Guide to Picking a Location for Your Business

Business legend has it that if you build it, they will come. Building it, however, requires time and capital – and there's no guarantee that anyone will ever come. That's why smart business owners seeking a new or startup location study up on a subject they probably haven't touched since seventh grade: geography.

Your business location can make or break you, whether you own a restaurant, a retail shop or even a service business. Your company's image, your dependence on commuter or foot traffic and your budget all play a role in finding the best spot for your business. Finding the right location can:

1. Drive customer traffic
2. Attract employees
3. Increase credibility
4. Make you more competitive

Action Steps
The best contacts and resources to help you get it done

Choose a business friendly city

Starting a business in your own community might seem like an obvious choice, but before you commit to a location ask yourself if you're willing to relocate. Income and sales taxes vary among cities and states, as do rents, wages and utilities.

I recommend: MapInfo.com, which specializes in site selection tools for retail stores and restaurants, offers a variety of site location tools, including online reports that provide demographic and market analysis for a specific city or Zip code. For a list of Hot Cities for Entrepreneurs, visit Entrepreneur.com.

Consider convenience

A great location is convenient both for you — it includes a hassle-free commute — and for your customers — it's easy to find, with ample parking and street visibility. Keep in mind your customers' commuting habits — if you have a donut shop, you may want to choose the side of the street that carries morning inbound commuter traffic. Restaurants that focus on dinner may fare better by locating on the side of the street that carries evening commuter traffic.

I recommend: Research local commute times and traffic with Yahoo! Maps, Driving Directions, and Traffic to make sure your business is easy to get to.

Love thy neighbor

Consider surrounding businesses. Setting up shop near businesses that cater to the same clientele allows you to draw from their customer base. The best location can actually be down the street from your biggest competitor.

I recommend: Research businesses in your area by contacting your local chamber of commerce. Or employ the services of GeoMarketing Research, a business location research firm whose services include a competitor location analysis.

Locate near your customers

A good location is worthless without customers to populate it. Examine your area's demographics — things like age, gender and income — to determine if your chosen locale is the right place to reach your chosen customers.

I recommend: For a monthly fee or annual subscription, you can access demographic reports and maps from Claritas, which also offers site location reports, site location maps and site location analysis software among other site location resources. FreeDemographics.com lets you create customized market analysis reports for any geographic area.

Consider your operational requirements

One of the first things to consider when searching for a location is the type of facility you need: office space, retail space, industrial space or restaurant space, for instance. Keep in mind any special requirements you have. Do you need kitchen facilities, meeting rooms, special communications wiring or high-energy consumption capabilities?

I recommend: OfficeSpaceSearchUSA.com lets you search for various types of commercial space and has an office space calculator to help you determine what you need.

Estimate costs

Keep your budget top of mind. Ask the landlord if you'll be required to contribute to maintenance, property taxes or building insurance. Keep in mind the effect your rent will have on your products — will higher rent, for instance, translate into higher prices?

I recommend: Use the cost-comparison calculator at OfficeFinder.com to get an idea of your costs. Or go online to compare lease rates for available retail, office or industrial space at BizSpace.com or LoopNet.com.

Seal the deal

Once you've found your sweet spot, you'll need to sign an equally sweet lease on it. Bring your attorney to the table to help you negotiate a lease that is fair and equitable.

I recommend: Review a standard commercial lease agreement online courtesy of AllLaw.com.

Recruit a real estate partner

It's a good idea to hire a real estate professional who understands small business needs. Working with a realtor who understands your industry and your target customers is even better.

I recommend: Start your search for a reliable real estate professional with either the Society of Industrial and Office REALTORS® or the CCIM Institute.

Tips & Tactics
Helpful advice for making the most of this Guide

• Make sure you set up shop in an area where you have access to the type of labor you require. For instance, if you run a technology firm, consider locating in an area with other high-tech businesses so you can tap into a qualified labor pool.
• It's important to choose not only a profitable location, but a safe one, too. Before committing to a space, research the neighborhood to make sure it's well-lit and well-trafficked.
• Check with your insurance provider regarding coverage for your new location.
• Be aware of your space requirements. Hotels, restaurants, retailers, manufacturers and offices all require different things from their properties.