(This is an abridged version of an article that first appeared in the recent Entrepreneur bookazine, "The Ultimate Guide to Starting Your Own Business".)
One of the most crucial decisions one must make in setting up a business is getting a good location. What do you look for in a business location? It really depends on what your business is about. If you are going into retailing, then it is important to look for a site that is frequented by your target market, because you will need them to buy your products. It’s different if you plan to go into manufacturing, as you will need an area where infrastructure support, such as roads, communications, electricity, and water, is strong. Ideally, a manufacturing plant should also be near sources of raw materials and of employable people.
Pancake House, a leading casual dining chain in the country, has these to consider when selecting areas to locate new outlets: There is market acceptance of their brand, and the area is supported by a market that would patronize the brand. Before finalizing a choice, the restaurant chain first conducts a demographic survey (the presence of a sizable number of professionals or corporate executives is important). They also make a “traffic count” and “behavior evaluation” in the area.
In fact, foot traffic should form part of a starting entrepreneur’s criteria when scouting for a good location to set up in. Husband and wife Jibby and Charisse Tinio would survey the area first and observe how many people are coming and going before they decide whether or not to open a franchised business there. The couple would go to a prospective location for a number of days and “stay there from 8 a.m. to 5 p.m. to count foot traffic.” The Tinio couple, after venturing into several kinds of franchised businesses over the past seven years, now has a total of 12 Konica Photo Express stores and three Rapide Auto Service Centers.
Here are some important issues to consider when choosing a location for your business, according to the best-selling book “Start Your Own Business: The Only Start-Up Book You’ll Ever Need”:
• Demographics. You should study both prospective customers and employees in the area. Observe if the immediate community can provide your required customer base, plus the talents you need for your business.