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Choosing a Business Location Checklist

You may be an entrepreneur in the beginning stages of a startup, or a small business owner who needs more office space. Perhaps you run a web-based service, and business is booming. With demand so high, you are ready to open a brick-and-mortar location. You all have the same problem: finding the perfect location.

Things To Consider

Choosing a new business location requires consideration of a broad range of factors. The right location must have the perfect mix of local zoning rules and tax laws and potential customers and available workers. If you are opening a coffee shop, for instance, your business plan must account for the existing chain shop right across the street.

The nature of your business will determine the best location. Do you need lots of foot traffic? How about pre-existing parking? Many viable storefront businesses have died quick deaths because of a lack of parking spaces. You'll also have to balance the cost of a commercial lease agreement, along with issues that may actually keep people away such as noise restrictions or limited public transportation.

The Small Business Association (SBA) can provide valuable support to new businesses establishing themselves. Local offices provide market research in your area and tips on your target market demographics. You'll also be able to attend various networking events and meet other business owners like yourself.

Considerations and Questions

These are a few of the questions you should ask and answer before deciding on the perfect location for your business. Not that they are not the only questions your business will need to be answered. If you're not sure about your specific circumstances, you should speak with an attorney or the SBA for more advice.

Legal and Financial Considerations

  • Zoning Ordinances: Before you sign any lease agreement, be sure the area has zoning for your type of business. A commercial office zone may not accept a retail clothing store. If there is a clothing store in an office building, it may have a variance which will end when you sign the new lease.
  • Hours of Operation: Are there conditions or covenants in the lease or in the building that will limit your business operations? For instance, if the main door is not opened until 9:00 a.m., you will need to provide other access for employees and clients before that time.
  • Demand: Can the neighborhood support your business idea? Will the traffic into the area provide the income you need to turn a profit? An office block filled with probate attorneys and tax preparation services will not have the traffic flow to support a discount retail store.
  • Taxes: Are the business taxes in this area comparable to other areas? Are there local or state sales taxes to consider? The SBA can provide this information.

Access and Transportation

  • Parking: If the building is stand-alone, does it have its own parking lot? If it is in a complex, what is the parking situation? If it is a storefront, is there enough street parking available?
  • Deliveries: Will you need regular deliveries? Does the building have a loading dock if needed? Take a look at similar businesses in the neighborhood and see how they handle deliveries.
  • Traffic and Neighbors: What is the traffic flow around your location? Will it affect your business? Look at your neighbors as well as the traffic. A noisy bar or dance studio next door can have the same effect on your yoga studio as rush-hour traffic.
  • Employee Access: Will your employees have places to park? Make note of daily or weekly parking restrictions.
  • Transportation and Access: Is there public transportation close by? Is the building ADA-compliant? New owners are often required to bring an older building into compliance when they take occupancy.

Competitors

  • Direct Competition: Who else has a similar business in the area? In what ways can you differentiate your business from others? For example, many towns have a “restaurant row" where everyone goes out for dinner. A town can accommodate many restaurants in one place as long as they offer different styles of food, but likely cannot support a dozen identical steakhouses in one area.
  • Uniqueness: How do your business needs differ from your competitors? If your business model differs enough from nearby competitors, you may be able to succeed despite similarities.
  • Established Competitors: Are your competitors well-established with a solid customer base? It can be harder to break into an existing market in some businesses, but your business may bring customers to it. Again, the SBA or the chamber of commerce may be helpful in establishing your market demographics.

Employees

  • Supply of Workers: Are there enough qualified workers to staff your new business?
  • Commuting Issues: If not, will employees need to travel long distances to reach work? Nothing makes people quit like a long commute.
  • Competitive Wages and Payroll: What are wages and housing costs in the area? Can you pay competitive wages to your workers?
  • Bonus Enticements: Can you provide incentives like parking or transportation?

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Get Your Legal Questions Answered

As you scout out potential locations for your new or expanding business, you'll likely have some important questions about zoning laws, competitors, and wage scales. Don't forget you still have a business license, a business name, and paperwork to file with the Secretary of State. Speak to a qualified business law attorney in your area for help with all these details.

For more information, visit FindLaw's Small Business section to do further research and find answers to common questions about starting a small business.

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