Office building, production plant or bake shop – choosing the right location for your start-up or established business is of incredible economic importance. But there are many other factors that must also be considered. You can be on the safe side with the help of a location analysis: Find the ideal location for any business by evaluating specially selected location factors. We are here to introduce you to the location analysis process and show you which location factors you must pay close attention to. Take advantage of our location analysis service which also includes an evaluation and location recommendation.
There are some new businesses whose success is not hugely impacted by location. But then again there are others that have to close their doors due to a poor location choice. There is a reason why the address of the location and an explanation of the location choice are considered mandatory information when creating a business plan. But as a founder, how can you tell if the location choice is of special importance to your business and when does it make sense to conduct a location analysis? The type of business you are looking to start determines if the location is a relevant factor to your businesses’ success. If it is, it would make sense to conduct a thorough location analysis. Is your venture a sales center, such as a restaurant, a hairdresser or a retail store? In that case the number of walk-in customers may be of significant importance to you. That means the location can make or break your business, so an analysis is strongly recommended. Should you, however, plan to open an office for example, other factors come into play. For example, the availability of high-speed internet or additional services and amenities that you will need to have access to, such as a receptionist, meeting rooms or phone service may outweigh the location question because it is not as much of a priority in this case. Whether you are looking to open a new sales center, an office or a production plant, keep in mind that there are conditions, or so-called location factors, that are crucial to the success of your business. These factors vary greatly based on the nature of your business. Location analysis is widely considered the ideal tool to find the most promising location.
We recommend that all new business founders analyze the corresponding market prior to conducting a location analysis. There are two essential factors that they must pay close attention to when analyzing a market: Identifying the target audience and the competition. Analyzing your target audience means asking about your main customer’s traits and characteristics. Who is the target audience? How old is my average client? What income does he or she have? Where do my customers live? If you can answer these questions, then you have a good idea of what your target audience is all about. Gathering this basic information really helps with asking this next round of questions: at which locations can my target audience be reached particularly well? Where does my target group like to go shopping? Is a shopping mall or shopping center a good fit for my business? Or does it make more sense to choose a location near a train station? Based on the results of the location analysis we provide you with a good overview on which locations provide the best exposure to your specific target customers. Evaluating the competition for each potential location is crucial because every location offers limited sales potential. The stronger the competition, the more the sales are divided between the different competitors. Therefore it is strongly recommended to conduct a competition analysis and eliminate all locations from your list with a high number of competitors nearby.
The retail industry is without a doubt the most dependent on a good location. The following location factors are crucially important for retail businesses such as bakeries, butchers, grocery stores, clothing stores, shoe stores and electronics stores:
Besides spending power, impact location and competition there are some additional location factors that a location analysis for a manufacturing businesses must look at:
Depending on the number of location factors and location choices the evaluation of a location can be a process that costs a lot of effort. However, despite of the fact that it is very time-consuming: a location analysis must be handled very thoroughly, because incorrect evaluation results may lead to choosing the wrong location. – which has the potential ability to doom a business before it has even really opened its doors. Therefore it is of crucial importance for the future success of your business to be mindful when selecting the relevant location factors and evaluate accurate and valuable data only.