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June 12, 2017
Planning & Strategy  |  6 min read

How to Pick a Location for Your Small Business

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John Rampton

Now that you have your business ready to go, including a business plan, name, and product or service, it’s time to select a place to do business from. After all, it’s all about location, location, location, right?

Before you lease that business space, storefront, or office, there are many decisions that go into selecting the right place.

Consider these factors before you sign that lease:

Business type

The type of business you operate significantly impacts the location. If you are a retailer or restaurant, you want to consider what part of town gets you the most foot traffic. What fits your style? Depending on the size of your retail business and what you are selling, you might even consider a kiosk location.

If you run a traditional service-based business, then you will want to consider locations in commercial buildings. However, nowadays, you can also choose co-working spaces or your own home.

Customer preference

Your customers and prospects will also determine your company’s location.

For some clients or customers, proximity to you is very important. A client may want or need to come to you to get what you are offering. Other types of business can be mobile in nature, such as a hairdresser, pool cleaner, repairs, gardener, etc.

Still, other types of businesses may cater to both those who want to visit the store and those who shop online.

Another group of businesses may never need to see their customers or workforce. These businesses can operate completely by remote with no emphasis on location.

Safety and accessibility

If your customers, vendors and suppliers, and employees need to come to you, then you will need to consider other factors. You'll want to address such issues as safety, accessibility, traffic, and parking.

These factors will be part of the customer experience. Clientele will determine how well your vendors and employees feel about working with you as well. Accessibility is also important.

You'll need to consider whether or not different days of the week or travel time change the customer convenience. All of these factor into those who wish to come to your business.

It’s great if the rent is cheaper in a certain location. Consider if the location makes it difficult for your audience to reach you, then that cheap rent means nothing.


Proximity to the competition is also critical. You don’t want to be next door to another restaurant or retailer that offers the same thing. This will become a marketing and strategic nightmare not to mention confuse your customers and create pricing wars.

However, in "the olden days," the business schools taught, "if you are building a fruit stand, build it next to another fruit stand." (Especially an established fruit stand— instant customers.)

Sometimes it is best to be the only type of business in the general area offering a certain product or service.

Rules and regulations

It’s important to ensure that you can do business in a particular place. This means checking with the city or county about any types of zoning restrictions. Are there ordinances that prohibit your type of business in that area?

For example, you cannot operate certain businesses next to a school.


Amenities in certain areas are critical to business success. For example, certain businesses may not have updated their technology for the type of equipment you use. Does this new area have the fiber optics you need to maintain a certain internet speed?

You may require other features in your new business operations. An example would be refrigeration, storage, and heating and cooling options. Some buildings don't have these capabilities.

Costs and budget

Overhead costs should be kept as low as possible. That means consider how much the utilities will cost or whether you have access to solar to keep your bill down.

You don’t want a space that is too big for your business size. However, you want a location where future expansion can be accommodated. All of this comes with a price, but don't blow your entire business budget for the location.

Certain cities, states, and countries have higher income and sales taxes. Others have more expensive rent costs. Look at the location labor expenses. Some places even offer tax breaks and economic incentives. These numbers should also impact where you select your business location.

Your budget must also be factored into the overall criteria. You'll want to have a few location ideas checked out. Take time to consider the cost of each locale. See which area most closely matches what you can pay.

Check into what changes in your business throughout all types of business cycles and seasonal flows. It matters.

Location locked down

Once you have narrowed down these factors and have a better picture of what area would be best suited to your business. Now it’s time to proceed to setting up that space so you can launch and start doing what you love.

Don't forget that you also have the option to have a location independent business, which means that your business goes wherever you go.

If you have done your research, then you can find success in your newly chosen location. Perhaps your growth will be exponential. Isn't that the plan?

If your passion is alive to building your dream—you may need to start scouting for additional space to grow your business!

2017 Strategic Planning Kit - Download Now

 John Rampton Bio Photo Small.jpeg

John Rampton is an entrepreneur, investor, online marketing guru, and startup enthusiast. He is the founder of the payments company Due.

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