A relative of mine has always wanted to open a small cafe that serves coffee, homemade pastries, and sandwiches.
However, when he wanted to pick the location, he picked a very affluent area, and the rent there was quite expensive. So, he ended up renting a small place that is a bit secluded, far from the main street, and away from people’s reach. Plus, it was also almost in the same proximity of a big well-known coffee place that it didn’t have a competitive advantage against, so the business ended up failing.
If there’s anything we should learn from his experience, it’s that there are several elements we should consider when starting a business. One of the most important things to consider is the location, as it can be a hit or a miss.
Here’s how the location of your business can directly affect its success.
Easily Reachable Businesses Attract More Customers
The location of any business has to be easily reachable for potential customers, meaning it has to be situated in an area where the people who would be interested in the product you are selling can easily reach it. For instance, the best place for a coffee shop is near an area where a lot of companies are concentrated because employees usually need a cup of coffee in the morning, and during their lunch break, they’d need a quick bite.
Likewise, you need to provide easy and clear access to your business. If the business you operate is located in a hidden area that is a little bit challenging to spot for the casual customer, make sure to provide clear directions on your website and social media accounts or add it to Google Maps.
Additionally, make sure that your business is located in an area where it’s easy to find a parking spot. Adequate parking for both employees and potential customers is important. If it’s hard to park near your business, a customer might be discouraged from coming back to do business with you. However, if you are not targeting motorists and your target is people on foot or bicycles, keep that in mind when picking the location. Maybe consider adding a bicycle parking rack for the bikers.
The Local Community Can Make or Break Your Success
Some products appeal to certain communities. Therefore, analyzing where your potential customers will be most concentrated, and choosing a location that is close to them is of the utmost importance. For example, opening a luxury shoe shop in an area of mainly working-class people will not be a smart choice because it fails to target the right audience. Similarly, if you own a restaurant that serves Ethiopian food, you can’t possibly open in a neighborhood populated mostly by people from Indian backgrounds.
You might want to consider opening the business where different communities are present, such as shopping centers. According to professional property experts at https://www.phillipsedison.com/properties, a shopping center can be the perfect location for many businesses to flourish, as they typically see a lot of foot traffic. Shopping centers encompass different people from different backgrounds, which means that no matter what you are selling, there’s bound to be a few shoppers who will need your services.
Close Proximity to Suppliers Ensures Quick Deliver
Picking up the location where suppliers of quality goods are close by ensures quick deliveries, meaning that your business’s productivity will not be affected. So, when choosing a location, make sure the suppliers will be able to reach the property to deliver the goods on time and provide the necessary services that the business requires to keep running smoothly. For instance, if a customer comes and they need an item but it’s unavailable because the suppliers haven’t delivered it yet, this will reflect badly on the business.
Proximity to Competitors Is Bad for Business
When picking a location for your business, make sure that the competition that exists in that area is scarce or non-existent to increase the likelihood of customers using the products or services you are offering. For instance, a tech store selling computer hardware or software services located in an area that has few stores that offer computer services gives the business advantage.
If the location turns out to be in proximity to a competitor, try to choose a spot that isn’t too close to them because that will mean at least 50% of potential customers might use your competitor’s services instead of yours. Also, the services or products you offer must have a competitive advantage that makes your business stand out.
As you can see, several factors influence where the ideal location for a business should be. For a business to be profitable, at least some of these factors, such as the target market and proximity to competitors, should be forecasted and thoroughly analyzed before choosing a location to ensure its success.