Before you start
shopping for business space, you need to have a clear picture of what you must
have, what you’d like to have, what you absolutely won’t tolerate and how much
you’re able to pay. Developing that picture can be a time-consuming process
that's both exciting and tedious, but it’s essential you give it the attention
it deserves. While many startup mistakes can be corrected later on, a poor
choice of location is sometimes impossible to repair.
1. Style of operation.
Is your operation going
to be formal and elegant? Or kicked-back and casual? Your location should be
consistent with your particular style and image. If your business is retailing,
do you want a traditional store, or would you like to try operating from a kiosk
(or booth) in a mall or a cart that you can move to various locations?
2. Demographics.
There are two important
angles to the issue of demographics. First, consider who your customers are and
how important their proximity to your location is. For a retailer and some
service providers, this is critical; for other types of businesses, it might
not be as important. The demographic profile you have of your target market
will help you make this decision.
Then take a look at the
community. If your customer base is local, does a sufficient percentage of that
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? Be cautious when considering communities that are largely
dependent on a particular industry for their economy; a downturn could be bad
for business.
Now think about your
work force. What skills do you need, and are people with those talents
available? Does the community have the resources to serve their needs? Is there
sufficient housing in the appropriate price range? Will your employees find the
schools, recreational opportunities, culture, and other aspects of the
community satisfactory?
3. 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.
4. Accessibility and
parking.
Consider how accessible
the facility will be for everyone who'll be using it—customers, employees, and
suppliers. If you’re on a busy street, how easy is it for cars to get in and
out of your parking lot? Is the facility accessible to people with
disabilities? What sort of deliveries are you likely to receive, and will your
suppliers be able to easily and efficiently get materials to your business?
Small-package couriers need to get in and out quickly; trucking companies need
adequate roads and loading docks if you’re going to be receiving freight on
pallets.
Find out about the days
and hours of service and access to locations you’re considering. Are the
heating and cooling systems left on or turned off at night and on weekends? If
you’re inside an office building, are there periods when exterior doors are
locked and, if so, can you have keys? A beautiful office building at a great
price is a lousy deal if you plan to work weekends but the building is closed
on weekends—or they allow you access, but the air conditioning and heat are turned
off so you roast in the summer and freeze in the winter.
Be sure there’s ample
convenient parking for both customers and employees. As with foot traffic, take
the time to monitor the facility at various times and days to see how the
demand for parking fluctuates. Also make sure the parking lot is
well-maintained and adequately lighted.
5. Competition.
Are competing companies
located nearby? Sometimes that’s good, such as in industries where comparison
shopping is popular. You may also catch the overflow from existing businesses,
particularly if you’re located in a restaurant and entertainment area. But if a
nearby competitor is only going to make your marketing job tougher, look
elsewhere.
6. Proximity to other
businesses and services.
Take a look at what
other businesses and services are in the vicinity from two key perspectives.
First, see if you can benefit from nearby businesses—by the customer traffic
they generate—because those companies and their employees could become your
customers, or because it may be convenient and efficient for you to be their
customer.
Second, look at how
they'll enrich the quality of your company as a workplace. Does the vicinity
have an adequate selection of restaurants so your employees have places to go
for lunch? Is there a nearby day-care center for employees with children? Are
other shops and services you and your employees might want conveniently
located?
7. Image and history of
the site.
What does this address
say about your company? Particularly if you’re targeting a local market, be
sure your location accurately reflects the image you want to project. It’s also
a good idea to check out the history of the site. Consider how it's evolved
over the years.
Ask about previous
tenants. If you’re opening a restaurant where five restaurants have failed, you
may be starting off with an insurmountable handicap—either because there’s
something wrong with the location or because the public will assume your
business will go the way of the previous tenants. If several types of businesses
have been there and failed, do some research to find out why—you need to
confirm whether the problem was with the businesses or the location. That
previous occupants have been wildly successful is certainly a good sign, but
temper that with information on what type of businesses they were compared to
yours.
8. Ordinances.
Find out if any
ordinances or zoning restrictions could affect your business in any way. Check
for the specific location you’re considering as well as neighboring
properties—you probably don’t want a liquor store opening up next to your
day-care center.
9. The building’s
infrastructure.
Many older buildings
don't have the necessary infrastructure to support the high-tech needs of
contemporary operations. Make sure the building has adequate electrical, air
conditioning, and telecommunications service to meet your present and future
needs. It's a good idea to hire an independent engineer to check this out for
you so you're sure to have an objective evaluation.
10. Utilities and other
costs.
Rent composes the major
portion of your ongoing facilities expense, but consider extras such as
utilities—they’re included in some leases but not in others. If they’re not
included, ask the utility company for a summary of the previous year’s usage and
billing for the site. Also find out what kind of security deposits the various
utility providers require so you can develop an accurate move-in budget;
however, you may not need a deposit if you have an established payment record
with the company.
If you have to provide
your own janitorial service, what will it cost? What are insurance rates for
the area? Do you have to pay extra for parking? Consider all your
location-related expenses, and factor them into your decision.
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