How to Choose the Right Location for Your Business

Location is crucial to any business’s success, but the commercial real estate needs of a restaurant, retailer, consulting firm, mechanic or manufacturer will all be very different. For a restaurant that opens for lunch but serves food until the wee hours of the morning, the best location might be a buzzing downtown with a mix of office towers that go dark at the end of the workday and theatres, dance clubs and entertainment venues that light up at night. For a retailer that sells books, magazines, snacks and travel accessories, a storefront along the corridors of a busy airline terminal would be a dream come true. A consulting firm might want their office building situated just steps away from a transit junction that lets them get to clients in any direction quickly, while a mechanic or manufacturing business may only be allowed to set up shop in an area specially zoned for industrial services.

Benefits of Choosing the Right Business Location

Land on the right spot for your business, and you could see:

Increased Revenue

Find a location that drops you into the middle of the home territory of your target market, allows customers to arrive by foot, car or transit, plus gives them a clean line of sight to your front door, and you’ll score a trifecta of location wins that could lead to higher revenues.

Reduced Operational Expenses

If your business doesn’t require foot traffic to be successful, and you’re one of the first companies to settle into an up-and-coming neighbourhood, you’ll likely benefit from reduced lease rates for years to come and might also be able to tap into a more affordable labour market.

Greater Efficiency

If your business requires you to ship and receive products regularly, choosing a location close to vendors and suppliers will save you both time and money.

Opportunities to Increase Your Brand Impact by Interacting with the Community

Even companies located far away from the main streets of their town can increase their brand awareness by engaging with local business associations or sponsoring local teams and events. The increased exposure can help you discover new possibilities for partnerships, assist with employee recruitment and even bolster your business’s reputation.

The Top Six Factors to Consider in Choosing Your Business Location

No matter what business you’re in, finding the building or space that ticks the most boxes on your location checklist will take time and research.

The top six factors to consider when selecting your business location include:

1. Access to Your Target Market

Whether your company sells limited-edition kicks to sneakerheads with reams of disposable income or graphic design services to businesses on a budget, being as close as possible to your target market is imperative for your business’s success. For our sneaker-seller, the perfect location might be a heavily trafficked retail shopping district near a community boasting lots of high-income families with a tonne of tweens and teens in tow and a variety of schools, sports venues and gyms nearby. The perfect location for our graphic design company could be a mixed residential and commercially-zoned neighbourhood housing all sorts of small businesses, including restaurants, hair salons, independent clothing retailers, nightclubs, dry cleaners, copy shops and even hardware stores. Because all these companies will need help with logo design and the ongoing creation of brand assets, including signage, business cards, menus, sales collateral, product packaging, digital marketing materials and more, there’ll likely be enough demand to keep the design company’s docket full. So, how do businesses go about gathering detailed information on a community? If you intend to do the research yourself, Statistics Canada’s Census of Population Data is a good place to start. Head over to their website, type in a postal code, and you’ll be presented with the latest non-identifying government data on age, sex, marital status, family characteristics, household characteristics, language, citizenship, immigration status, ethnicity, education and income for individuals in the area. If you prefer a bit of help with the task, you might want to enlist the services of a commercial real estate expert. They’re likely to be well-versed in the latest stats for the area and know what buildings are available to buy or lease within it. For a deeper research dive that adds psychographic, behavioural, up-to-the-minute traffic and competitive insights into the equation, you’ll want to consider paid services from companies specializing in data collection and analysis

. 2. Zoning That Matches Your Business

Once you’ve created a shortlist of areas containing enough of your target market to give your business its best shot at success, you’ll need to ensure it’s legal to operate there. A commercial real estate expert or a lawyer specializing in zoning, permitting, surveying and land use will be invaluable for this task, as will online tools developed by the province or municipality you’re interested in.

3. A Space That Suits Your Needs Now and Into the Future

While you can create a novel dining experience by situating your new restaurant in a heritage house on an organic farm – if zoning bylaws allow you to be there at all – your dreams could still be dashed by the onerous permitting processes required to get the space up to code. That’s why finding a building location with capabilities that closely mirror your operational needs in both the short- and long-term is a must. The best business location will allow you to reconfigure, renovate or grow with relative ease, all without suddenly running afoul of zoning requirements.

4. Access to Talent

Whether you’re a tech startup looking to hire professionals skilled in AI, data science and software development or a gym specializing in training for the over-fifty crowd, you’re nowhere without access to the talent you need. However, if your business location requires you to compete for qualified personnel, your labour costs could soar too high to be sustainable. In the post-pandemic world, we now inhabit, you won’t fare any better setting up your company in a location with lower labour costs but a long commute for prospective staff. With a hybrid work model likely to remain for the foreseeable future, the best talent-lead location strategy will be one that deposits your company near lesser-known pools of high-quality talent in less competitive environments. Because small- and even medium-sized businesses often lack the resources to discover these areas, getting advice from independent recruiters may help.

5. Access to Amenities That Foster a Better Work-Life Balance

Locating your business in a building or area that gives employees a reason to commute could be the secret weapon that helps you win the battle for employee face time. Office buildings with accessibility for all, affordable daycare services for children, outdoor spaces where dogs and their owners can run, play and socialize – plus concierge-like laundry and grocery delivery services – will all make work feel more like home.

6. Costs

Lastly, you’ll need to consider your business location based on its cost. But as we’ve seen, cost isn’t just about a net lease vs. gross lease or property tax, utility and insurance payments. It’s also about the cost of borrowing money to pay for renovations, litigating zoning disputes and being unable to attract and retain talent. So, does the unwritten rule of not spending more than 15 per cent of your monthly revenue on rent still apply? Yes. According to the Business Development Bank of Canada (BDC), a better method of evaluating business locations might entail drawing up a list of must-have and nice-to-have features, scoring prospective sites for both, and then seeing where each location nets out. Using this system, it’s clear from its total score (see table below) that Location 2 would rank higher than Location 1.

Post a Comment