8 Tips To Finding The Right Location For Your Business

Posted by Fitz Villafuerte under Business on September 25, 2008

It’s often said that the three most important things to consider when buying a home is location, location, location.

I believe it’s the same when you’re looking for a place to put up your business. Specially for retail stores, restaurants and many other enterprises, finding the right location is a crucial step to ensure immediate profits and initial success.

So how do you find that most suitable place to put up your business? Do you simply look for a commercial area with a lot of people? What role does competition play when choosing your business location?

Here are eight tips that can help you check if that space available for lease that you’re considering is the right one for your business.

1. Study the demographics of the area
There are two things to bear in mind when studying the demographics of a potential location. First is your target market and second is your manpower requirements. Your location should be able to provide you not only with customers but also employees as well.

The second factor is not as important as the first, but employing people from the area will greatly help in your marketing efforts. Do some due diligence and study the communities within and around your prospective location.

2. Determine the sources of foot traffic
Foot traffic or the number of people who pass by the area is important if your business will mostly rely on walk-in customers. You can do a physical count during different times and days to come up with an estimate of the foot traffic.

But in addition, you should also consider the sources and quality of this traffic. Where are they coming from and where are they going to? This will help you determine the mindset of the crowd and check if your business can catch their attention or if they’ll just ignore and pass you by.


3. Evaluate the security and accessibility of the location
There are three groups you should think about when studying the security and accessibility of an area – your employees, your customers and your suppliers.

Some of the questions you should ask yourself are: Is it safe to do your planned business in the area? Is it accessible to you and your employees? Will it be easy for your customers to find you? Is there ample parking for customers who have cars? Are there accessible suppliers in the area?

4. Analyze the competition
Who will be and where are your competitors? How is their business doing? If these establishments are already having a hard time keeping themselves afloat, then putting up a similar business in the locality is close to suicide.

However, if you believe that the business is indeed profitable and you want to penetrate the existing market, then the best place to put your business is as close to your competition as possible. Why? Because by doing so, you are likewise making yourself closer and more available to your target market.

5. Get to know your neighbors
Always consider what businesses are operating near your planned location. These can affect the image of your business and may give wrong impressions to your potential customers.

For example, a laundry shop will probably not do well if it’s located beside a vulcanizing shop because these establishments give conflicting images of cleanliness. However, a coffee shop may be able to drive customers in if it’s located near a video rental shop because both businesses usually have the same target market.


6. Check it against your space, facility and utility requirements
Will the area be enough for your business? It may be tempting to lease out an area because it’s in a good location or because the rent is cheap, but always make sure that it can also satisfy your space requirements and has all the facilities you need.

Additionally, check your utility service providers if the place is within their coverage area. A friend of mine almost rented a place to put up an internet cafe but he canceled his plans when he found out that there is no broadband internet service available for the area.

7. Be aware of the local ordinances and zoning policies
Don’t jeopardize your business by operating illegally. Make sure that your business location will not break any city ordinance or zoning policy. For example, adult entertainment establishments are normally banned from operating within a certain distance from schools.

Furthermore, you should also be aware of other local regulations that could affect your business operations. For example, most homeowners’ associations ask for monthly fees to operate a business inside their subdivision. You should become aware of this and include it in your initial capitalization and list of overhead costs.

8. Consider possible plans for expansion
This may not be an immediate concern, but optimistically thinking about business expansion helps in determining the potential of your desired location. Moving your business to another location is not an easy task. That’s why you have to consider the options available if ever your business would grow and require more space.

If it’s not possible to rent out the adjacent lots or do a reconstruction of the place, then at least go around the area to see if there are bigger and better spaces you can move into when the time comes.

I hope that these eight simple tips can help you find the right location for your business. If you want to receive more business startup tips, then please subscribe to Ready To Be Rich.

