Business Location: 11 Factors Check-list for an Ideal Location

Business Location


Table of Contents

Table of Contents

Business location – One of the most essential decisions you’ll ever make is where to locate your company. There’s no need to worry.

Even mediocre businesses with faulty business ideas can benefit from a prime location. Even the best-of-the-best items can fail if they are placed in an unsuitable environment.

That is why it is critical to invest some time in locating the ideal location for your company. The proper decision-making process extends beyond on-the-spot instinct and delves into the specifics.

This guide to locating the perfect retail location will walk you through all you need to know before deciding on a site. We’ll assist you in avoiding frequent issues that can arise later (or on Day One) and put your business in jeopardy.

First, let’s agree on why this effort to identify the proper site is worthwhile. Then we’ll talk about how to narrow down your possibilities to find the ideal location.

Location, Location, Location: Why It Matters

If your company relies on foot traffic, you need a good, clean, easy-to-access location that makes a favorable impression on your customers. Consider how many competing firms are in the region, prospective zoning rules, permits, taxes, and government incentives when looking for the optimal location.

Business owners should also look for sites where they can conveniently access supplies and complete shipments.

Questions To Ask Before You Begin Your Research

Will you rent or buy your space?

There are numerous advantages and disadvantages to renting versus purchasing your business premises. If you’re not sure how long you’ll be in a given area, renting might help you assess whether it’s ideal for your business. Renting allows you to shift your business more easily, and there is less danger if you close because you are not financially liable for the building. Furthermore, when renting, you do not have to worry about building maintenance or repairs.

However, renting limits your ability to customize your workplace and promote your business. Renting also implies that your business location is subject to the terms of your lease with the landlord.

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Are you expanding to a second location?

A successful second location is more than just a carbon copy of your first. Consider shipping and receiving operations, as well as how you might improve on your original site. Renting a second site may be a better fit because of the shorter commitment and lesser financial risk, as well as the simplicity of moving in and out of the new location.

If you’re expanding, is there market demand in your new location?

When considering expanding to a new location, consider the proposed location’s automobile and foot traffic as well as the local competition. Create a network in the area, interact with the community, and reach out to neighboring business owners to learn about the particular difficulties and possibilities that businesses in the area face.

Are there any government or tax incentives for investing in a new business location right now?

Don’t neglect any incentives that the city or state may provide to businesses. Investigate any municipal grants, incentives, or tax credits that your company may be eligible for by opening in a given location. Consider state-specific small business loans that you might be eligible for. For example, if you’re looking to develop your business, the US Small Business Administration specializes in financing for underrepresented entrepreneurs.

Location for Your Business

Factors To Consider Before Choosing A Location For Your Business

You just need to know where to look to discover a wonderful spot. Allow us to assist you.

When selecting a location for your business, there are numerous aspects to consider. Everything from the curb appeal to the fragrance outdoors to the subway tile bathroom might be scrutinized. There’s a lot to consider.

While all of these factors are significant, some will be more relevant than others. We’ll walk you through the top 11 factors you should examine before deciding on a final site for your retail store.

Zoning Regulations

First, figure out this step. You don’t want to invest too much in the ideal retail store location just to discover that your business activity is not permitted there.

Check to determine if retail stores can use the space. Next, consider the closeness to commercial and residential zoning. Proximity to other commercial enterprises may help you gain additional foot traffic, yet proximity to residential zoning may assist neighboring customers in visiting your store in less time.

Take care of the zoning logistics first, and then you may focus on the other factors.

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Cost Of The Location

One of your first considerations should be price. It makes little difference if you find the ideal location for your retail store if you can’t afford it. To determine affordability, you must compute the following costs:

  • Rent – How much will the monthly rent cost?
  • Terms – What terms are associated with the lease? Will you need to sign for two years or on a month-by-month basis?
  • Fees – Are there any other fees associated with the property? Are there additional fees for trash pickup or receiving deliveries at the location?
  • Remodeling – Is the space move-in ready, or does it need substantial upgrades to prepare for business?

Consider all of these expenditures when comparing places to get more accurate apples-to-apples comparisons.

Set a budget before you begin looking for a location. If you fall in love with a website, you may be tempted to stretch your budget to make it work. However, keep in mind that rent will be one of your most expensive continuing bills, so try to make it as low as possible.

Region-Specific Business Expenses

The pay and minimum wage laws that apply to your firm will be determined by its location. Employee salary in Los Angeles, California, for example, is more than in Burley, Idaho, due to the higher cost of living.

The city and state you choose for your business also determine the government licenses and fees you must get. Consider charges such as property taxes, sales taxes, city taxes and fees, and state taxes.

Furthermore, property value and rental rates can influence the cost of insurance in your area. This goes beyond the fact that a tiny space in the middle of a big city costs a lot more per square foot than in rural areas. For example, if your ideal site is in an earthquake-prone city, earthquake insurance will be more expensive.


Who are your clients, and where do they “live”? I’m not referring to their actual homes, but rather to the stores they frequent. Are you, for example, targeting 18- to 35-year-olds who conduct the majority of their shopping in malls? Or do you want to be the go-to coffee shop for busy professionals on their way to work?

