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Choosing the right location
The old adage 'location, location, location' is just as relevant to business as it is to housing. Whatever business you're in, your business location and premises can be the most valuable investment you make.
The main thing when you are looking for premises is to choose a prominent, easily accessible location that suits your business. For example:
- a mainstream clothing store may locate in a major shopping mall
- a panel beater may locate in an industrial village
- a lunch bar may locate near offices
- an internet company may locate in a technology business park.
Consider the following when choosing a location or inspecting an existing business:
- Traffic flow, parking, the character of the neighbourhood and the identity of other nearby businesses are all important factors.
- Looking at a number of different locations may show up weaknesses in your first choice. Have you compared different premises in different locations?
- Is the site that you prefer convenient for your clients and close to your suppliers? Don't choose it because it is convenient for you or because it is cheap.
- How much competition is in the area? If you find there are a number of similar businesses already there, it may be wise to choose a less competitive area.
- Moving premises is expensive. Is your choice of premises and location suitable for both your immediate needs and for future growth?
- Will your lease period give you time to make enough profit to get a reasonable return on your investment? It is a good idea to get legal advice before signing a lease, and your solicitor can check that your lease gives you adequate security of tenure.
- Does your lease give you an option to renew if you want to?
- Will any of the terms of your lease affect the ongoing profitability of your business?
- Have you considered all of the expenses involved in leasing the premises you choose? These may include rent, rent adjustment, electricity, cleaning, repairs, maintenance and refitting expenses.
- Many business activities are closely controlled by local councils. Have you checked with your local council about any regulations that may affect the operation or profitability of your business?
Evaluate potential locations
Initially, think about businesses that may add value to yours and where they are located. Observe these potential locations, taking note of the type and number of passers-by. You might speak to neighbouring businesses about the area and how business is going. Contact your local council regarding future development proposals and their plans for the area.
The Evaluating potential locations table can assist you in comparing potential locations and choosing the right one for your business. Here's how it works:
- When evaluating a potential location, work your way through the 24 site criteria and assign each criterion a weight (on a scale of 1 to 5) according to its importance to the success of your business.
- Go through the list again and this time assign each criterion a grading from 1 to 10, taking into account the benefits and drawbacks of each location.
- Multiply the grading by the weight to arrive at a score. Add up all scores to assign a total score for each potential location. In this way a number of sites can be compared and you can make a more informed decision about the site that best suits your business.
