factors, including the business type, your clientele, city limitations and more.
What type of business do you own?
The type of business you own will affect everything from cost to available real estate options. While it’s easy to be swayed by an impressive space, developing a list of non-negotiables can ensure the location will serve your actual business needs as well.
Make sure that the space you pick complements your business. Look for a well-kept building located in an area that supports your operations and adds to your brand’s appeal.1
Your business should also be convenient and accessible to your main clientele, your employees and any suppliers who need to access your space.
Convenience and accessibility
With so many factors at play, there’s no one-size-fits-all location. For example, a retail business may scout for a place with steady foot traffic where customers are more likely to pop in as they pass by. However, a manufacturer or warehouse might prioritize easier access to the highway for material deliveries and shipments. If you’re looking for an office building, pay attention to where your employees live so you can find shorter commutes.
Additionally, the businesses around you can play a big role in your success. Choosing a space with complementary businesses nearby can create efficiencies and drive more business.1
For example, a pet supply store could consider a location close to a vet or dog park. Or a fabricator might choose a warehouse park that’s already set up to allow for large trucks and delivery bays.
When making convenience and accessibility decisions, remember to prioritize accessibility in accordance with the Americans with Disabilities Act.
Your brand and clientele
While you can control the experience your customers have within your space, you cannot always choose what goes on outside it. That’s why it’s important to pick a location that aligns with your brand and the clientele you want to attract.2 Their first impression of your business could be the street they drive down to get there. Does it give a positive impression? Does it make them more excited about your business or otherwise reinforce your brand image?
For example, a hair salon serving an upscale clientele might look to locate in an area with boutique shops that cater to the same consumer.
Factors that can impact the cost of relocating your business
Because acquiring a new location comes with many costs beyond the initial investment, budget can be one of the biggest barriers to finding the space you want.
Choosing a business location within your budget
When budgeting for your location, be sure to account for more than just the monthly rent or mortgage payment. Utility costs, renovation permits, tax rates and other hidden costs can drive your overall cost up unexpectedly.4 Thoroughly research these costs beforehand to get ahead of any surprises later.
You may find that you’re torn between location and cost. The more desired an area is, the higher its cost. You will need to decide if your budget can support that investment, or if you should seek an alternate location that will still support your success.
Government incentives for small business
Local, state and federal government entities all offer different forms of incentives and tax credits that can decrease costs for small businesses.3 Contact your local government and the Small Business Administration to see if your business type or chosen location can qualify for any incentives.
State and local taxes for small businesses
If you have some flexibility in the city or state you can choose for your location, looking into the taxes of each area can help make the decision easier. Income taxes and sales taxes can vary even by municipality. In addition, different areas will have different types of taxes for rentals versus fully owned properties.5
What should you do after you relocate your small business?
The to-dos don’t stop at signing the lease. Everything from marketing to insurance can help safeguard your business’s future.
Marketing your new small business location
Be sure to update your online presence with your new address. Send an email announcement to your contact list and celebrate the new location’s opening on social media. You may even consider an open house event to invite people into the new space. Leverage your available channels to market your business and your new location.
Protect your business
The right insurance will let you run your business with confidence. Nationwide’s coverage is built to give small businesses the resources and peace of mind they need to succeed.