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11 Factors to Consider Before Choosing Your Business Location

Factors to consider before choosing your business location are vital for the success of your business. You should make the right choice to avert early failure for your new business and avoid needless movement for old businesses.

The type of business determines the place, though there are general factors that cut across all types of businesses.

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This write-up deals with what you must think about before you put your business in any given place. Some of factors to consider are survey, identifying the customer you are going to serve, environment and security, to mention but a few.

11 Factors to Consider Before Choosing Your Business Location

Since site could make or ruin a business, you must choose a place your customers can find easily, where there is security for assets of the business, and safety for your staffs and customers.

11 Factors to Consider Before Choosing Your Business Location

At the end of this piece, you will find out why choosing the right place for your business is one of the most important decisions you have to make to succeed as an entrepreneur.

1. Do a Survey

Before starting a business you must write a business plan.

While writing the business plan, you must carry out a survey of the environment to select the likely places you wish to site the business. The survey will help you choose the best place.

The questions you ask for the study will give you the exact results you want.

What you have to do, is to find out what makes the place you want to put the business the best fit for it. To get this information, you have to know whom you are serving.

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2. Whom Are You Serving

One of the factors to consider before choosing your business location includes finding out the customers you are going to serve.

This is perhaps the first thing to consider in your business plan. Whom are you serving? You can phrase it differently; what problem do you want to solve?

Finding out the problem will enable you do the following: choose the best place to serve the customers, know the size of the office complex, find out demography of customers, the type of equipment to buy, furniture and fittings to use for the office, the financial outlay to start the business, and finally the sex, qualifications and numbers of staffs to hire.

To answer this question, do a statistical study of a sample population and ask questions about age, income, opinions, buying choices, sex, literacy level, and probe into other parts of the inhabitants’ lives.

This sample population lives in a place, to find out if that area matches your brand identity, inspect the environment.

3. Environment

The segment you want to fill and the brand you hope to build will influence your choice of location for the business.

You should have a good environment for the type of business you are setting up.

For example, ask yourself what kind of environment you would put a restaurant that would serve people working in the financial sector, if that is the market segment you want to fill.

Decide based on customer profile and get the best place they would feel at home. You cannot put your business office in a slum when your target customers are bankers or mostly people working in the financial sector.

However, you should make sure you can afford the place.

4. Financial Cost

Among the factors to consider before choosing your business location is start-up capital.

Every decision you make when setting up a business also factors in the financial outlay. The money to pay for the kind of office that befits the service you want to give the town, city or state is central.

Hence, you should be wise not to pay for a large place when all you need is a small kiosk, even if you have enough capital to do it.

A popular parlance says you should cut your coat according to your cloth, and have the future in-view when choosing the site for your business.

5. Think of Expansion

Picking the right place also means you have thought of how to expand in future. You have to consider the type of office, shop or factory space that would accommodate growth of the business in the future without moving from that first place.

If you put this into the selection process, you would save yourself the pain of moving up and down, and the agony of looking for new customers each time you move into a new place.

Next thing to tackle is to find out the role of government in the sector you hope to fill.

6. Government Policy

One of the factors to consider before choosing your business location is government policy.

Think of the government policy on buildings and licenses or permits you need to open your business in the chosen place.

Find out if there are laws that prohibit use of certain machines in specific areas of the state or locality for certain businesses.

You should find out if there are advantages for opening your business in that locality such as, tax rebates, special loan facilities for your kind of business, or if there any training or general government support for businesses in that locality.

As you think about government policy, you should also find out which companies are doing the same kind of business you hope to do and how they are faring.

7. Competition

Competition is part of the factors to consider before choosing your business location.

Competition is good for all businesses. However, having strong competitors when you are just starting could hurt your business. Therefore, you may want to choose an area where you will have a competitive advantage.

Without customers you do not have a business so be wise. You should pick businesses you can compete with; especially as a startup else you would find out too late that your rival has all the customers in that area.

8. Proximity

Proximity can work for you, your staff and potential customers.

You may put the business close to your home and the customers you are serving. You could also pick an area for the office that is close to your staffs’ residential buildings.

When thinking of proximity, do not forget that solving your customer’s problem is why you are in business, so pick where a large crowd passes, a market or motor park area or central business district of your town or state, for easy access to hungry customers.

A note of warning, please do not overlook safety for proximity to customers.

9. Safety of Goods and the Customer

As you think of factors to consider before choosing your business location, safety is a primary concern for the ideal place for your shop or office.

First, you should pick a place that has good security so that your customers are safe to come and go as they like, and as often as they want without fear of theft or attack.

Make sure there is full provision for safety of goods and physical assets of your business, to stop thieves from breaking into your shop.

The place must have security apparatus such as burglar alarms, close circuit camera (CCTV) and expert security staffs to keep the place safe at all times.

Safety is a comprehensive issue, so make sure the parking facility in the office or shop complex is safe too.

10. Secure Parking Facility

A secure parking facility is one of the factors to consider before choosing your business location.

Safety of the cars in your office parking lot is important so think of this as you plan for that business site. In addition, depending on the type of business, you should plan the number of vehicles you expect to park easily in your office car park.

Pick a place that have flood light at night and where you, your staff and customers are secure even if they close late at night.

Another important thing you should consider is that cars should be able to drive in and out of the parking lot easily, have access to link roads into and out of the car park.

Choose your location to satisfy all kinds of people (able or disable) that would come to your shop daily.

11. Basic facilities

Make sure the place has basic facilities that meet your needs and that of potential customers.

It should have external facilities such as access roads to the complex and parking lot for trucks that would supply goods to you, and internal facilities such as modern toilet, water, constant power supply, air conditioners and access to telephone and the internet.


Factors to consider before choosing your business location includes doing a survey, knowing whom you are serving, demography, environment, financial outlay, thinking of expansion in the future, government policy, competition, proximity, safety of your goods and assets, future customers safety, secure parking facility and basic amenities.

You should choose a place carefully to give your business a fair chance of succeeding, bearing in mind the statistics that ninety-five percent of businesses fail within five years of their existence.

Now that you know this, avoid a careless choice and site your business for success and not failure.

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Victor Usifo

He is a Writer, Speaker, Life Coach, Blogger with a passion for personal development. Hobbies includes: Reading, Writing and Research. InfoGuide Nigeria is a team of Resource Persons and Consultants led by Ifiokobong Ibanga. Page maintained by Ifiokobong Ibanga. If you need a personal assistance on this topic, kindly contact us.

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