Tips for Choosing a Business Location

The ideal location of your business depends on the kind of business you're running. Before you begin scouting a location, consider some factors that can help you select the right location for your business.

Determine Your Business Activity

Do your customers come to you, or do you go to your customers? Do you have employees? Do you manufacture products for distribution?

Answers to these questions can quickly narrow down your location choices.

If your type of business depends heavily on pedestrian or drive-by traffic, such as a florist, gift shop, or clothing boutique, you'll want to seek out popular retail locations, such as a downtown area or a mall, where there are few restrictions on signage that can help attract passing customers.

If customers typically seek out your type of business, such as a child care service, beauty salon, or fitness center, you'll want to seek out a space that easily accessible from population centers, major roads and public transportation.

If your customers do not typically come to you, other location factors may be more important than physical proximity to your customers. For example, if you conduct much of your business online, establishing a home-based business might be more desirable and economical than leasing commercial office space. If you are manufacture products for distribution, an ideal location might be an industrial park near major transportation ports.

Ease of Access

If your business is a customer destination, consider how people get around in the area where your business will be located. For example, if you are scouting out a location in a suburban area, most people may get around by car. You'll need to make sure you close to major streets, and have plenty of parking. If you are scouting a location in an urban area, consider areas around public transportation hubs or areas of the city where there is a lot of foot traffic.

Proximity to Your Competitors

While it may seem counter-intuitive, operating a business close to your competitors is often very beneficial. This is especially true if you have a retail business that relies heavily on foot traffic. Shopping malls are a good example of why proximity to your competitors is an important factor. Most major pedestrian malls are chocked full clothing shops, and cost of retail space is often very high. The reason for this is that the number of potential customers increases exponentially on a per-store basis around a concentration of similar businesses. For example, while one store might attract 50 customers, two stories might attract 200 customers, and three stories might attract 1,000 customers.

Zoning and Signage

Before setting up shop, check with you local zoning authority to make sure you will not break any city ordinance or zoning policy in your preferred location. Also, consider you signage requirements, and compare them to signage regulations set by your local government. Many communities set restrictions on the size and appearance of signs.

You can find out how property is zoned by contacting your local planning agency; or use the state and local search engine to find if your city or county has zoning ordinances online.

Home Based Business

Home based businesses make up roughly half of all U.S. businesses. Convenience and low start-up costs are just few of the reasons that make a home office an attractive business location. However, running a home based business isn't for everyone. Because most residential areas are not zoned for commercial businesses, your local government may have tight restrictions on the types of businesses permitted to operate out of a home. Check with your local zoning authority for rules that apply to you. If you plan to hire employees and have customers come to you, a home based business is probably not the best business location for you.

Read more about Zoning Laws for Home Based Businesses