9 Factors That’ll Help You Choose The Right Business Location

One of the biggest headaches an entrepreneur faces is choosing the right business location. This is one step that most entrepreneurs approach with a pinch of salt and if you are a small business startup it becomes even more challenging. A good business location not only helps you reduce your expenditure but also is critical to your business success and sales as it many times makes or breaks your company.

While many prefer to settle for a cheap location as they don’t believe location is that important as long as you provide the right product, others say even if your product is good, it will not help if you are selling it at the wrong location.

Here are 9 factors that every entrepreneur must consider when selecting a perfect business location:

1) Demographics

When selecting a business location, demographics plays a crucial role in your product as it can have a big influence on your choice of business location.

You always need to keep in mind the type of product or service your business offers and the status of the customers when it comes to business location.

For example, if your business is based on selling school supplies, your demographic research for the right business location should keep in mind that it is within a school’s vicinity or university/college area.

Majority of your customers would be students or teachers, and your best bet for having high sales would be a location which is either close to student hostel, or within the university/school itself.

2) Style of Operation (+ Psychographics)

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When looking for the right business location, always ask yourself if your operation is going to be formal and elegant in nature or if your business would be kicked-back and casual in its working?

This mindset of your work should be consistent with your business location as it will help with your particular style and image of the business.

For example if your business is based on high-end fashion, your business location would be on or near Downtown or High Street area where people who can afford it visit, if you start such store in an area full of college student or university, even though they would be really interested, they would not have a budget or money to buy your product.

Similarly, if your fashion apparel is targeting college students and you build your store on Downtown or High street area your rent would be high and visitors too high profile to even consider buying your products.

The reason I also add psychographics to this point is that the mindset of your customers or the aura of a particular region would also play a huge factor in such situation when you consider your business location.

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3) Nearness to Market and Foot Traffic

Along with psychographics you also need to keep in mind your business location’s nearness to market and foot traffic.

For any retail businesses, foot traffic is extremely important as you don’t want to be tucked away in a corner where shoppers are likely to pass you and your store.

Similarly, even online your business needs to be located in a high-traffic area.

Not every location or site is right for your business and thus needs to researched well. For example things bought in bulk will sell on IndiaMart better than on sites like Amazon, similarly, things bought in less quantity would sell on Amazon better than on IndiaMart where they might cost much higher as storage cost might make the cost go higher.

Also, ask yourself, are your customers’ resellers or end users? Answering this question will help you determine the best area to locate your business.

4) Accessibility and Basic Infrastructure

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When you consider the accessibility of your business location, it should keep everything in mind and not just the customers.

Your business location should easily be accessible to customers, employees, and even your suppliers.

Your business infrastructure is equally important, for example, if your business is on a busy street with easy to access via cars and trunks, it can help to a great extent. You also need to keep in mind if you have a parking lot where your customers and suppliers can park.

Just being on a busy street would not help as your customer would not prefer to drive all the way to your business and then park a kilometre away.

5) Competition

Always keep in mind that you are not the only one in that business and would always have competition in one form or other.

Similarly, other businesses will also keep the above-mentioned points in mind when looking for their perfect business location.

Thus, don’t just select a location because it fits with regards to your customers, but also keep in mind your competitions.

Always check competing companies located nearby and how popular they are. You can always catch the overflow from the existing business but do check why they exist and if they will affect your business.

Also, note that a nearby competitor is only going to make your marketing job tougher so look elsewhere if the possibility exists.

6) Zoning/Permit Issues

Every country and every area is zoned for certain things and when looking for a business location you need to keep the zoning and permit issues in mind as well.

A certain area or zone might be perfect from all the above-mentioned point of view but not possible from permit prospective.

You don’t want to get everything sorted only squared away and then discover that the area isn’t zoned for your business type. So always check with your local zoning authorities to make sure that you’ll be able to do business in the location of your preference before signing any other contract.

7) Proximity to other Businesses & Services

While it’s important to scout for competition, it’s also important to scout for other businesses and services in the proximity of your selected business location.

Take a look at what other businesses and services are providing in the area of your choice as it might help boost your business.

Further, see if you can benefit from nearby businesses by the customer traffic they generate. For example, if you are running a 24/7 food joint in an area which is close to a stadium or a club or a pub, then even at night you will have many customers coming in as they would be looking for a cheaper option.

Similarly, you can collaborate with such places to provide the customers discount coupons to your business when they buy a certain thing at these clubs, pus or stadiums, this will further direct traffic to your business.

8) Image and History of the Site

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While it might not seem as important as image or history of a certain area might also affect your business traffic. While demographics in the area might suite to your liking, there might be other unknown facts that might work against you.

Always ask about previous tenants and if people who provided similar business have been in the area.

For example, if you’re opening a restaurant where five restaurants have already started and failed, you may be starting off with an insurmountable handicap as many might assume its the same restaurant or think you might suffer the same fate.

While there might be many more reasons why the previous businesses failed, your customers might know it and think something is wrong with the area and that you will go the same way as the previous tenants did.

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9) Utilities and other Costs

When you consider a business location, you always need to keep in mind your budget and your profit margin.

You cannot spend high on rent, which will take away a major portion of your earning, and not consider the cost of other utilities while considering your business location.

If they’re not included, ask the utility company for a summary of the previous year’s usage and billing for the site as it will provide you with an idea of how much it will cost you.

The above will also help you develop an accurate move-in budget as compared to moving in blind with regards to utility costs.

How to Get Desired Business Location with myHQ?

Without really possessing an office location, virtual offices give firms their own corporate addresses for communication and online interactions. This utility is teeming with everything you need to start a registered business in India or apply for GST, and it costs a fraction of what you would pay for a typical office space—which your company might not need right now.

myHQ has virtual offices in all the main cities of India and guarantees the lowest price. We also have the fastest document turnaround, as we ensure that your documentation is completed within 3 days. Book your desired business location through the website or fill in your information and we will do it for you.

FAQs on the Right Business Location

What is the right location for business? 

When it comes to choosing the right location for your business it is important to look at demographics. Look for locations where your goods or services are in high demand or where there is little to no competition.

Why is it so important to choose the right location for my business? 

Location selection has always been crucial for businesses. The greatest employees are hard to find and keep, and many are quite particular about where they work in order to achieve the ideal work-life balance. A company’s performance over the long run can be considerably improved by wise location choices.

Does location really matter in business? 

Location can turn away customers. It will be tough for you to attract any business from potential customers if they find your location to be challenging to locate. 


Remember, the right business location is as crucial as the business facility that you provide and require you to devote as much time as you can to find the perfect spot.

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