You have an amazing business idea in your head, but you don’t know where to place it. Is it a business best suited for a small town or a large city? How important is the prospect of easy mass distribution of your product or service? These are just some of the questions that you need to answer when picking a starting location for your new business.
A location is very important, as if you get it wrong you could doom your business no matter how amazing your product or service is. A perfect location balances a large market with an affordable cost of living. That being said, here are the top things you should consider when looking for a location for your business.
Population
The first thing you should consider is the population of the location of your business. Obviously, a larger population means a larger potential local market that you can easily tap into. While this may sound perfect, a large market is not necessarily always the best option for starting a business.
A large market typically comes with large amounts of competition, something that some new businesses simply can’t afford. If you feel that your business will struggle standing out from the crowd at first, then perhaps a smaller market with a smaller population would be a better fit as a starting location.
A location with a smaller population may have less people to sell to immediately, but it allows you to better target individual companies and create valuable ties to your community. In addition, if you start your business in a small market you can always expand at a later date.
Potential For Distribution
Since we’re already on the topic, let’s expand upon the idea of your business’ expansion. In today’s business world, online shopping and distribution reigns supreme over all other forms of businesses. Therefore, if you want to eventually expand to this level it would be wise to pick a starting location that can easily distribute to major cities. For example, if you buy some Austin real estate for your starting location you can eventually expand and distribute to neighboring Texan cities such as Dallas, Houston, and San Antonio.
Picking an area that is within a few hours of multiple major metro areas may not help you initially, but in the long run could make a huge difference when your company starts to expand.
Demographics
One of the things you should consider when picking a starting location for your business is who your target market and demographic is and what their qualities are. How important is your target demographics proximity to your location? In addition you need to consider your potential employees. Does your potential starting location have a workforce with the numbers and skills that your business requires?
The demographics of your starting location will play a major role in the success of your business so it is important to look at them carefully.
Cost of Living
One of the most important aspects of picking your business’s starting location is the cost of living in the surrounding area. Cities such as New York City and Los Angeles have high costs of living, while smaller cities and towns have much lower costs of living. A high cost of living can cause your business expenses to skyrocket. At the same time, however, your business can in turn charge more for your product and service. On the flip side, in an area with a low cost of living expenses will be down, but your product may not be able to be sold for as much.
It is up to you to decide which scenario you think would be most beneficial for your type of business.