Location, location, location is a phrase we have all heard tossed around when it comes to real estate. Everyone says it, everyone knows it, but let’s talk about why it is so important and how we can ensure we make decisions that reflect the importance of location.
Why is location so important in real estate?
There are many reasons! Location will determine the success of your business because it will determine who your clientele is, what kind of visibility you get, the local market you are a part of and competing against, and many other things.
Think about it this way, if you open a cafe in a small town like Dunkirk, Maryland, it won’t operate and succeed in the same ways as if you were to open a cafe in say, Arlington VA. Demographics are one of the most important things to consider while you think about picking a location, because the people will make or break your business. You need to choose somewhere you are likely to succeed based on market trends and demographics.
Now let’s talk about things to consider when it comes to location.
1. First and most important: Demographics.
Think about two things: who are your customers and how close are they to your location. Make sure you have a demographic profile conceptualized that answers a couple questions for you such as the age, interests, finances, familial status, etc of your potential customer.
Once you have this profile thought up, you know your target audience and you can start looking at statistics. Pick a location that has a high demographic for your target audience.
You should also consider your community. Some locations are heavily reliant on one industry, and some locations are neighborhoods that value supporting small local businesses and variety. Think about this and do your research.
Competition is a double-edged sword. If there is a lot of competing business nearby, comparison shopping may be popular and thus you can thrive from this. You can catch extra business if you are near business that support each other, such as entertainment areas near restaurants.
On the other hand, if you are selling a very specialized product you don’t want to be close to other similar product-dealers. When consumers are looking for something specific, they often know that choices are limited and will pick one location to get what they are looking for. So consider your product and how it can fit into the market.
You want to be easy to access for traffic and foot traffic as well. If you are located on a busy street, that is good for foot traffic, but is it easy for cars to get into your store? Do you have a parking lot or will customers rely on street parking?
If you are opening your business in an office building, consider the main doors and whether they will be locked at times such as weekends. You want your building to be accessible as much as your consumers will desire. Ensure sufficient parking for anyone who will use your services.
What will the style of your business be? Are you operating as a formal and high-end business? Or will you err on the side of casual? Your location should match what your particular image will be. If you want a fancy restaurant, don’t look to a small town that doesn’t have a lot of money because people won’t frequent an expensive and high-end restaurant there.
5. Business expenses and taxes
Expenses will vary depending on location, and you need to keep this in mind as you calculate startup costs. Costs will depend on standard salaries, minimum wage laws, rental rates, utilities, and government licenses and fees.
Furthermore, taxes are different depending on state, county, and city. Some states have a reputation for being kind to certain types of businesses. This explains why some places have saturated levels of some businesses like manufacturing and tech startups.
Visit state and local government sites to scope out the tax landscape so you can consider this as you search.
6. Local zoning ordinances
These are highly specific to the region. You need to ensure your business will conform to local zoning requirements.
Neighborhoods tend to be zoned for commercial use or residential use. Zoning laws can restrict and even ban certain types of businesses from doing business in an area. So do your research to ensure you can do business where you want.
As you can see, there is a lot to consider while you navigate the important field of location. Do plenty of research, listen to podcasts, talk to other business owners. Gather all the information you can about business and location so you can make the best decision about where you want to start your business before simply diving in.
Aside from that we, as your trusted location advisor, are here to work with you throughout your location selection process. Feel free to reach out if you need assistance in finding the best location fitting with your needs.