Location and Starting a Business

Things to Consider When Choosing a Business Location

Written by Chukwuma Asala for Gaebler Ventures

Why is location important? What factors influence where businesses decide to start? This article will provide answers on what to look for in a location when you start your business.

Most people in business have heard the famous saying "The three most important things to consider in real estate are location, location, and location."

Things to Consider When Choosing a Business Location

The exact same concept applies directly to business. To push the point even further, a lot of your success, quite frankly, will depend on the strategic placement and location of your business. Location plays a role in building the brand equity of your company as well as influencing how visible your company is; granted you are targeting the right market. Let's take a closer look at some of the things to consider when choosing a location for your business.

Demographic of your customers

Depending on the type of business you have the demographic of your customers will be very important. Things like socio-economic status, income levels, age, gender, etc. These are all very important to consider when deciding on the location of your business because in order for certain demographics to be targeted you must first know what parts of the country they tend to settle in mostly. For example, you probably wouldn't put a fancy upscale restaurant in the middle of a small town with a lot of blue collar workers because they just don't spend their money on expensive restaurants. A diner would be a better niche market to start for that type of demographic.

What about your competition?

You can learn a lot from studying what your competition is doing. Most people fear that setting up a business in the same location as another business with a similar niche is not a good business decision but in reality could be the best thing you could do. Ever wonder why you see so many franchise chains right next to each other? Or you find many fancy restaurants on the same strip of real estate? They place themselves next to each other because they do not really compete. If you're not sure where the most ideal location should be for your business just look at your competition and trust that they have figured out where the niche market for your product or services is.


When the owner of McDonalds Corporation Ray Kroc was asked how he got into the hamburger business he responded to the surprise of the interviewer that he was not in the hamburger selling business but in the real estate business. Where you place your business has a cost-benefit associated with it. It is important you figure this out early. Just because a certain plot of real estate is expensive because it is a prime location for business does not necessarily mean it will be a prime location for your business.

Chukwuma Asala is an international student from Nigeria who is studying to earn an MBA from the State University of New York in Albany. He has analyzed more than 20 industry case studies throughout his education thus far, and hopes to bring some of his business knowledge to Gaebler.com.

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