Over 600,000 new businesses open every year in the U.S. They employ nearly half of the country’s workforce. So, if you have a dream of owning your own small business, you’re clearly not alone.
But, there are several factors to consider when you’re trying to get things going. Most small business owners understand they have to think about funding, marketing, hiring, and their target audience. But, you could be overlooking something just as important – location.
You might automatically think you should launch your small business in your local community to boost its economy. In some cases, that will be your best option. However, this isn’t always the case.
Consider, instead, where your business would truly add value. Is a business like yours needed in your community, or would it be better suited somewhere else?
Other factors to consider include the price of rent and taxes, foot traffic, and the demand for your particular goods or services.
With that in mind, let’s take a closer look at the importance of location so you can feel more confident in where you should open your business.
City vs. Small Town: Which Environment is Right for You?
It’s easy to assume that a big city with a lot of foot traffic would be the way to go if you have a storefront. Bigger cities indeed have more people. That means more opportunities to turn passers-by into customers. But, living in a larger city has its drawbacks that could cut into your profits. Some of the potential “cons” include:
- High rent costs
- Higher insurance
- Overall higher cost of living
- Low security
If you set up your business in a smaller city or town, you’ll enjoy things like low rent, great views, and a strong sense of community. There may not be as many people, but the people who do become your customers will actually get to know you and become loyal to your business. It’s more likely that your advertising will run on “word of mouth” in a small town, which can end up saving you even more money.
If you do want to set up your business in a small town, make sure you have a solid business plan and make sure you’re selling a story and experience. You’ll want your business to stand out so people take notice and start to trust you.
Who Is Your Audience?
A city with a lot of people is bound to have a broader audience. But, a small town or mid-level city might have more people who directly want/need what your brand is offering.
When you’re looking at different locations, think about the people who live there. Is there a market of people who want what you have? One way to find out is to do your research on competitors in those areas. How are they performing? Do you offer something different that will entice more customers to come to you?
You can also look at an area’s overall economic health and growth. What is the job market like? Is the real estate market growing? Looking into the people who live there is also important. Is the area made up of mostly families or single people? How old are they? The more gaps you can fill in, the better.
By allowing yourself to get a bigger picture of an area you’re interested in, you’ll learn more about the people who live there. As a result, you can determine whether your innovative business idea is a solution those people need, or if you should keep looking for a better spot to land.
Are You Ready to Make a Change?
In the end, your decision on where to start your business needs to be a personal one. Utilizing data, theories, and statistics is a great way to figure out where your business might be most successful.
But, if you’re not happy in a different location, you won’t have the motivation and drive for your brand to move forward.
To open your business where it needs to be, you might have to move to a different state. Think about whether you’re truly ready for that and how it will affect your standard of living, your relationships, and your family. If you do have to move and you’re ready to take that step, make it easier for yourself with the following tips:
- Set a budget
- Have a home set up before you go
- Prepare your family (including kids and pets)
- Hiring a moving company
- Check into getting a new driver’s license and insurance
- Turn on your utilities at your new home
There may not be one “ideal” location for your business. But, if you’re willing to look at the numbers and launch a new business where it makes the most sense, you can be more successful from the start. Keep these ideas in mind as you get ready to move forward, and decide if you’re ready to commit to a specific location.