If you’re looking to start a business with a physical branch or store, it’s imperative to consider the surrounding areas when choosing a location. Most business owners look to their local area, and it’s easy to see why. They know the city or town, they probably have connections they can tap into, and it causes the least amount of disruption to their personal life. But very rarely is your hometown the perfect place to start a business. Throughout this article, we’ll look at four of the main factors that should be influencing your decision when determining where to plant a startup.
Infrastructure
The infrastructure of an area will massively impact footfall. And if you’re trying to attract customers to a physical location, then this will have a huge impact on the overall success of your business. For instance, starting up in an area with low footfall has been the death of many hospitality ventures.
When analysing infrastructure though, don’t just assume that a major city equals great accessibility. Carry out research into things like public transport and city centre car parks; being located close to a car park in London, for example, will make it much easier for potential customers to visit your location.
Talent Pool
Businesses need talent, and the success of most businesses is dependent on the people working for the business. Unless you’re a team of one, you’ll need to consider how easy it will be to hire new employees and also how skilled these employees are likely to be.
Being located in an area with a renowned university is a great way to tap into large pools of young talent. There are more than 40 universities in London, which is quite impressive considering it has a lower population than many other capital cities.
It’s also important to consider retention rates. Many young people choose to follow the digital nomad lifestyle, where they bounce from one location to the next. So while it may be cheaper to start a business in nations like Bali and Thailand, workers there are often travelling and only seeking short-term opportunities.
Policies & Support
The vast majority of startups need support, and often this comes in the form of financial support. Before putting a pin in a map, consider what financial support will be available to you from local governments and councils. Not only this, but do policies support new businesses? Are startups encouraged or deterred? Not all parts of the world are equally supportive of new businesses.
On this topic, you may also want to consider whether you will be able to access private investment in a certain part of the world. While more affluent areas are more expensive in terms of operating costs, it often means you’ll be able to access more high-net-worth individuals who may be looking for investment opportunities.
Logistics
It may not sound like the most important factor, but don’t discount logistics when deciding on a location to start a business. This is especially important if you’re selling overseas. Consider time zones, do they align with your customers and suppliers? This could slow down operations if not. Consider how your location will impact shipping and delivery costs, too. Customers won’t want to foot the bill if you choose to set up on the other side of the world to them!
