July 9, 2024
You have come up with a clever business idea. The plans are all made, and you are ready to leap. However, you soon realise that choosing the right location for setting up this business is challenging.
The location can make or break your business. It’s not enough to secure an available place you can afford; it is also about finding a location to set your business up for success. That is where all your customers come, your brand makes its presence, and you leave your mark.
How do you make this crucial choice? It's a mix of gut feeling and hard facts. Below is an analysis of the critical factors to consider when selecting a location for your business and how a proficient commercial real estate agent can assist you.
A location means so much more than just an address; it is the lifeblood of business. A key area will drive footfall, attract the right clientele, and extend your target market's reach. Otherwise, much is left to missed opportunities and stagnation in a poor location. So, dealing with a trusted commercial real estate broker will be the first important thing. They bring local expertise and an in-depth understanding of market dynamics to make all the difference.
Imagine a boutique coffee shop opening in a busy downtown area. They have a great product, friendly staff, and a cosy atmosphere. They are in an up-and-coming area on a side street that only sees a little foot traffic. They have been doing everything right but need help bringing people in the front doors. On the other hand, another coffee shop opened a few blocks away on a main street with high visibility and easy access. They did very well, fast becoming a neighbourhood favourite. What was the difference? Location. And having the proper guidance of a commercial real estate broker could have changed the first shop's outcome.
Let's look at what matters when picking your business location.
1. Demographics and Target Market
The first step in selecting a location is understanding who your customers are and where they are. Demographics are crucial to this. What works for one population segment may not work for another.
For instance, CoStar reports that areas with a high concentration of young professionals often see more success with trendy cafes and boutique fitness centres. At the same time, family-oriented neighbourhoods tend to support family businesses with children's activity centres.
2. Accessibility and Visibility
Accessibility is essential in ensuring that your customers can quickly get to you. This includes proximity to public transportation, parking, and ease of access from major roads. Another vital factor is the visibility component; the more easily passively noticed it is, the more spontaneous visits you will have. Properties with good visibility from a busy street or nearby famous landmarks are highly advantageous.
3. Proximity to Competitors
Being close to rivals is a double-edged sword. Proximity will grant them the destination area effect, whereby customers know they have several options that raise the volume of visits. On the other hand, too much competition would reduce the market share. You need to determine if clustering with competitors will help you or if a more isolated location would be better.
4. Local Economic Conditions
An area's economic health has much to do with the success of your business. Are the businesses around you thriving, or are there signs of rough financial times? With data, you will have an idea of the local economic indicators regarding the rate of employment, average income level, and growth trends in businesses. This information aids in ensuring that you set up a business in a location with a stable, growing economy.
5. Zoning and Future Development Plans
You can be assured that your business won't run into any legal dilemmas because of local zoning laws. Moreover, getting information regarding future development plans in an area is necessary. Will infrastructure, residential development, or commercial projects be built in the area? That will enable you to avoid such complications or take advantage of prospective growth opportunities.
Considering the data available, you can make much more informed decisions today. In the case of commercial real estate, CoStar may become just the platform that will give you comprehensive data to drive an intelligent decision. Whether looking at market trends, property values, or the local economic conditions, having access to reliable data eliminates a lot of risk associated with choosing the wrong location.
Take a retail chain that harnessed data to determine up-and-coming neighbourhoods with ever-increasing proportions of its target demographic. The chain moved into these areas and became cornerstones of the community early on, setting itself on the path to business success.
While data is precious, it still needs to replace human expertise. An excellent real estate broker is your ally. They know the local market inside out, have valuable connections and can give you advice that fits your business. Their experience adds real value to the data you gather.
Therefore, fostering a good relationship with your broker is very important. You should be able to trust in their judgement and ask questions, thus including the broker in your critical decisions. Now, on the negotiating table, a broker can help you secure the best terms possible and ensure that the location will work toward your business goals. Such expertise can save time, money, and stress in the commercial real estate investment journey.
Selecting the appropriate location for your business can make a significant difference. It's not just about your current situation but your future position. You should understand your future customers, their means of transportation, and the upcoming developments in that area.
Give yourself an information advantage and ally with a commercial real estate expert. With the right tools and guidance, you'll find the perfect location that sets your business up for long-term success.
