If you are thinking of starting a business that benefits from walk-in foot traffic, you have to pay attention to the location you choose. Whether it is a retail store, a motel, a restaurant or a spa, the right or wrong location of the business can decide its fate. Yes, some businesses reach the heights of their success at the oddest locations possible, but it is not very wise to keep exceptional cases in mind while starting a business. So, what role does a location play in the success of a business? Here are some important points for your understanding.
The Foot Traffic Matters
Now, the area you choose must have ample foot traffic for you to take advantage of. Of course, you are a business that benefits from the foot traffic, so you need a lot of it. For this purpose, you first have to look for commercial areas where people normally go for shopping. If there is no place available in the commercial area, you want to explore further to look for locations from where a lot of people pass. Think about your marketing as well. If you are going to use billboards, neon signs or vinyl for marketing purposes, you want them in places where people can see them. The more people there are at the location of your business the more they will notice your marketing signs.
There aren’t a lot of people at the location that you are considering for your business, you are already at a disadvantage. It shows that people don’t naturally walk in that direction when they are looking to do business. It is the same way on the internet. You bid for keywords that have the highest number of searches. You want to put your banner ads on websites that have a lot of traffic. In short, foot traffic matters.
The Buying Power of the Community
Before you choose the location, you must know the type of audience your business attracts. Are you a fine dining restaurant? Will you be selling low-cost meat burgers? You have to decide your location based on the type of business. If you are opening a fine dining restaurant, you want to open it at someplace where people have the buying power to afford expensive foods. It requires a lot of research for you to be able to find such locations, but the time you spend researching will always pay off in terms of a good return on investment.
Businesses in Proximity
A lot of businesses try to avoid having their competitors located close to them. But believe it or not, it is extremely beneficial for small businesses to be located near other big businesses. By doing this, your business benefits from the traffic of other businesses. It solves a lot of problems that can be detrimental to businesses at locations where there are no other businesses. The first benefit is that you already have foot traffic, so you can already move on to the next step of pulling those potential customers into your premises. Secondly, you don’t have to force people to walk away from their daily routes to come and do business with you.
If you already have a lot of similar businesses located around you, people already come there for that type of business. So, if you are opening a boutique in an area where there are many boutiques already, you can rest assured that people already come to this market for buying clothes.
The Expenses of Operation
This item has to be on your checklist of choosing the right location for your business, otherwise, you are going to regret your decision. Sometimes, you find a place that has high foot traffic volume and lots of other similar businesses in the vicinity, but the operating expenses are through the roof. The businesses that have already established might have adjusted according to those expenses, but things will not be the same for a starting business like yours. You want to keep your operating costs as low as possible. What if the area you are going to has private companies providing electricity?
What if the availability of clean water is a challenge at your desired location? What is the rent of the building if you are considering renting a place for the business? A starting business already has very thin profit margins. Add high operating costs to the equation and even those little profits will be gone.
The History of the Location
The location you have chosen has proven to be ominous for many businesses in the past, you have to dig deeper even if everything sounds right. When a lot of businesses have opened and closed at the same location, it is an indication of something wrong but not visible with a casual survey. You will have to be very careful in finalizing such a location. If nothing, it could be the owner of that building that might be an issue for its renters.
Some landlords are overly interested in their profits and do not care how much damage they are doing to a starting business with their demands.
Many small businesses need some favors and flexibilities from their landlords for them to be in a stable position. Some building owners will even lower your rent to allow you to establish first. If the landlord’s reputation is okay, check to see that the place is not a frequent picnic point for robbers.
Many of the things mentioned above might sound basic or understood to you, but you will be surprised to know that many new businesses shut down because they fail to realize the importance of these same points. Believe it or not, you cannot take any of the points given above for granted. And while they might sound very understood and intuitive, lack of time and capital can often push you in a direction that you don’t want to go in. Stay tenacious to this checklist because a compromise at this point will give birth to several compromises in the months to come.
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