Why Is Business Location Important?
The importance of location in business success cannot be understated. The location of a business positions it not only to attract a customer base but also to attract the right sort of talent to make the business a success. A business’s location also helps it create a brand and image, since there are always parts of a city that carry a reputation, whether it is a reputation for simple living or a reputation for luxurious extravagance.
Placing your business in a part of town that reflects your brand and products can impact the success of your establishing.
Research has shown that the location of a business is one of its most important factors for success. Location has an even larger effect for microentrepreneurs, those entrepreneurs opening a small scale business employing less than nine people. The importance of the location strategy is especially important for these small businesses becuse it impacts whether enough profits will be generated to sustain the business.
Restaurants are perhaps the ideal business to point to when discussing the impact of location. Researchers investigating restaurants found that certain parts of a city will attract customers more often than others. Whether a customer returns for a follow-up visit has a lot to do with the location. Even when the quality of service is high and the food is good, restaurants tend to attract repeat visitors only if the business is located in specific high-demand parts of a city.
There are several factors to consider when choosing a business location. One of the first concerns of any business owner should be toward establishing a business that appeals to the local demographics. If the people in an area have no need for a specific kind of business, then there will be little traffic.
Conducting market research can help identify parts of a city where a business will thrive.
It’s also important to consider the location costs. The surrounding area might be high traffic, but the cost of that high traffic may come in the form of higher rent.
Business owners should find a balance between well-trafficked parts of town and the cost of the planned location. Again, researching an area in advance is the best way to identify whether it will make a suitable home for the business.
There are also other factors that come into play when choosing where to locate a business. Amenities in the surrounding area, such as available parking, may attract customers to the area. Business owners will also want to consider whether the surrounding area has a well-developed infrastructure. Without sufficient connections, it may be difficult to maintain a consistent internet connection, which may impact the efficiency with which the business conducts its operations.
When deciding where to open a new location, there are a few business location advantages and disadvantages to consider. As previously noted, identifying a well-trafficked area can be critical to getting a business off the ground.
Consistent traffic is the key to driving daily revenues and can help generate the money necessary to pay back debts, such as business loans.
On the other hand, the same high-traffic areas may be expensive to locate in. The cost of paying the building’s rent may only add further to existing debt. Business owners will often try to locate a store in a more affordable part of town as a result.
However, the disadvantage of locating in less costly parts of town may include low traffic, sometimes owing to a lack of surrounding amenities that would otherwise help attract business.