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5 places where you can start your business

Location, location, location
By Entrepreneur Staff |

There are numerous options for businesses as regards location. Be mindful, though, that each type of location has its own set of advantages and disadvantages.

• Shopping malls. This is one of the most common locations for a business, especially those engaged in retail. The primary advantage of locating in malls is the fact that a large number of people visit shopping malls everyday. Since malls draw in thousands of people daily, businesses that locate in malls are granted high visibility resulting in high brand awareness.

Unfortunately, locating in malls can also be very expensive, especially for startup businesses.To do well in malls, it is advisable to have a novel product in order to cut across the clutter of competing businesses. Compared to other locations, there is greater brand recall and visibility when businesses locate in malls. However, such businesses must have sizable resources in order to sustain operations. Also, depending on the type of business, the mall may get a percentage of the gross sales. There are also numerous fees to be paid when locating in malls.

• Independent landlords. An alternative to a shopping mall is a building owned by an independent landlord. This can either be in residential or in commercial locations. Compared to locating in shopping malls, setting up with independent landlords is cheaper and easier since they are open to you haggling the rent. Also, compared to mall locations, there are less restrictions on running a business—for instance, in terms of what you can offer in your store—with independent landlords. Thus it is often easier and faster to recoup your investment if you locate in commercial spaces operated by independent or individual landlords, provided you land a good enough location.

• Residential and office buildings. A lot of residential and office buildings rent out floor space for cafeterias and food carts on the ground floor. The advantages of locating in office buildings include the fact that you have a captive market—the building’s residents and office workers—and it is often cheaper than getting a space in a shopping mall. However, most commercial activity is focused during “break times.”

In particular, if you are located in an office building, while you may have a lot of clients on weekdays, you may have little to no clients at all on weekends, when people do not report for work.

• Call center buildings. A new development as regards location hunting is to situate in buildings that host call centers. Deus dela Cruz, a property locator who also operates canteens in call centers, says setting up in buildings with call centers is easier and cheaper than renting space in ordinary office buildings. This is because call centers encourage the opening of commercial establishments that would benefit their employees.
Most call centers actually offer very minimal rental to entrepreneurs in exchange for discounts on certain products like coffee. Since call centers basically operate 24/7, a business located in call-center buildings could in principle operate on a 24-hour schedule.

• Residential developments. This type of location covers condominium buildings and walk-up type establishments. People who run businesses in these places usually live in these buildings, and their customers usually come from the residents of the same building and who are familiar or friends with the entrepreneur.

This article was first published in the March 2010 issue of Entrepreneur Philippines.


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