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 solely 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 those types of people 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.
For example, when I was planning to open a women’s health and fitness center, my average client was between the ages of 28 and 55, college-educated, and average or above average income level. Choosing a college town may not have been a good fit for my business model.
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.
Again using my own business as an example, at the time, I was living in a town that had no decent fitness facility anywhere. It also had some great demographics (highly educated, high income levels, high population of women), however the culture was not a good fit for my business model. It is a town with a strong focus on nature and the outdoors. The idea of an indoor fitness facility is not necessarily appealing to those who live there. They would rather be outdoors on a bike or hiking than in a TRX class.
You may think this is a no-brainer, but you’d be surprised at how many times people have said to me “Hey, there’s no fitness business in XYZ town, you should open there!”. My response to that is 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. I’ve been to many towns full of gyms, but they are all similar to one another and don’t offer the same services that mine would have offered. Carve out your own niche and find what makes you unique. 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. 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.