The right business location is important for you as an entrepreneur. Location determines how you will be found and how often you will be visited. What then should you consider when deciding where to locate your business?
For most entrepreneurs choosing a business location is pretty straightforward. It goes something like, “I live here ergo my business should be near here.” It’s not faulty by itself but to reap the full gains of your business you have to strike the thinking pose a bit.
For a business location the checklist has 5 things to tick off; primarily.
1. Accessibility
Let’s be honest, the only businesses we climb staircases for are cinemas. This is important because I have seen a retailer located on the top floors of a building in Nairobi CBD. Your business has to be located in a place convenient to your type of customers. You should mark the word convenient because even if it’s accessible but customers think it’s too much effort to get there they won’t come. Also factor in the kind of customers you serve. That’s how malls get away with being located by the highway.
2. Competition
There is no aspect of starting a business where you will not compare to competition. It’s no different with a business location. On one hand, placing your business near competition is great. You enjoy the benefits of concentration. You can see this with food courts at the mall, CBD stalls and Jua Kali works. On the contrary, there are occasions where your business will succeed more by pioneering or grabbing a slice of the market for itself.
3. Operating expenses
Don’t just consider revenue when deciding on location. You have to have costs in your mind as well. If you get a good location but operating expenses eat up your revenue the business will fail. How much does your business model relate to the cost of renting or leasing? A low profit margin business is not going to locate in a high rent locale. You are also going to consider the cost of supplying to location and logistics of availing your product to the market. If it’s too expensive just forgo that location.
4. Locality
No, this isn’t wordplay. It is related to the previous point though. The place your business is located should represent the image you want your brand to portray. This is very similar to how billboard displays, on different roads in Nairobi, showcase different stuff to different markets. Consider security and convenience to your employees as well. Lastly, it will not hurt to have complementary businesses around.
5. Government
The obvious thing here is taking advantage of Government tax incentives; as is the case with Export Processing Zones (EPZs). You can also compare the rates of municipalities in your environ to see if there’s something you can gain. Another critical thing to consider is zoning laws. Yes, they are not followed but pretty soon the Government’s hand will be forced. You do not want your business premises demarcated for demolition. And please check if that area is part of the road reserve!