The importance of selecting a business location

The importance of selecting a business location
The importance of selecting a business location

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The importance of selecting a business location

Business location selection is a practice that entails finding a new business facility site. The business location is critical for any venture to realize growth as well as experience successful operations (Hair Jr et al., 2015).

The criterion for selecting a business location

 Choosing a business location requires precision in market research and planning. Location selection entails assessment of the needs for a new venture and measuring them against the advantages of the potential sites. Therefore, it is imperative to put into consideration several factors when making a choice for the company’s location. The selection procedure involves steps such as; definition of the business idea, evaluation of the communities, real estate site analysis, tax incentive negotiation and finally acquisition of the site.

Several aspects are involved such as assessment of the supply chain, observation of the demographics, understanding state legislature, staying on budget and scoping the competition. Some other factors to focus on in the research include; the company needs, employees, customers, the equipment required to deliver services among others (Cavusgil et al., 2014).

Company and customer needs assessment

Talking of the company needs, most enterprises make a location choice that gives them accessibility to their customers. On this note, it is vital to consider the brand image and ask whether the location is going to be consistent with the intended brand. Establish whether the companies around are complementing or competing for the venture. It is very necessary mostly where shopping comparisons are common.

If the competitor is likely to make the environment tougher then it is advisable to shift the location. There is a need to find out whether the target area has potential employees and the rates of labor. If the business has a prospect of growth, then one should look for a building that offers room for expansion. The business should also be located at a place where suppliers can quickly find you. In cases where the customer base is local one is required to find out whether the population matches the customer profile for the business support.

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Find out whether the community has a stable economy for the company’s well-being.  It is vital to be cautious with a community that solely dependent on a particular company for their economy since this could lead to a downturn that is not healthy for any business. One has to think also of safety too, thus, questions about the crime rate in the select area need be asked. (Cavusgil et al., 2014).

Business style of operation and the legislature

The business location should be consistent with one’s style of operation. There is a need to determine whether the intended operation is going to be formal or informal. Having the knowledge about the legislature on businesses in a given location is very essential. Look into hidden costs because not many spaces are business ready thus requiring a lot of initial work be done before start-up.

Determine also whether the select location qualifies you to access the government economic incentives. Zoning regulations; these help determine whether one may conduct their type of venture in a given building or location. This may be found out through holding the local planning agencies (Hair Jr et al., 2015).


Cavusgil, S.T., Knight, G., Riesenberger, J.R., Rammal, H.G. and Rose, E.L., 2014. International business. Pearson Australia.

Hair Jr, J.F., Wolfinbarger, M., Money, A.H., Samouel, P. and Page, M.J., 2015. Essentials of business research methods. Routledge.

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