Location – the pillar of a start up business
When deciding to start up their own business, many entrepreneurs are overwhelmed by the sheer volume of decisions they need to make, designing and developing the business plan, taking care of the registration and other such issues, that they overlook the importance of location. Whatever kind of business you are opening, if it includes a storefront, then location should be at the top of your to do list. The proper location can do wonders for your little start up, provided of course you are sitting on a winning product or service as well. However good or offering may be, it will bring you nothing if people don’t know about it and don’t come to your door to buy it. Getting your business online is also an important step for conquering the large market of consumers, but the brick and mortar retail world can offer you immense benefits. Irene Dickey from the University of Dayton’s School of Business says that in this world “the three most important decisions are location, location and location”.
That being said, here are some tips that will help you in your endeavor of choosing the best location for your business. The first thing you need to do is check the demographics, including traffic pattern, lifestyle data and competitive analysis. You product or service may be most attractive to consumers of a certain age, income or other such factors and you need to make sure that your store is in a place where that kind of relevant traffic is at high levels. Neighborhood traffic analysis is also important, as it will tell you what other business are drawing consumers to the area and what is their type, industrial or office parks, hospitals, schools and so on. When you check the demographics, it is also important to check for both foot and highway traffic. A good location does not necessarily imply the center of the metropolis, it can also be in the middle of nowhere, if the highway is greatly populated and you offer a service that people on the road can make much use of, such as a restaurant. This is why demographics are important, they show you the advantages of a location beyond the superficial aspects that you can think of yourself.
The next step in finding and choosing a perfect location is checking your competition or, as the founder and CEO of Kahn Research Group, Greg Kahn, says “ the best place to be is as close to your biggest competitor as you can be”. He says that traffic and demographics are important, but more crucial it is to land that “perfect” customer, which you can more easily do as a start up business if you find a way to benefit from the marketing efforts of your competition. Furthermore, you can be sure that they chose that location based on through analysis of traffic and ideal demographics, so that part is covered. Obviously, being so close to a major competitor presents some risks, but if you are confident that your product is better, then go for this strategy.