Photograph: Joseph / Flickr
The success of a business is heavily dependent on its location. It’s obvious that an ideal place needs enough traffic to ensure a steady supply of customers, as well as providing adequate access to the supply chain and workforce. However, these are just the basics, and choosing a commercial property location that fosters success in business will require you to look deeper into area laws, to ask the right questions to reduce risks and to plan carefully to avoid potential obstacles for success.
Look Carefully at Local Laws and Demographics
The demographics of the location you choose needs look past the population alone. Consider the age of the workforce and the area’s minimum wage and be sure that the area houses enough customers to ensure a healthy demand for your goods and services. Additionally, the crime rate for the area is an important factor as well.
For better or worse, local laws and zoning regulations will impact your business. Think through the local tax rates as well as other fees as well as financial incentives sponsored by local governments designed to attract businesses. Take advantage of such programs to offset costs.
Control Risk by Asking the Right Questions
Opening a business is risky by nature, but by asking the right questions you can reduce the risk of failure. For instance, you should ask whether the building supports the business’s brand image. Large, stately commercial properties may fit the needs of medical businesses but may not fit clothing stores catering to motorcycle enthusiasts.
Another important question to ask is about the possible hidden costs. Will the location need renovating to fit your business’s needs? What technology upgrades will be needed? Will you need to hire building security? Look for ways to uncover hidden costs to ensure you have budgeted adequately for the project.
One more way to control risk is to ride on the backs of your competitors. If you can find a qualified location near your biggest competitor, you get instant access to the right demographic for your business. The spillover traffic during peak business hours will give your business added exposure to the types of people you’re trying to reach with your marketing, boosting your efforts.
Planning for the Future
Don’t forget that problems can arise a year or two down the road that might be unimaginable for you right now. As such, save some funds from your budget to cover for potential unseen problems that may arise in the future. Having money in reserve can help carry your business through difficult and uncertain times.
You also need to consider the fact that success is measured by growth. As such, it’s important to have a location that gives room for the business to grow. Short-sightedness on this issue could force you to move to a new location sooner than necessary. It would be like starting the business all over again, which means doing careful research, risk management and planning once again.
Another important aspect of planning is to have effective means of measuring business success or failure. A careful look at demographics will can help you find the ideal ratio of population to your business goals, but how will you measure the actual traffic to determine if you are meeting your goals? It’s always necessary to have a set of business metrics to get an idea of the things that signal poor business performance.
Finally, be sure to seek the counsel of the right professionals. For instance, a commercial real estate attorney should be able to review the lease in order to ascertain its benefit to the business. In addition, a knowledgeable commercial real estate firm with access to an array of commercial properties can help you gain valuable insight into the area, granting you a greater selection of locations to choose from.