When you are starting up a new business, you must decide on where to locate its head office and/or production premises. There are a number of factors to consider when choosing the ideal location. Geographical Area Do you want to operate from your own town or city? Is this feasible? The best location for your business will depend on the type of business you are operating – is it a retail outlet, an office based company, a factory/warehouse or service supplier?
- Retail businesses must be conspicuous and in an area of high footfall, eg a shopping mall, high street or out of town retail park.
- Office based businesses can be located virtually anywhere. However, depending on the size, you may choose to either work from a home office or rent suitable office space in a small industrial unit. Factories and warehouses are usually mainly situated in industrial areas.
Regular outgoing costs Wherever you choose to locate your business, the rent and rates must be taken into consideration. These can work out very expensive, so look around at suitable areas and get. Dedicated industrial sites can be cheaper than town or city locations, but will vary significantly from county to county. Shops in high streets and shopping malls will incur high running costs such as rent, rates and utility charges. Convenience Another thing to take into consideration is convenience for both your customers and staff. Out of town industrial estates can be difficult to get to by public transport for your staff and the footfall will be virtually nil as most visitors will be targeting specific goods or services and will tend to go straight there and leave immediately after they have done their business. Also, there may not be any food and drink outlets for staff lunches. The upside is there will usually be plenty of parking spaces. Shopping malls and high street locations will be more convenient for staff and attracting potential customers. Depending on the type of business you have, you must make your decision based on what kind of location is beneficial for it, your staff and customers. Does the location suit your business? When you set up a company, think about what you need from your business premises. For instance, if you are operating a fast food outlet, you will need an area of high footfall or have a highly visible presence and parking facilities on a main road. Also, it is beneficial financially to rent space which has the right facilities. Again, a fast food outlet will obviously need cooking equipment and tables/chairs to seat your eat-in customers. This can be extremely expensive to set up, so look for vacant premises with these types of facilities provided. However, do ask yourself why the last tenant closed down! Final Decision When you have sourced a number of potential locations for your business, ask yourself the following questions:
- Is it affordable? What are the pros and cons in relation to convenience for your staff and customers, eg free parking, a safe and well lit nearby car park? Will you need to increase your prices to offset your outgoings?
- A high visibility retail unit will be ideal for both potential customers and staff as there will be plenty of food and drink options, but will the transport and parking charges be excessive?
- Will your business address impact on its image? A small office located among large industrial units can deter clients, especially if your business is aimed at the high end of the market.
- When looking for office space, consider your business’s requirements, eg occasional meeting and event space. Is it worth paying for space you only require occasionally? You could look into the option of a shared office suite.
- Is your business service based, eg plumbing, roofing, internet sales? If so, the location is largely irrelevant to all but your staff, as you have little contact with the general public. A less expensive location will allow you to pass on savings to your customers or increase your staff salaries or profit margins.
- Are you planning a retail clothing business? If so, you should locate your business near to other similar shops. Customers tend to visit several similar shops when shopping for clothes.
- Is your business going to be power hungry? Ensure that there are sufficient electrical sockets provided. Telephone, Broadband and similar high speed internet connections will be essential, so check these out before signing an agreement.
- Is the location near competitor or complementary businesses? Which is best for you?
Spending some time looking around and taking the above into consideration before setting up you company formation should result in you renting or buying in the ideal location for your particular business. This will provide the best chance of success. Author Bio This post was brought to you by company formations 247. They specialise company formation and business registration services.