Common Mistakes To Avoid When Choosing A Business Location
One of the main factors that will determine your business’s success or otherwise, is where you choose to locate your business. Whether you’re starting your business for the first time or simply looking to create a new branch, it is crucial to have a smooth starting process.
Location is of prime importance to businesses. But unfortunately, very few entrepreneurs take the time to conduct thorough research into picking the right site for their companies.
So, are you thinking about the best location for your new business? Here are some common mistakes you need to avoid.
Going where everyone else is going
Many entrepreneurs make the mistake of literally following the crowd when choosing which location is ideal for their business. The fact that a particular place has large numbers does not automatically mean that it has the customers you’re searching for.
No matter how busy an area is, take the time to find out what kind of potential customers you can find there and what they’re looking for.
Also, find out if the people living or going to such places actually care about the products and services you’re offering. It is also essential to find out what kind of traffic to expect in such areas. For example, are the people locked in their homes and offices all the time? Is there heavy pedestrian traffic? And so on.
Not understanding the costs and your finances
Many entrepreneurs make the mistake of looking for the trendiest or latest things when it comes to selecting their location. And most of them do this without paying much attention to the cost involved or if they have the financial muscle to handle the expenses such areas come with.
For example, an aspiring business owner will want to start operating in a modern city setting with access to all the trendy stuff and technology. But as great as such locations may be, most of them also come with expensive costs.
Chief among such expenses are the high rent charges and high power consumption. That is why it is crucial to ensure that not only can you afford to “open shop” at such places, but also that your location will not eat too deep into your bank account as time passes.
If you’re starting a small business for the first time, opting for a location can be very tricky, as you aren’t entirely sure yet what your business’s cash flow will look like. Therefore, it is best to start operating from a less financially-consuming location before ‘upgrading.’
If you plan to build a structure you prefer, from the ground up, take the time to speak to an industrial building construction professional and get all the necessary financial quotes before you take any further step.
Making assumptions without visiting the location
The last thing an aspiring entrepreneur should be doing is making assumptions about anything – much less about the place you’re considering for your business location.
No matter what other business owners might have said about a particular area, it is imperative for you first to visit that location and assess things for yourself.
When you first visit the area you prefer, take a look around you for signs that suggest the location is ideal for your business.
- For example, are there other businesses there offering similar products or services?
- How are they performing?
Do not only pay attention to the mere presence of anchor stores. Although those may be a good indication of a healthy business environment, it doesn’t necessarily mean that the atmosphere will also favor your business, especially when planning to introduce something new.
Find out what is going on in the area, future developments, ongoing construction projects, etc.
Not considering access to the location
It is no use having a beautiful location with a great view and modern facilities if your potential customers cannot access your business premises. If you want to find out if a particular area is easily accessible, there are few things to consider.
- First, is the location difficult to find or off a beaten path?
- Secondly, is the building accessible to the disabled? Thirdly, does the building’s interior make for easy movement?
- And finally, which part of the building is your potential office space located? For example, it is in the basement or on the first floor?
Access is vital for every business location. A good business location makes it very easy for your future customers to know where you are and find you.
Getting pressured into choosing a location
Sometimes friends, family, or even real estate agents may make suggestions about places they consider ‘perfect’ for your business.
Real estate agents may rush you into making hasty decisions by making you believe that an available space comes at a great price and will not be available for long. But no matter how attractive any proposition or suggestion may be, do not allow yourself to be pressured into making any decision without first taking the time to do due diligence.
If you’re using a realtor’s service, you should always keep in mind that their primary goal will be to close a deal as quickly as possible. So, if you feel pressured to make a decision, you should consider finding a new agent.
Making full payments upfront
Always make it a point to negotiate if you want to land the best deal. For example, if you find a place you love but you’re still unsure about the price, negotiate first. Even if you have enough funds to pay full price upfront, it is best to negotiate for a lower price.
Although there is no guarantee that the seller will be ready to reduce the price, it is always worth the try.
Alternatively, instead of paying the full cost on the spot, find out if there are ways you can strike a long-term payment deal and the possibility of a cost-reduction when extending your contract.
This option is best if you’re looking to lease the place. If you want to purchase the place, find out if you’ll have to bear the cost of any renovation work or repairs – which means you can bargain for a much-reduced price.