Running A Business

How to Choose the Right Business Location

Oct 20, 2016 • 5 min read
Choosing a Business Location
Table of Contents

      If you need a brick and mortar business location you’ve probably agonized over finding the best spot because you’ve recognized the importance of a good location. While there are certainly many factors that go into running a successful small business, having the right location can really make or break you. After all, if no one comes to your store, it’s pretty hard to turn a profit.

      So how do you find that perfect spot that will drive the right traffic to your business? It will require a good deal of planning and researching on your part but is completely doable if you’re ready and willing to put forth the effort. Here are 7 things to consider before locking down your perfect location.


      Who are your customers and where do they “live”? I’m not talking about their actual places of residence, but the stores they frequent. For example, are you targeting 18-35 year-olds who do most of their shopping at malls? Or are you aiming to be the coffee shop of choice for busy professionals on their way to work?

      If you want to be a quick stop shop, placing your business location in the middle of a mall is probably not the best idea. And if you want to attract your typical mall goer, having it several miles from the nearest mall won’t get you much traffic either. You need to know the answer to this question before you proceed with any location hunting, because that will be the deciding factor on what types of locations that will be successful for your business.

      Busy Shop Area1


      You may have found what seems like the perfect space for your business, but what about its surroundings? The right space alone does not guarantee success. How easy is it to get to your potential business location? Can you only get there by U-turn? If they see your store and then pass it, how easy is it for them to turn around? You need to have a location that will be inviting and easy to access. Otherwise, even if a potential customer sees and is intrigued by your store, it won’t be worth the effort if they have to drive 2 miles before they can turn around.

      You also need to assess the accessibility of foot traffic. How easy is it for someone to walk to the location? Are there sidewalks nearby? What about public transportation? This also ties in with knowing your demographic. If you know that a significant amount of your target market is more likely to take public transit, then your location needs to be near a bus stop or subway station. If you anticipate the majority of your patrons will drive to your location, then they need to have ample opportunity for parking.

      Surrounding space

      How successful are the nearby businesses at your potential location? Is it a booming area or in need of some major TLC? It’s nice to want to set up shop and try to revive an area, but unless you’re a big business, you may want to seriously re-evaluate that notion. If other businesses haven’t succeeded there, it could be a good indicator of how you’d fare in that same space. Be very wary of putting your business in the thick of that. Remember, you can’t help an area if your business goes under.


      Competition can be very good for business. It can also smother a business. Knowing the difference for your business type is crucial. You probably hear more often that it’s never good to be too close to your competition. But what if being close actually helps business? Have you ever seen an intersection that has McDonald’s, Burger King, Wendy’s and Taco Bell all within a few hundred feet from each other?

      One of the biggest reasons customers see is convenience. If Store A doesn’t have what I’m looking for, maybe neighboring Store B will, or even Store C. A customer likely would not patronize every single one of them if they were all far apart from each other.

      If you’re curious about the science behind this theory, here’s a breakdown of why it is common. Moral of the story: don’t write off a good business location just because it’s close to a competitor. If you are a retail business, you would likely do very well near your competition.

      Busy Shop Area2


      Having that sense of security should be a big factor for you, and will be a big factor for your potential customers. If they don’t feel safe leaving their car in the parking lot, they likely won’t enter your store. Not only that, but it should be weighed heavily on your part as well because the higher the crime rate in the area, the more susceptible your business is to break-ins and theft.

      If it’s in a part of town where the windows and doors of all nearby stores are barred at night, that’s probably not a good sign. Running a business is tough enough as it is. Don’t add to your stress by placing yourself in a dangerous part of town that is known to have a higher than average crime rate.

      Zoning/permit issues

      Every area is zoned for certain things and knowing what your potential location is zoned for is vital. You don’t want to get everything squared away and then discover that the area isn’t zoned for your business type. Check with your local zoning authorities to make sure that you’ll be able to do business in that location before signing any contract.

      Due diligence

      On the surface, the site may look great, but do your homework. Why is it available? What was here before? Why did they move locations? Additionally, research what the average utility and operational costs would be at this potential business location. Does the space include utilities with the rent or will it be separate? If you plan to run a business such as a restaurant or a coffee shop, does the space have the necessary hookups and/or plumbing you’ll need to operate? You may want to consider hiring an engineer to evaluate the condition of the location before signing a contract.

      This is where you tie up all loose ends regarding your potential business location. If you think you’ve found “the one”, then leave no stone unturned. Make a checklist before you even start your hunt and don’t look over any factor you considered important to the success of your business. Don’t get caught up in the idea of a great location until you’ve done your research. Know for a fact that it fits the bill on all accounts before proceeding.

      Don’t let the task of choosing the right business location overwhelm you. Use these tips as a guideline, make your own checklist, and know your limits. As long as you go into the search with your eyes wide open, you’ll be able to find the perfect spot for your business.

      About the author
      Marisa Smith

      Marisa Smith is a small business writer. She enjoys creating content that inspires small business owners to find new methods and techniques to improve their business operations.

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