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5 Things to Consider When Choosing a Business Location

Featured image by Jeswin Thomas via Pexels

Despite the rapid increase in e-commerce, most businesses need a bricks-and-mortar presence. This could serve as an office for your staff or a warehouse for storing your stock. Perhaps it provides a physical presence to your customers. Regardless of your business niche, your choice of a business location plays a substantial role in the company’s success.

Nearly two years into the pandemic, with businesses returning to some sort of normality, the technological aftermath continues to persist. Nonetheless, in an age where business is conducted primarily through the internet, many new and aspiring entrepreneurs overlook the importance of having physical premises for their business.


Companies that make smart location decisions early on have a clearer path to long-term success. Contrarily, poor site selection decisions can prove disastrous. Poor decisions such as these can add to losses in terms of productivity, capital, and talent.

Whether you are just setting up your first office or shop or seeking to expand into new markets, there are a number of factors you need to consider when deciding on a location for your business. To set up shop in the right spot, here are five things you should consider before you find commercial properties for sale and start your business.

Demographics and Your Business Location

Demographics are, undoubtedly, one of the most crucial aspects when it comes to deciding your business location. Once you have established your target market, it is important that you operate close to these people. If, for instance, you set up your gaming equipment business in an area populated predominantly by older generations, your business won’t thrive. If, on the other hand, your location is surrounded by younger customers, sales will rise.


Therefore, it is essential you locate your target audience and set up camp nearby. This may involve researching various demographic aspects of your desired area. Additionally, this information will help you determine the discretionary income as well as the level of demand for your product or service in your area. This will, in turn, help you market and sell your product better.

Competitive Environment

Evaluating the competition around your preferred business location is imperative for your company’s success. This is especially true if you are just starting out. In certain cases, more competition may result in fruitful benefits for your business. This is because you may catch overflow traffic from surrounding businesses. This is especially the case if you’re serving the same market sector, such as car dealerships or restaurants.

However, tough competition also requires better marketing strategies. So if you’re not keen on the idea of fighting it out for consumer dominance, it may be best to expand your horizons and look elsewhere.

Accessibility and Infrastructure for a Business Location

Regardless of whether you own a service-oriented or a manufacturing business, accessibility and infrastructure play crucial role when deciding on a location for your operations.

Consider the local transportation network, such as highways and main roads, if you need to frequently make or receive deliveries.  Similarly, if you rely primarily on foot traffic, then make sure you’re close to transportation routes. Get to know bus, train, and car routes near the location you are considering. These will all be important factors to consider.

It is also important to consider your employees. A good location can often be a deciding factor in attracting the right talent to your business, especially if they have been offered by several other firms and need to evaluate each proposal.

Costs of a Business Location

If you’re setting up a new business, there are likely to be major cost constraints. Hence, when considering a location for your business, evaluate the benefits of renting out premises against buying a commercial spot.

If you choose to rent out, it is essential you stay within your budget. Consider the implications on your profit margin of a high rental before drawing up the agreement.

Often, property rental and purchase costs are higher in high-density, more commercialized neighborhoods, so there are substantial financial benefits to choosing an out-of-town location. However, make sure your daily business operations will not be hindered by poor transport connections.


Robust Distribution Network

An ideal business location will be one that minimizes transportation costs for distributing your products or services. Whether you plan to start a manufacturing business or ship your products directly from a warehouse, you’ll need a location that is in close proximity to your suppliers. Additionally, it will need to be linked as well directly to a network of roads. This will ensure minimal logistical costs.


Hasty business positioning decisions can jeopardize not only your income but compromise your growth potential. Hence, it is crucial to devote significant time and energy to find the right location for your business operations.