Location and Starting a Business
Choosing the Right Location for Business
Written by Samuel Muriithi for Gaebler Ventures
Location is touted as being the most important ingredient required in starting a successful business. This may certainly not apply to all types of business but for some there is nothing more important. What are the aspects an entrepreneur needs to consider in terms of a prospective business location?
Wherever applicable an entrepreneur is well advised to have the business location in his/her own community, and for good reason.
He or she will be working in a familiar area. In this area chances are that the initial customer base will be drawn from the friends and acquaintances known to the entrepreneur. Apart from the customers, such a business location will most probably have a good number of professionals including bankers, accountants and attorneys who'll be instrumental in supporting the green business.
What are the various business location possibilities that can be considered?
Although downtown shopping districts are no longer the choicest of business locations as they were in the past, they still have lots of practical advantages to offer. The costs of doing business here are lower because renting the older buildings is cheaper. Lower operating expenses are incurred considering that operating hours are much less. However, such areas are often known for parking space limitations and low daytime shopping activity.
There are four types of shopping centres that can be considered in choosing a business location. Neighborhood shopping centres normally feature a supermarket and small convenience goods stores. Commercial activity is mostly dependent on the area's population. Rent rates are usually quite reasonable.
Community shopping centres serve the residents of multiple neighborhoods and the rent costs tend to be higher. These usually feature one or two anchor stores, i.e. major tenants in the form of large discount stores, supermarkets or even drug stores, in addition to twenty or so smaller shops. The heavy advertising of the anchor stores draws shoppers to the smaller shops albeit indirectly.
Regional shopping centres are bigger and serve shoppers from multiple communities or a region. They are usually in the form of malls and the rent costs are quite expensive. As such the prices of items sold are set high to earn higher profit margins or markups. This is quite impractical for convenience goods and therefore such business locations are ordinarily best for stores that deal in specialty goods.
Super regional shopping centres are even larger and more detailed in terms of features. They have close to 1000 stores and rent rates are very expensive. As such, they are unadvisable as business location possibilities for startups.
Working from home is an option that has gained much popularity in recent times. They are the perfect business location option for an entrepreneur who fancies working around the clock. These locations don't involve the conventional expenses of utilities and rent or the restrictions brought about by lease agreements.
Professional office spaces are the ideal business location possibilities to consider for some types of entrepreneurs for whom cutting a professional image is of essence to the business. This applies to lawyers, architects, business consultants, accountants etc. Choosing a business location of this type depends on factors like the location, dimensions, services offered and the lease expenses. Such office spaces may be located in stand-alone buildings or even in skyscrapers.
Samuel Muriithi is a business owner in Nairobi, Kenya. He has extensive international business experience in the United States and India.
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