Photos courtesy of msspider66 and smohundro



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17 Responses to “8 Tips To Finding The Right Location For Your Business”

  1. Direct Selling Champion says:

    Great post, Fitz!
    Location is definitely important! It’s one of the 4 P’s of Marketing: Product, Place, Price, Promotion. It simply cannot be ignored. ๐Ÿ™‚

  2. Fitz says:

    Thanks for the comment and sharing the 4 P’s of Marketing. I will write more about the others soon here. ๐Ÿ™‚

  3. […] Operating a Laundry Shop Business – lectures on plant layout and design, production flow, customer service and information on the textile care industry. Will include training on operating a small laundry washing machine, pressing, laundry washroom chemistry, marketing strategies including pricing, promotion and business site selection. […]

  4. allan says:



    Hi i am allan, my age is 3o above. I need your help! first of all i have a business but i let my manager handle for the meantime. I figure i should stay with my folks and attend seminars and do some help with my dad encoding and other stuff temporarily for 1 year. At first it was good but later on i critism keep comming in especially from my folks. Tingin nila parang palamunin na ako and they are saying to sell my shop. When i go out they argue and saying its risky to look in other places to look for other commercial space for rent but when i am at home they are mad. (haayss… hirap maging bunso rin). Even with my gf they have comments too old and look for other to get marry. These comments are not only from my parents but also with my friends. Thing is i need your help, what to do with so much cristism? What to do with my life..if it ok for you ….?

  5. Fitz says:

    Hi Allan, first of all, how’s your income? Is it enough? If so, then I think you have nothing to worry about for now.

    What are your parents, gf and friends saying? Are they worried for you financially? If so, talk to them and understand what they are trying to say, they are only trying to help and maybe they know something that you are not aware of so it’s important that you listen.

    But of course, in the end, after considering everything, it’s up to you to decide what you want to do. I would say that you should decide based on what you believe is best for you.

  6. […] Business Success The success of a vending machine business primarily relies on its location. Choose the business right location and you’ll enjoy optimum profits. So how do you know if a location is a good place to put up […]

  7. SanDiegoVending says:

    You have put some good thought into this article. I would add some of the gold standard accounts as well:

    1 – Hospitals
    2 – Hotels, motels and resorts
    3 – Schools

    If you can concentrate on getting the type of accounts seen above you will make a lot of money.


  8. allan says:

    I just want to know how to boost your entrepeneur spirit from a lot of fustrations. I am somehow starting but my uncles had it in very good, but business went bad and now some of them just stay at home but some of them, a freelancer.. i dont know if i am path is going there. A favorite uncle of mine who is good in shipping said to me he likes my spirit but more fustrations to come (yikes!)
    I want to know how you boost your morale when everythings are seemingly to go down?


  9. allan says:

    thanks for the tips in self motivation and dealing fustrations. I am looking for a mentor.. can you be one of them? need my celphone number? Thru text or email will do for advices

    Thanks! ๐Ÿ™‚


  10. allan says:

    its me again, just curious.. is it better to study short courses in business or go create a business as soon as possible? A friend of mine told if you have the capital you better do it now so that i wont waste time and earn money now. I am looking in U.P. at the ISSI (Institute for Small Scale Industries) maybe in Human Resources and Strategic MArketing.

    Thanks again and more power

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  14. […] profit margin of 20%, a sari-sari store can still survive in today’s market. But of course, the location and your inventory of products plays a big role. So do your research first, observe your […]

  15. elena says:

    hi iam a business women with 7 kids,,,, di mo sinabe sa letter kung ano ang business mo,,,,, pero tignan mo muna kung sarile mo sa salamin,, ask mo kung ano ang gusto mo? magtayo ng negosyong gusto mo,, na kahit konti o maliit ang kita masaya ka sa ginagawa mo,,,,,,o mag aral ng 2yrs.o mag asawa nang wala ka pang matatag n hanap buhay,,, ikaw lang pwedeng mag desisyon kase buhay mo yan,,,,,,,,,dont forget to pray,,, always

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