Factors You Should Consider When Choosing A Small Business Location.

The following are the factors you should consider when choosing a small business location:

  • Research The Area
  • Population
  • Security
  • Visibility
  • Availability Of Labor
  • Basic Infrastructure
  • Government Policies
  • Environment Issues-Waste Disposals
  • Communication facilities

There are a number of business location activities you need to carry out when choosing a location for your business. These include, among others:

Business Location: Research the area

You should consider whether or not to locate your business in a cluster business area; that is, where there are many businesses.

Moreover, the type of business you want to do should determine where you should locate your business.

Before you locate your business in any area, you should research the area. For example, you need to find out whether the area will be suitable for the type of business you want to do.

Beyond that, you should find out if people have in the past done that type of business in the area. And whether they succeeded or failed.

Furthermore, if they failed, you should find out why they failed. Consider whether you can fix the challenges that made them to fail. You need to ask people as many questions as possible about the area.

Business location: Population

Another important factor to consider when choosing a business location is the population of the area.

For instance, it will not make any sense for you to locate your business where there is low population.

If you locate your business in a remote or low populated area, chances are that only a few people will buy from you.

Therefore, you should locate your business where there is high population to improve your odds of getting customers.

Business location: The target market

Still another important factor to consider when choosing a business location is the target market. Simply put, target market means the potential customers who you expect are most likely to buy your products.

For example if you are selling books, you should not locate your business near automobile parts market. This is because those who want books should normally go to areas where books are sold; not automobile parts market.

Business Location: Cluster Business Area

Business cluster area simply means an area where there are many businesses.

Locating your business in a cluster business area has advantages and disadvantages. For example, if you must locate your business in a cluster business area, you should be:

  • Ready to update your offerings
  • Able to provide high quality products
  • Ready to advertise your business
  • Able to provide excellent service
  • Continually update your knowledge of the industry.

Business location: Competition

Remember that business is war and that the common enemy is competition. Therefore, you should research the level of competition in the area you want to locate your business.

You need to find answers to the following questions:

  • What is the competition like in the area?
  • Is there a big competitor with huge resources selling the same or similar product like mine?
  • Can I fit into the competition and be able to stand out?
  • What strategies am I going to use to fight competition?

Business location: Security

Yet another factor to consider when locating your business is the issue of security. Sometimes there are areas which are well known to prone to violence, arson, robbery and other criminal activities.

Therefore, you should locate your business in an area where the security of your investments and customers should be secured.

Business location: Visibility

When making business location decision, you should remember that your business needs to be visible for everyone to see.

For instance, if you locate your business on a busy road, preferably on a “T” junction, it should be easy for passers-by to see your business.

Furthermore, the more people see your business, the more they are likely to buy your products.

Location of Business: Availability Of Labor

Availability of labor is very important because, in business, it is people that make things happen.

The caliber of labor you will need should depend on the nature of your business.

However,, there might be times when you will need highly skilled labor to carry out some specialized activities in your business.

Similarly, there might be some activities, which for one reason or another, you cannot carry out.

Therefore, you should locate your business where it should be easy for you to get any category of labor you need for your business.

Business Location: Basic Infrastructure

Another important factor you consider is availability of basic infrastructure.

For example, you need electricity to power your systems to ensure that your business runs smoothly.

In the same vein, you also need water to improve sanitation in and around your business.

Moreover, you need good access roads to make it convenience for your customers, suppliers and employees to assess your business.

Business location: Government Policies

Sometimes, government policies affect businesses. Therefore, before you locate, you need to find out if there is any likelihood that the government will in future acquire the land and building your want to use for your business.

Furthermore, you should find out if there any plan by government to expand an existing road. Or even plan to build another road that could affect your business.

Should any of these happen, you will lose your customers. And it should take you a long time to acquire new customers.. Location of business: Environment Issues

You need to locate your business in a clean environment. For example, if you locate your business in erosion prone or dirty area, your customers might likely leave you.

Do not forget that no customer would like his vehicle to be stuck on a bad road.

Communication facilities

Communication facilities are essential for the smooth running of our business.

You need to be able to communicate easily with your customers and suppliers. For instance, you need to be able to make cold calls to your customers or even visit them periodically.

Finally good business location should result in more customers, quicker stock turnover, more sales and hence profits. You should, therefore, look before you leap.

Related: How To Start Your Own Small Business


By Samuel Ijenhi


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