11 Factors To Consider When Choosing A Business Location

business location

The location of your business is an important aspect that you should carefully consider when starting a business. Believe it or not, your business location could be the difference between your business doing well or its failure.

There are several key factors that you ought to have clear before you settle on your business location of choice.

You need to;

  • have a clear picture of what you absolutely must have,
  • what you’d like to have,
  • what you absolutely won’t have, and
  • how much you’re able and willing to pay

Getting a clear picture of the above is very important, though it may sometimes be a time-consuming and rather tedious process.

This is because the location is something you want to get right the first time because unlike many startup screw ups, that can be fixed later on as the business grows, an undesirable location choice may not be something you can fix.

So, select your location of choice both realistically and systematically.

Below are some of the very important factors you should carefully consider.

1. Operational style

Your operation could be formal, classy or just casual. Your location choice should be in harmony with the style and image of your business. For example, if you are in retail, you might want to operate from a traditional store, or maybe you’d like to try running your operations from a kiosk or booth within a mall or you could operate from a cart that you can move to different locations?

2. Demographics

When it comes to the demographics of your business, consider first who your customers are and how easily they can reach the location of your business. This is especially crucial for retailers and certain service providers. Your demographic profile for your target market should guide you in making this decision.

Secondly, consider the community around which you are setting up your business. If your customer base is mostly local, ensure that a good percentage of the population match your customer profile to support your business. Does the community have a stable economic base that will provide a healthy environment for your business or us the community dependent on a certain industry for its economic needs? If it is the latter, you might want to reconsider as a downswing could lead to a recession in the economy which could affect your business negatively.

Thirdly, consider your work force. Are there people with the particular talents and skills in that community? Is the community well equipped with the necessary resources such as affordable housing and schooling, recreational facilities, as well as satisfactory cultural and other aspects of the community?

3. Accessibility and parking

If your business needs frequent deliveries, then your location of choice needs to be easily accessible to both suppliers and small-package couriers. Customers, especially people with disabilities need to be able to access your facility with relative ease.. If you’re located on a busy street, ensure that the above groups of people can get in and out of your parking lot quickly and with ease.

Find out when you can access and use the facility you choose as your business location, if the exterior doors sometimes get locked and if so, whether you are allowed to have a set of keys so you can access your office after normal working hours or during the weekends. Also enquire about when the heating and cooling systems work. You want to make sure that the conditions will be favorable for you to work in even when you are the only one at the facility at the time.

There should be ample and convenient parking for customers and employees, and the parking space should be properly maintained and well-lit.

4. Foot traffic

For most retail businesses, foot traffic is extremely important. You don’t want to be tucked away in a corner where shoppers are likely to bypass you, and even the best retail areas have dead spots.

By contrast, if your business requires confidentiality, you may not want to be located in a high-traffic area.

Monitor the traffic outside a potential location at different times of the day and on different days of the week to make sure the volume of pedestrian traffic meets your needs.

5. Security

Your location of choice can increase your likelihood of being hit by crime. This can in turn affect your insurance premiums, not to mention you will need to take additional security measures to ensure your premises are safe.

So considering security or the chances of crime in the area of your location of choice is a key point to consider when selecting the ideal location for your business.

6. Competition

How close you are located to competing companies ultimately impacts your business, either in a positive or negative way. It is good when dealing in industries where comparison shopping is popular such as car dealerships.

If you run an entertainment joint or a restaurant, then you could benefit from the overflow from existing businesses. However, if there is too much competition, then you may need to consider a different location as this could make your marketing job harder,

7. Other businesses and services nearby

Look at the other businesses and services in your vicinity from two key view points. One, check if your business can benefit from nearby businesses either from their customer traffic or if these companies and/or their employees could become your customers.

Number two; consider how they’ll enrich the quality of your company as a place of work for your employees. This could include restaurants for your employees to go for lunch, or day-care centers that can cater to your employees with children or convenient stores and services you and your employees might need.

8. Business rates

Cash flow is a crucial part of every business. It determines how well a business does and its survival chances as well as its ability to pay its bills.

This said, it is important to research the average business rates in the area you intend to set up shop. These rates including the rent, taxes and utility bills will enlighten you so you know if doing business in this particular location is within your means.

Remember to inquire about the small hidden costs e.g deposits, janitorial services, insurance rates for the area and parking fees. Consider all these location-related expenses before you make your decision.

9. Laws

Find out if about any laws or zoning regulations that could impact your business in any way both in the location you are considering and in nearby properties as well. Starting a nursery school then having a pub start up right next to it wouldn’t be ideal for your business.

10.Image and history of the site

Check out the history of the site you are considering for business and it’s evolution process over the years. Consider what this location says about your company especially if you target the local market. Ensure your location projects the image you want it to, properly.

Do proper research about previous business owners. If you’re looking to open a dance school, find out if there have been other schools in the area previously that didn’t do well. Find out why they failed. Was it because of a handicap in the location that you may have overlooked? Was the location the problem or was it a problem with the businesses?

11.The building’s infrastructure

Ensure the necessary building where you intend to start running your operations has the infrastructure to support the high-tech needs of contemporary operations. Adequate electrical, air conditioning, and telecommunications service are things you should look for in your ideal business location.

It’s good idea to hire an independent engineer to check this out for you so you’re sure to have an objective evaluation. Also ensure that the premises you choose have the ability to accommodate potential business growth or a spike in demand because moving premises is a lot of time-consuming work. It can be quite pricey too.


When all is said and done, starting a successful business venture depends greatly with your selection of the right location for your business. I am certain that if you take the above points into consideration, you will greatly increase the rate of your business succeeding and you will be unstoppable!

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