How to Pick a Business Location for Your Small Business
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You’ve guided your small business through initial funding, business planning, and operations. Now, you’re ready for an exciting and challenging milestone — finding your first business location for a retail storefront or office space.
There are many options for commercial space out there, but finding the right one can be tricky. Your budget for rent, square footage considerations, and lease terms will all be of crucial importance. However, there’s another factor no small business owner should overlook, and that is location.
Location can make or break many small business storefronts. Follow these tips to find the perfect place that will allow your entrepreneurial vision to thrive.
1. Stay Within Your Budget
Finding a location will largely depend on your company budget. So, know how much you can spend before signing any documents. Determine the standard rent for each area and use that to build your initial budget. Then, add in additional costs that will come every month — the average price for utilities is $2 per square foot.
Also, keep in mind hidden costs outside of the monthly rent. Business owners should ask commercial property owners about expenses such as taxes, renovations, and utility upgrades. Then, consider whether you need to account for permit and vehicle licensing costs. Will you need to secure additional parking for any staff or designate a place to keep a work vehicle?
There are a lot of moving parts to any lease budget. Stay true to your general guidelines and use them to make the best choices for your small business’ growth.
2. Remember Your Brand Vision
To find the perfect location, consider how the area you’re investigating aligns with your brand. What is your target market, and where do they live — are they retirees in single-family homes, trendy young professionals in urban centers, or families largely located in the suburbs? You want to align your new location with the people you most want to reach.
These calculations also depend on what type of small business you run. For example, a retail store may need lots of foot traffic to capture customers, so picking a walkable community is ideal. On the other hand, a construction company that needs to park multiple work vans may not find the space it needs in an urban space.
3. Consider How Location Impacts Recruiting
Do you aspire to grow your small business into something much bigger? Will you count on new hires to have a physical presence at your new location? Having an office space in an attractive area can increase your candidate pool.
Look for a spot with good access to public transportation and popular amenities, like restaurants and shops. This is especially useful if you need to hire from a competitive talent pool, where candidates are looking for quality-of-life touches like access to fun lunches and an easy commute.
Of course, depending on your industry, you may be focusing more on expanding remotely. In this case, don’t extend your budget for rent by accounting for all the employees who won’t need to be physically present in your new space.
4. Pick a Safe Area
Having a place you and your employees and customers feel safe is essential. Research location crime data and talk to other local businesses about recent break-ins. When touring the space, check for a well-lit area and parking options. You may also ask the building owner about preventative measures like security cameras.
Doing your research and keeping a level head will serve you well in determining a safe location. Don’t let sensationalized claims about city living deter you from opening a store in a bustling, popular neighborhood, but do pay attention to how the location feels when you visit and keep best security practices in mind.
5. Look for Places With Good Parking
Parking is a crucial consideration for any office space. Is there a convenient parking space for employees and clients, or will they have to pay? If you only have paid parking options, make sure your business can offer validation.
Also, make sure the parking lot is safe and convenient to pull into and out of. A sharp turn off a busy highway may be less attractive to your employees and customers alike.
6. Think About Your Infrastructure Needs
Consider how the building is set up and how it can help meet your business goals. For example, is there enough square footage to grow?
Also, consider the layout. For instance, if there is a lot of foot traffic throughout the day, you might want an open-concept layout. However, if you need to have private client meetings, you will want closed-off rooms available.
Here are some infrastructure factors to consider:
- Communication technology
- Mail and delivery services
- Reception services
- Conference and meeting rooms
- Accessibility features
Tips to Pick the Best Business Location
Choosing a commercial space requires a little thought. You need to balance considerations like rent prices against the need to appeal to your desired customers and employee pool. Make sure you follow these tips to find an ideal work location that will serve you well for years to come.
Need a small Business loan for your first business location? Whether you want to upgrade your equipment, hire more staff, or open a new business location, we can help. You can get access to the necessary funds in just three steps. Check out Capital for Business funding solutions or apply for a business loan today.
Evelyn Long is a writer and editor focused on home building and construction. She is the co-founder of Renovated, a web magazine for the home industry.
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