Location, Location, Location

A good location can make the difference between a profitable and a bankrupt business. There are many questions to consider when choosing a business site. Use the questions below as a checklist for potential locations and then compare several sites:

• Are there parking facilities?

• Is transportation available and convenient?

• Is the quality of police and fire service adequate?

• Will it be a quality site for the future—five, ten, twenty five years from now?

• Is nearby housing readily available for management and employees?

• What is the general business climate in the area? Is this a prosperous market?

• Are merchandise and raw materials available? Are your suppliers easily accessible?

• How is the traffic flow—can your customers reach you quickly and inexpensively?

• Is your building suitable to your kind of business—will it need any major renovations?

• Is there an adequate community infrastructure for utilities (sewer, water, power, gas, etc.)?

• What is the tax burden—town, city, county, state? Will this impede your business and growth?

• What are the costs of operation in this location—will it be too high to offer you an adequate profit?

• Is there nearby competition? Are those sites better or worse than yours?

Why is competition mentioned in the last bullet point? Because no business operates without direct competition. There may also be indirect competition, which has a significant impact on customer’s buying decisions in your market. Direct and non-direct competitors try to convince customers to buy their products or services instead of yours. It is in your best interest to learn more about the companies that are trying to reduce your take-home pay. List the strengths and weaknesses of each competitor. Talk with friends, visit your competition, call for information about their products and analyze how they advertise. Next, take a sheet of paper and list the major competitors. Give each a rating, on a scale of one to 10, for product quality, process, advertising, price and customer satisfaction. You can add other ratings that you feel are important. Your business can become more profitable by adopting practices you admire in competitor operations and by avoiding their mistakes. Some of your competitors have been in business successfully for many years. Certainly, as a new or relatively new business, you can learn a lot from them.