Kody Wirth is a content writer and SEO specialist for Palo Alto Software—the creator's of Bplans and LivePlan. He has 3+ years experience covering small business topics and runs a part-time content writing service in his spare time.
8 min. read
Updated January 5, 2024
Choosing the perfect business location is more than finding a place that looks like you envisioned.
It’s about being in a competitive location that helps grow your business, staying within budget, and meeting local and state regulations and laws.
In this guide, we’ll work through key questions to narrow your location search and provide additional resources to help you find the right spot.
To start your search, you should understand the different types of business locations.
Identifying what physical setup best fits your business will make your search more focused and efficient. If you’re unsure which location type fits your needs, the remaining questions should provide additional clarity.
Dig deeper: What to consider when selecting an office space
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The next step in narrowing your location search is to bring your budget into the conversation.
Your budget will determine the locations you can afford and solidify the areas feasible for your business.
Understanding your budget involves more than knowing how much you can afford to pay on rent. It also includes your startup and operational costs and additional charges to make the location viable for your business.
Tip: To truly understand your financial position, we recommend you create a financial forecast.
Here are some additional questions to answer:
A clear and comprehensive understanding of your budget and all associated costs will enable you to make an informed decision about your business location. It will also help you avoid any unexpected expenses.
Is price the most significant factor when selecting a location for your business? Narrow down your search with typically lower-cost options like coworking spaces and non-traditional rental properties.
Coworking spaces provide far more benefits than cheaper-than-usual rent. From networking to improved facilities—sharing space may be a significant growth opportunity for your business.
Know what it will cost to rent or purchase a space for your business and handle any renovations to met your needs.
Your business location plays a significant role in shaping customer perception. It’s not just about the physical place but how the location aligns with your brand image and the expectations of your target market.
Your location should resonate with your target audience and meet their expectations regarding convenience, accessibility, and overall vibe.
For example, an artisanal coffee shop would fit well in a trendy, artistic neighborhood or near cultural spots where customers seek a unique, cozy atmosphere. It wouldn’t work in a busy commercial area or near fast food chains and big box stores where cost and speed are likely more important to consumers.
It’s essential to conduct market research to understand the preferences and expectations of your target market. Consider factors such as:
Remember, your location is an extension of your brand. Choosing a location that aligns with your customer’s expectations will help you attract and retain them.
Don’t underestimate safety when choosing a location. A location viewed as unsafe can deter potential customers, make it challenging to attract and retain staff or lead to a higher risk of theft or vandalism.
Here are a few ways questions that can help you gauge overall safety:
Remember, choosing a location that is both actually safe and perceived as safe by your target audience is essential.
Dig deeper: How to set up a safe working environment
Choosing an area that is thriving and poised for growth is crucial for the long-term success of your business. Growing demand indicates a healthy economy, leading to increased foot traffic, higher sales, and a good network for partnering or networking with other companies.
Here are some key questions to consider:
A real-world example of this is the tech boom in Silicon Valley.
The area became a hub for technology companies, attracting a highly skilled workforce, and led to increased demand for services and housing in the area.
Dig deeper: The best places for high-growth businesses
For a location to be truly accessible, it should be easy for you, employees, vendors and suppliers, and your customers to reach your business.
Since accessibility needs vary, here are some key questions to consider:
You likely don’t need to answer “yes” to every question for a location to work. Just be sure that a lack of accessibility won’t negatively impact your sales, recruiting, or brand perception.
Ensuring that you can legally operate in a given location is crucial.
To determine your legal ability to conduct business, start with zoning regulations and ordinances. These affect your ability to purchase the property, make changes, and even operate your business there. Remember, many of the same zoning laws apply even if you plan to operate your business from home.
To determine the zoning of a property, contact your local planning agency or consult an attorney. A simple online search may also provide a zoning map of your area.
Additional legal considerations include:
Remember, it is essential to thoroughly research and understand all legal requirements and restrictions before finalizing your business location.
Do you need help figuring out how to start your location search? Try exploring one of these business location factors, courtesy of the experts from the Young Entrepreneur Council.
Knowing what kind of location you want and what you need to consider is all very well, but where do you go to find a physical business location? While not an exhaustive list, here are a few ways to get started:
Finding the right location is one of the final steps to start a business. Now it’s time to solidify your team, get your marketing strategy in place—and ensure that opening day at your new location is well-staffed and well-attended.