Location Issues To Consider
Take these factors into account when assessing a potential location for your business.
There are two important angles to the issue of demographics. One isyour customers; the other is your employees. First, consider whoyour customers are and how important their proximity to yourlocation is. For a retailer and some service providers, this iscritical; for other types of businesses, it may not be asimportant. The demographic profile you've developed of yourtarget market will help you make this decision.
Then, take a close look at the community. If your customer baseis local, is the population large enough or does a sufficientpercentage of that population match your customer profile tosupport your business? Does the community have a stable economicbase that will provide a healthy environment for your business? Becautious when considering communities that are largely dependent ona particular industry for their economy; a downturn could be adeath knell for your company.
Now think about your work force. What skills do you need, andare people with those talents available? Does the community havethe resources to serve their needs? Is there sufficient housing inthe appropriate price range? Will your employees find the schools,recreational opportunities, culture and other aspects of thecommunity satisfactory?
Especially when the economy is strong and unemployment figuresare low, you may be concerned about the availability of goodworkers. Keep in mind that in many areas, few people may beunemployed, but many may be underemployed. If you're offeringattractive jobs at competitive wages, you may find staffing yourcompany easier than you thought. Look beyond the basic employmentstatistics to find out what the job market is really like. Considerplacing a blind test ad (the local economic development agency maydo this for you) to see what type of response you'll get in theway of applicants before making a final location decision.
Demographic information is available through a variety ofresources. You could do the research yourself by visiting the locallibrary or calling the U.S. Census Bureau and gathering a bunch ofstatistics and try to figure out what they mean, but chances areyou probably don't have the time or statistical expertise to dothat. So let other people do it for you-people who know how togather the data and translate it into information you canunderstand and use. Contact your state, regional or local economicdevelopment agency or commercial real estate companies and use thedata they've already collected, analyzed and processed.
For most retail businesses, foot traffic is extremely important.You don't want to be tucked away in a corner where shoppers arelikely to bypass you, and even the best retail areas have deadspots. By contrast, if your business requires confidentiality, youmay not want to be located in a high-traffic area. Monitor thetraffic outside a potential location at different times of the dayand on different days of the week to make sure the volume ofpedestrian traffic meets your needs.
Accessibility And Parking
Consider how accessible the facility will be for everyone who mustuse it-customers, employees and suppliers. If you're on a busystreet, how easy is it for cars to get in and out of your parkinglot? Is the facility accessible to people with disabilities? Whatsort of deliveries are you likely to receive, and will yoursuppliers be able to easily and efficiently get materials to you?Small package couriers need to get in and out quickly; truckingcompanies need adequate roads and loading docks if you're goingto be receiving freight on pallets.
Find out about the days and hours of service and access tolocations you're considering. Are the heating and coolingsystems left on or turned off at night and on weekends? Ifyou're inside an office building, are there periods whenexterior doors are locked and, if so, can you have keys? Abeautiful office building at a great price is a lousy deal if youplan to work weekends but the building is closed on Saturdays andSundays-or they allow you access, but the air conditioning isturned off so you roast in the summer and freeze in the winter.
Be sure, too, that there's ample convenient parking for bothcustomers and employees. As with foot traffic, take the time tomonitor the facility at various times and days to see how thedemand for parking fluctuates. Also, consider safety issues: Theparking lot should be well-maintained and adequately lighted.
Are competing companies located near your business? Sometimescompetition can be good, such as in industries where comparisonshopping is popular. (That's why competing retail businesses,such as fast-food restaurants, antique shops and clothing storestend to cluster together.) You may also catch the overflow fromexisting businesses, particularly if your company is located in arestaurant and entertainment area. But if a nearby competitor isonly going to make your marketing job tougher, look elsewhere.
Proximity To Other Businesses
Take a look at what other businesses and services are in thevicinity from two key perspectives. First, consider whether you canbenefit from nearby businesses, either by the customer traffic theygenerate, or because those companies and their employees couldbecome your customers, or because it may be convenient andefficient for you to be their customer.
Second, think about how they will enrich the quality of yourcompany as a workplace. Is there an adequate selection ofrestaurants so your employees have places to go for lunch? Is therea nearby day-care center for employees with children? Are othershops and services you and your employees might want convenientlylocated?
Find out if any ordinances or zoning restrictions could affect yourbusiness in any way. Check for the specific location you'reconsidering as well as neighboring properties-you probablydon't want a night club opening up next to your day-carecenter. The Building's Infrastructure Many older buildings donot have the necessary infrastructure to support the high-techneeds of contemporary operations. Be sure the building you'reconsidering has adequate electrical, air conditioning andtelecommunications service to meet your business's present andfuture needs. It's a good idea to hire an independent engineerto check this out for you, so you're sure to have an objectiveevaluation.
Utilities And Other Costs Rent is certainly the majorportion of your ongoing facilities expense, but it's not all.Consider extras such as utilities-they're included in someleases, but not in others. If they're not included, ask theutility company for a summary of the previous year's usage andbilling for the site. Also, find out what kind of security depositsthe various utility providers require so you can develop anaccurate move-in budget; however, you may not need a deposit if youhave an established payment record with the company. If you have toprovide your own janitorial service, what will it cost? What areinsurance rates for the area? Do you have to pay extra for parking?Make sure you consider all your location-related expenses, andfactor them into your decision.
Room For Growth
Look at the facility with an eye to the future. It's generallyunwise to begin with more space than you need, but if youanticipate growth, be sure the facility you choose can accommodateyou.
Excerpted from Start Your Own Business: The Only Start-UpBook You'll Ever Need, by Rieva Lesonsky and the Staff ofEntrepreneur Magazine, © 1998 Entrepreneur Press