Importance of Physical Location for a Small Business or Start Up Business

When considering a location for your small business or business start up, there are four things you need to keep in mind - price, product, promotion and place. "Place" refers generally to distribution of your product, where your customer evaluates and ultimately receives your product or service. While this may not matter much for people who work virtually, or who run a business that drop-ships from a third party, it's critical for restaurants, retailers, and even many service businesses. Ironically, while "place" is often the most permanent of these factors, it's also often the most overlooked.

When determining a location for your smalll business do not rely on a post office box until you locate where you want your small business to be.  P.O. boxes are a "no no" when it comes to establishing your business credit.  Wait to do anything until you have a physical location for you business or else you may end up being blacklisted by the credit reporting agencies. 

Location is about more than just choosing a building. Perhaps for you, opening your business in your own town, or even your part of town, is a given.  But consider the big picture:

Income taxes and sales taxes differ greatly from state to state, as do regulatory requirements. You want to be sure that the state in which you live is entrepreneur friendly, especially to the specific type of business you want to run. Now might be the time to consider a move if it isn't, or possibly to open your business in a nearby state if you live near a state line.

Rent and other costs, availability of labor, taxes, regulations and government economic incentives can also vary greatly from city to city, even within the same state. Make sure to choose a neighborhood that will complement your business' image. Rent varies greatly according to location. You want to be sure your small business is convenient to streets, parking, and other businesses.  This will definitely add to customer traffic and loyalty.    

There are many factors to consider in choosing the location for your small business. While cost is obviously a major consideration, you must also think about other factors as well.   Safety and zoning should be right at the top of your list.  Of course, your product may dictate your location, as some businesses must be zoned Industrial or otherwise.   Many cities have very strict zoning requirements that keep certain types of manufacturing and service businesses out of residential neighborhoods, for example. Make sure your business is even allowed there before you sign the lease!

As you can see, a fully informed decision involves a lot of issues. Determine your priorities, keep an open mind about your options, do your research, and get ready to make one of the most important decisions about your business. For questions about choosing a small business or business start up location, please contact us.