Choosing the Best Location for Your Business

This is probably the most well-known saying in commercial realty: Location, location, and location. But is location really important?

Yes, but not always. Some businesses are more important than others. It doesn't matter as much for others as you might think. It all comes down to what type of business you're in, how you reach customers, and how you interact with your employees. These are five things to keep in mind.

Retail vs. Non-Retail

Professional or non-retail businesses and retail businesses are more dependent on their location than retailers. There are some considerations for both. It's crucial to have your retail business in an area that is appealing to customers. It is a smart decision to be where customers are or where your product/service is lacking. Professionals are more focused on convenience than location selection. Access to transportation is an important factor for some companies. Professionals' location is also affected by specific dynamics. Doctors prefer to be near hospitals and other medical centers. Attorneys tend to cluster near courthouses. Accountants are often found in areas that cater to other professional businesses.

High Visibility vs. Low Key

It may not always be worthwhile to rent the most prominent space or lease space in the busiest shopping mall. These locations often have a high rent cost that may not be worthwhile for your business. Some businesses send their employees out to customers, and they rarely do business from their office. These companies don't care as much about location. They can save money by renting less expensive spaces and use the savings to fund research and marketing. However, high-end retailers need to be located in the best places. High visibility locations are often essential for high-end retailers as their image is crucial to their success.

Understanding Demographics

Who is your ideal or typical customer? What time do they shop in your store? Businesses rely on demographic data such as household income, daily traffic, and population. These factors may not be as important for others. For example, people tend to get their hair cut near their home, whether they are going to work or at weekends. Salons don't care about traffic or daytime population; they want to be near residential areas. A restaurant that serves lunch and breakfast is another example. They will usually be more successful if they're close to employment centers that can cater to the business crowd.

The distance from the business owner's house is a major factor often overlooked. The person deciding where to locate their business will likely consider how far it takes them to get there every day. You can balance your needs and those of your employees and your personal needs by weighing the locations in accordance with how they will serve your overall business strategy. Then make an informed decision about your location.

Co-Tenancy

Ever wonder why all the car dealerships are clustered together. Or furniture stores? Or clothing shops? All of them want to be close to one another because consumers want to compare prices before making major purchases. Because their customers shop in the same way as grocery shoppers, shoe stores prefer to be close to other soft-good retailers. Dry cleaners and liquor shops do better when they are within walking distance of supermarkets. Destination businesses like wholesale grocers don't depend on their neighbors to succeed. Because their trade areas are often regional rather than local, it is important to be close to major roads and highways.

Quality Wins

You can reduce the negative impact of a location if your business offers a great product or service and if you provide excellent customer service. Even though many restaurants are located in poor areas, they still manage to do a great job. They are better at understanding the VOC (Voice of the Customer) and consistently deliver. Customers are more willing to travel long distances for unique or special experiences. These companies demonstrate that it is possible to defy the norms and still be a profitable outpost.