Choosing the Right Location for Your Business
- September 3, 2018
- Posted by: Quarles Business and Financial Strategists
- Category: Business Advice
Choosing the Right Location for Your Business
Is location important for a business?
Choosing the right location for your business is critical to your business success. Whether you are starting a new business or looking to revive a struggling business, choosing the right location will make a big difference.
Your business location is also where you are going to be spending a majority of your day, so do yourself a favour and spend your days in the right place!
Here’s what you should be looking at when choosing the right location for your business.
Consider your options and business needs
Every business works differently, even within the same industry. You need to consider what is going to suit you and how you plan to run your business.
This is much easier if you have at least a rough business plan in place, so make sure you’ve done the groundwork first.
Check out our article: The Ultimate Guide to Starting a New Business
Once you have a rough idea of what your business will look like, it’s time to thinking about the location.
- Is there a suburb or area that works best for you?
- How much space do you need, including work space, equipment and inventory?
- What do you need to make the day-to-day tasks of the business easier?
- What are your security needs? Will you be keeping valuables onsite?
Asking yourself questions such as these will begin to narrow down your search, and put you one step closer to a space that suits you, in a convenient location with all the facilities you need.
The type of business you are starting will greatly influence what you need from your location. A construction business will be very different from a medical practice or an online retail store. Your business location is not a one-size-fits-all situation, so try and be specific to your industry and business structure.
If you are unsure what your business needs, come and talk to one of our experienced business advisors.
Once you have a rough idea of what you need, it’s time to start considering other factors.
So, what are the factors that affect the location of a business?
How do you choose the right business location for you?
Do your own market research
When starting a business, you should do your research and learn everything about the market. Not only will this help you greatly in business, but it will increase your chances of choosing the right location for your business.
Look at where your competitors and your target market are situated. If consumers/clients will be visiting you in person, then choosing the right business location could be vital. Some businesses may benefit from being close to their competitors, such as in a shopping centre or food court, while others will find greater success in establishing their own space.
The more you know about your target market and their purchasing habits, the better. While the location of your business isn’t everything, the right choice could be the difference between a successful business and a struggling business.
Visit your preferred location
A location may look good on paper, but you need to see it in person to get the full picture. By going down and assessing the premises yourself, you can properly judge whether the location fulfils your needs.
Needs like enough local traffic walking by, ease of accessibility for customers and adequate parking space.
After spending all this time figuring out your business needs and how to reach your target market, it is important not to take a costly shortcut on the final hurdle.
Even if an advertisement describes something as a “prime location”, it is much safer to make your own judgement. It also means you can have a look at the conditions yourself and start to think about how you can make use of the space.
If you find a business location that you like, it’s time to get down into the nitty gritty of the finances!
Buying vs leasing your business premises
You will likely face the issue of buying vs leasing business premises. Both are worth considering, especially if the place feels right.
Reasons to buy your business premises:
- You can borrow against the property to grow your business
- You receive the benefits of capital growth
- You have security of tenure
- You have control over how the property is developed
- You can claim on the depreciation of fixtures and fittings, as well as potentially the building construction costs
- You can use the asset as part of your superannuation scheme
- Potential capital gains SME discounts over and above the 50% general discount
Reasons to lease your business premises:
- The set-up costs are usually lower
- You don’t face the risks of borrowing money, such as changes in interest rates and putting up an asset as a guarantee
- You don’t take full responsibility for expenses such as repairs
- You don’t need to worry about selling the property if you move
Leasing your business premises is a safer option, but lacks some of the key benefits of buying it yourself. It depends on your unique situation.
Whichever option you end up going with, make sure you are getting a good deal. Try comparing a few different prices, and don’t stretch yourself too far. Managing your business finances is hard enough without paying too much for the premises.
These are our 4 tips for choosing the right location for your business.
Unfortunately, not much about starting up a business is simple, and choosing the right business location is no different. These tips will help you get started, and give you a better chance of ending up in the right place.
Once you’ve found the right location for your business, it’s time to start setting up the premises and getting ready to open the doors.