Starting a new business isn’t something that happens overnight. Building not only a business, but a successful business takes an awfully large amount of careful consideration. Everything must be meticulously planned from top to bottom.
I’ve already written in the past about some great tools to get your new business started, but before you’re tracking conversion rates or traffic sources or anything else, you’ll need to determine where your business will be located.
Both broad location details like the area of the world your business will be headquartered in as well as extremely specific details, such as the history and background of the area are important facets to consider.
The State at Large
Where better a place to start than looking at the state as a whole? Every year, Forbes Magazine releases a list of all 50 states, ranking them from the best for business to the worst. Certain trends emerge each year, and many states who sit at the bottom tend to stay around the bottom, and vice versa. Various factors like general economic climate, job and employee availability and environmental regulations all factor into the rankings, making them worth a quick examination when you’re building a business.
Most demographic data is readily available by visiting a location’s local government website. The amount of weight to put into demographic data will depend entirely on your industry and what types of consumer you’re trying to reach. Many businesses will target entirely different sets of consumers–for instance, a high end retail store in a lower-economic based area might not perform well.
Similarly, you have to consider the people you’ll likely be hiring to work for you. The talent pools in different cities can differ drastically, and should be thoroughly considered if your business is one that depends on its employees.
Have you ever driven by a four way intersection and noticed that there’s a different gas station on each corner? Competition is great for consumers as it often lowers prices, but more competition for business means a smaller, less dedicated base of consumers.
Determine which camp you fall into–if you expect a lot of customers to compare prices and services before they buy, locating yourself near competitors could be beneficial. Otherwise, opening a mom and pop coffee chain next to a Starbucks could hurt your overall business, even if your coffee is better and cheaper.
History and Local Businesses
Do some research on the history of the area and the businesses that exist now and in the past in the area you’re considering. Far too often do new supermarkets open in the same building in which four supermarkets have come and gone. If other businesses of the same of similar natures have failed in that same spot, what can or will you be doing differently to buck that trend? Chances are, you won’t–the building is likely the wrong size, located in the wrong market, or otherwise destined for failure. Scout other businesses in the area as well to see how they might influence your own new venture.