Passion, drive, a desire to fill a need. Wanting to be your own boss, freedom to be creative, and a natural instinct towards entrepreneurship. Cash flow projections, business plans, and financing. All things needed to start, run, and grow a successful business.
But no matter how much of a fire you may have in your belly, or how much time you have spent preparing for the launch of your venture, choosing the wrong location can ruin your chances of survival.
One mistake that many new business owners make is choosing a location based on what is convenient for them, rather than a location that has the necessary components for success. Here are five key things to consider when choosing the right location for your business.
Unless you plan to be a one-person show, you are going to need to hire people. Who is your ideal employee? Where do they live? Is there enough talent to choose from in the desired area?
Whatever the product or service is that you are selling, it certainly needs to match the people in the area that will use your services. When you look at demographics data, you get a breakdown by age, gender, education level, income level, career, home cost, etc… and these numbers are compared to national averages. Does it match your target market?
Demographics are all well and good, but culture matters more. This can be tricky because, unlike demographics which are just numbers and data, culture is something you need to experience to fully understand. This is easier when you have spent time in that area, and difficult if you are trying to guess what a town culture is like as an outsider.
For example, maybe you want to open a fitness center with equipment, classes and personal training services. But if you live in an area where most people enjoy the outdoors, it may not be a good fit. They’d rather be hiking or biking in the great open air than inside a gym.
You may think this is a no-brainer, but you’d be surprised at how many times people had said to me when I was in the health & fitness industry, “Hey, there’s no fitness business in XYZ town, you should open there!”. My response to that was, there may be a good reason why no one has opened in that town. Sometimes having competition is a good sign that your business may do well in that area.
And just because there is competition, doesn’t mean your businesses are the same. Carve out your own niche and find what makes your business unique. Better yet, it’s not a bad idea to see how you can compliment your competition and even work together to bring in more business for both of you.
Many of us come up with great ideas. I love generating ideas, especially when I’m frustrated that something is lacking in my life (like a lunchbox that can simultaneously keep half of my children’s lunch cold, and the other half hot.)
But despite our passions and great ideas, there must be a need in that location. Make sure the people in the community will want what you have to offer them.
In the end, considering all of these factors is really about understanding your target market and ensuring that your business and location not only match them, but also match you. Because if it isn’t you, you won’t be passionate, and your business will surely fail.
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