You might have heard that the three most Important words in real estate are location, location, location! There is a lot of truth to this statement. The site you choose for your small business can shoot up your prats almost immediately, or send you to the cleaners in no time. If you have chosen small business as one of your vehicles for attaining financial freedom, then you must read this article with attention.
Have you ever wondered why the giants like MacDonald’s and the big banks do everything possible to occupy the choicest Sites along the major high-streets? They are not deterred by the rental costs and, often, are happy to even buy over the entire property rather than lease it. The reasoning behind this strategy is rather simple – they need to make it easy for their customers to reach them!
It is no surprise that shops that deal on stationery or snacks surround schools teeming with needy scholars. Also, sellers of sports apparels take up shopping space near stadiums and sports training grounds. Expect to see a ‘mama put’ eating joint surface wherever there is a big building construction project – after all, the workers have to eat; don’t they? Even a highbrow area like Lagos Marina, which houses many of the banks, plays host to mama puts who realize that the hungry bank workers prefer good low-budget meals to the more expensive take-away fast foods. Its a question of “limited” budget! Continuing with our observations, there are business clusters for various business sectors e.g. the Ladipo automobile spare parts market in Lagos: computer village in Ikeja; and some free-trade zones (FTZ’s) set within seaports or duty-free shops inside international airports. If you are into any of these related small businesses, you’d better make sure you have a presence in your pertinent crucial location.
The bottom line is: if you are not reaching your customers, and making it easy for them to reach you, you are likely not going to make a lot of sales. You are probably leaving money on the table, and very soon your business will start feeling the pinch, struggle and – who knows – maybe even die, as a result of cash flow and profitability problems. Therefore, you must give the choice of your small business location all the importance it deserves.
In this article, we bring you an exciting article by lkenna Nwachukwu, featured in connectnigeria.com. In it, Nwachukwu provides 10 tips to consider while selecting a location for your small business. To ensure a high passage (traffic) of your ideal customers, you must draw a balance between apparently conflicting factors like rental costs; presence of security, electricity, and good roads; the part of town of interest (e.g. mega malls require a large parking area usually on the outskirts of town); and status symbol (where you find an MTN store, also look out for a Glo, Airtel, or Etisalat presence).
Location also induces many small businesses to take other strategic decisions e.g. setting up a warehouse or a workshop (or even a small factory) in a location with befitting characteristics; and setting up shop for sales (or a showroom for demonstrations) in another location which is just as conducive for these other different activities. Here are excerpts from the article… Most people regard finance as the most important factor involved in setting up a new business. And it’s understandable that they would take that view. Give me that start-up capital. and IV make something fantastically successful out of it. This mirrors popular thought. But only a surprisingly small number of intending entrepreneurs take the decision about where to locate their businesses as seriously as they should. The result is that despite the availability of other resources needed to kick things off on the business turf, many of these new firms soon wilt under the scorching consequences of being unsuitably located. Customers are hard to come by, business costs eat voraciously into pockets which grow leaner all the time and the sickly state of the whole enterprise is mirrored even by solemn-faced workers and employers. Deciding the location for a new business may prove to be a challenging task, but if a cost-effective, brand-boosting and profit-maximizing decision is made, the cost will be worth it and much more. The business type and target market are general determinants; needs, finance and the business-friendliness of any potential location are also things to consider. In making clear and definite decisions the following evaluating factors should be borne in mind:
Follow These 10 Tips to Choose Wisely.
1) Demographics: Who are your (potential) customers, and how proximate are they to your business location? What is the proportion of the local population whose characteristics correspond to the profile of the sort of customer the business targets? Can your business access and recruit the workforce it needs from the population?
2)Accessibility: Is the location easy to find? is it on, or accessible from a well-known, frequently used route?
3) Infrastructure: Is power supply regular, or infrequent and erratic? Now much will it cost to use alternative power sources in view of the likely time span of power outages? Are the roads around there in good condition?
4) Traffic and Frequency of Human Movement: Retail businesses are preferably located in high-traffic areas; with a large number of people going through or walking along the location’s main route. However, companies which deal in more confidential business do well to set up in areas away from the intense bustle.
5) Proximity to Suppliers and Other Businesses and Services: Are your suppliers able to physically reach you in a relatively short time and at little cost? Are there businesses which may benefit yours located close by e.g. restaurants for workers to have lunch during work break? Are there businesses present, from which you could derive new customers?
6) Formation of, and Impact upon, Brand Image: What impression does the address make on people’s perception of the company and its brand?
7) Competition: Although it might be a good idea to locate one’s business dose to firms engaged in similar activity (this usually aids accessibility, as is the case with banks and textile shops), siting a new business not too far away from a much larger and more powerful, and already established potential rival may prove disastrous.
8) Rent, and Other Costs: Is the location affordable? transportation costly?
9) Safety: is it safe? What, if any are the security concerns associated with the ‘location?
10)Personal tastes and industry specific needs apply too. After all, it’s up to you to decide.