If you want to be a one-stop shop, setting up shop in the midst of a mall is usually not the best choice. And, if you want to attract the usual mall-goer, having it many miles away from the nearest mall won’t help. Before you go location seeking, you must know the answer to this question because it will determine what types of locations are most likely to be successful for your business.


You may have located what appears to be the ideal location for your company, but what about its surroundings? The appropriate environment does not ensure success. How accessible is your possible business location? Can you only get there by making a U-turn? How easy is it for people to turn around if they see your store and then pass it? You must have a welcoming and easily accessible site. If a potential consumer sees and is captivated by your store, it won’t be worth the effort if they have to drive two miles before turning back.

Business Site

You must also consider the accessibility of foot traffic. How far can someone walk to the location? Are there any nearby sidewalks? What about the public transit system? This is also related to knowing your demographic. If you know that a large portion of your target market will use public transportation, your site should be near a bus stop or subway station. If you anticipate that the bulk of your customers will drive to your location, you must provide enough parking.


Having that sense of security should be important to you, and it will be important to your potential clients. They are unlikely to enter your store if they do not feel safe leaving their automobile in the parking lot. Furthermore, the higher the crime rate in the neighborhood, the more vulnerable your organization will be to break-ins and theft.

If it’s in a part of town where all adjacent stores’ windows and doors are barred at night, it’s generally not a good indicator. Running a business is already difficult. Don’t add to your worry by locating yourself in a dangerous neighborhood with a higher-than-average crime rate.


Competition can be beneficial to business. It can also suffocate a business. Knowing the distinction for your business type is critical. You’ve probably heard that it’s never a good idea to get too close to your rival. You should think about how rivals might damage your firm. Will you be able to share clients with them, or will you have to compete for every shopper who walks down the street?

But what if being nearby truly benefits business? Have you ever passed at an intersection when McDonald’s, Burger King, Wendy’s, and Taco Bell are all within a few hundred feet of each other?

Customers regard convenience as one of the most important reasons. If Store A doesn’t have what I’m looking for, perhaps Store B or Store C will. If they were all too far apart, a consumer would most likely not patronize all of them.

If you’re interested in the science behind this hypothesis, here’s a breakdown of why it’s so popular. The moral of the story is that you should not dismiss a suitable business location simply because it is adjacent to a competitor. If you own a retail store, you will most likely outperform your competitors.

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Other Nearby Businesses

Your location must be convenient for your intended audience. Perhaps there is foot traffic from another business that you might profit from, or foot traffic from a nearby business that would help your business. Consider whether there is a specific service or sector that is lacking in the area that your company can fill. Additionally, make certain that there is no direct rivalry that would detract from your business if you opened a location there.

Nearby businesses can influence how simple or difficult it is for your staff to commute or live in the region. Will your staff have enough resources, entertainment, housing, and schools in the area? Your proximity to other firms can be mutually beneficial in terms of enriching the lives of your employees and keeping them in the neighborhood.

Related Article: Find a Location – Small Business Hub

Location’s Popularity Trend

Just because a location is thriving now does not mean it will remain so in the future. Examine the reasons that contributed to its success and determine whether it is a fad or a long-lasting trend. Is a new mall or retail center on the opposite side of town about to open? What effect will this have on the popularity of your targeted location?

Examine the existing businesses in the region. Are they completely new, or are there some veterans? A slew of new businesses will suggest that an area is on the rise, while numerous long-standing enterprises will demonstrate the space’s long-term legitimacy—a combination of the two is ideal when selecting a location.

Parking Availability

Consider how customers will gain access to your company. Is there free parking in front of your business? Is it available someplace nearby if not? Will visitors have to park several blocks away to get to your store?

Many of these considerations will be influenced by whether you opt to situate your business downtown or in a more car-friendly area of town. There is no correct answer, but keep parking in mind while you weigh your options.

Related Article: Pick your business location | U.S. Small Business Administration

Commuting Distance

It’s easy to get confused on a map while looking for the ideal location for your retail shop, but don’t forget about your home address. If you intend to run operations, you will have to commute to and from the store daily. Check that this does not interfere with your work-life balance.

If it means preserving (or establishing) the lifestyle you want, it can be worth launching a shop in a little less-ideal location. Consider your employees’ commute as well. Will you be able to find nearby workers, or will your employees have to travel a long distance to work?

Choose A Location With Confidence

The site may appear appealing on the surface, but conduct your research. What makes it available? What was there previously? Why did they change their address?

In addition, investigate the average utility and operational costs for this potential business site. Is the rent inclusive of utilities, or would they be extra? Is the area equipped with the appropriate hookups and/or plumbing if you intend to run a business, such as a restaurant or a coffee shop? Before signing a contract, you should consider hiring an engineer to inspect the property.

This is the section where you tie up any loose ends concerning your possible business location. If you believe you’ve found “The One,” don’t leave any stone unturned. Make a checklist before you begin your search, and don’t leave out any factors that are vital to the success of your firm. Don’t get too excited about a great location before you’ve done your research. Before proceeding, ensure that it meets all of your requirements.

Don’t let the effort of selecting a suitable business site overwhelm you. Use these suggestions as a starting point for your checklist, and be aware of your limitations. You’ll be able to find a terrific location for your business if you go into the hunt with your eyes wide open.


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