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Location Vital For The Successful Small Business

 

Location is a vital consideration in the running of any small business. Even the best retail operation will struggle to thrive if it’s in a place that’s difficult to reach. Easy access to public transport, or an office in a well-known building, can have dramatic consequences for the small business owner.

But knowing exactly what constitutes an ideal location is a trickier proposition. Thankfully, there are a few proven guidelines to follow when it comes to choosing the right business premises.

First, the golden rule is that the value of a piece of property for your business depends almost entirely on where it is located. This might seem obvious, but bearing this maxim in mind at all times means that you will be likely to reap the business rewards associated with it. These rewards include increased consumer traffic for the retailer and easy access to suppliers and transport routes for the manufacturer.

Remember that the business value of a property cannot be measured in purely financial terms. A financially valuable property is usually a good sign that it is located close to resources such as transport. However, the nature of your SME will also determine how the value of its location can be measured. That is, put an emphasis on proximity to housing or shopping centres if you sell consumer goods, or try and find premises near the banking district if your clients come mainly from the financial world.

Another rule to remember when looking for a business location is that compromise is often the key to eventual business success, at least when you are involved in a fledgling operation. If you have a limited budget, put financial concerns before your personal preferences – accept that this year you may have to settle for a less appealing location, as long as the savings you will make will allow you to move into that great office around the corner soon.

And finances and property value aren’t the only factors to take into account. Consider taxes – taxation laws vary from state to state. Some small business owners may consider moving from one state to another as a shrewd business move which ends up providing significant savings when tax time rolls around.

But beware the flip side of this decision. Changing locations may well mean less tax, but it can also result in having to reduce the amount you charge for your goods or services. This can be a difficult business decision and, yes, that old faithful, compromise, arises here again.

Of course, rental outlay needs to be kept in mind if you are setting up a small business for the first time, or if you are making a move as an existing SME owner. Using the retail operation again as an example, a shopping mall can be the ideal location for this type of business – big crowds and proximity to other successful companies can contribute significantly to their revenue.

However, rents are invariably higher in prime locations such as popular malls. Once again, think compromise – starting out in a less prestigious spot can be a sensible decision if it will allow you to operate on lower costs in those crucial first few months.

Security is another concern that you are likely to have when pinpointing the ideal location for your small business – and rightly so. Make sure that you are aware of the security situation in an area before you decide to relocate your business there. If an area has poor security and a reputation for being unsafe, customers may be deterred from going there to do business. It is important for any SME to choose premises in a place where both team members and clients feel safe and comfortable.

This might seem like an obvious piece of advice, but make sure that the location you need is available, not only where you need it but also when you need it. It is easy to find a suburb or area that would suit the needs of your company perfectly, but finding the right property there at the right time is an entirely different matter.

One way to maximise your chances of snaring that great property at the right moment is to study both the current real estate climate as well as past, and likely future, trends. Local real estate publications and even word-of-mouth are great ways of keeping up-to-date with the latest trends and, hopefully, knowing exactly when that office or shop you need to transform your business will become available.

Don’t underestimate the importance of a good inspection prior to moving in, either. By properly inspecting the property you are hoping to move into, you will be able to see if it is as attractive in real life as it was on paper.

Importantly, you will also be able to determine whether it has the appropriate infrastructure for your business needs. Some business premises may already be set up in line with your business needs; others might look great at first glance but prove unsuitable after a second visit.

Remember also that if your SME specialises in a particular field – such as computing or travel – locating it near similar businesses will enable you to take advantage of an area’s reputation for this or that specialisation. Often, people associate a suburb with a particular business sphere, so some of your marketing will already be done if you move there.

Finally, think of your personal preferences. If you are happy to spend time commuting to work, an office a little further from home will probably suit you. On the other hand, a central location will be vital if you need to get to work quickly or rely on public transport. Family commitments should also be a factor in your decision. As with all business choices, your personal happiness should be a key influence when it comes to your company’s location.

Until next week,
Mike Reddy
www.syb.com.au