In real estate, the old adage is that location is EVERYTHING! And for the most part, that’s true in the business world too. If you want customers, go where they live. You must check out and research multiple components of the decision of where to locate.
- What are the demographics? Lots of companies provide information on the average income, the cost of homes, how many families are close by, what types of businesses there are and a host of other items. If you know who your average customer is, then knowing the demographics of an area is a huge help. You wouldn’t want to build a fast food restaurant in an industrial or downtown area where you only have lunch business unless your business model supports that!
- What are the zoning laws? If your business requires a certain kind of signage, such as neon signs in the windows, and the zoning won’t allow it, you need to walk away. It is almost impossible to fight city hall if you are a small business owner and you may incur fines if you go against the laws.
- What is your visibility and access from the roads? You may think that anyone will be able to find you, but you will be surprised at the number of customers who can stand staring at your building and still say they don’t know where you are. Make sure that there are no trees in the way or that you are allowed to trim them. They may not be on your property. You should be able to enter the property easily from any direction and don’t forget to figure out access for delivery trucks.
- What’s the cost per square foot? Most businesses have a standard that they need for the business to be profitable. Don’t let stars get in your eyes when you see a shiny, new shopping center if the numbers just aren’t there. Having to make unrealistic sales expectations to pay the rent is not a good idea.
- Where is your competition? It’s actually a good idea to have competition build in the area before you. That means it is less likely they will build right next to you, although it can happen. Can you get protection from the landlord to deny any direct competition from being near you? They may only let you choose 3 competitors that they will keep out and you may have a lot more than that.
The main point here is to do your research. Don’t get caught in a long term lease (or owning a location) that will make your challenges more difficult. If possible, park nearby and count the number of cars entering the area or go to a nearby competitor and see who is buying their product. Use common sense and don’t think you can beat the odds just because you’re excited to be an entrepreneur. Do your due diligence, be patient and make sure everything clicks for you when choosing your location.