Whether you’re an established business searching for a new HQ or are a brand new startup looking to find your feet, the most important thing to remember is location, location, location.
You could have the most unique idea or well-polished business plan, but if you don’t find a location that fits your business model, you’re limiting your potential for success.
‘Serial entrepreneur’ Scott Gallaway has reviewed how location has the world’s four largest tech companies, Amazon, Apple, Google and Facebook. Gallaway suggests that all these companies being founded in San Francisco and Silicon Valley are more than just coincidence – the proximity to some of the best engineering universities in the world has allowed each business to flourish.
But it’s not just household names that can benefit from where they’re based, all businesses need to take into consideration the pros and cons of their location. Below we take a look at the benefits of setting up shop in both big cities and smaller towns and what businesses need to think about when looking for new premises.
The benefits of a city-centre location are obvious: greater population, higher levels of tourism and dedicated business regions such as Manchester’s Media City and the East London Tech City, desirability for the workforce, deeper talent pools and better networking opportunities.
Working in smaller towns simply doesn’t offer networking on the same scale, meaning a significant amount of travel would be needed to experience what city-centre business have on their doorstep.
And with an increase in digitisation and online businesses, footfall isn’t often taken into consideration as much as it once was. But, for certain industries, it can make or break a company. Retail and hospitality industries thrive on a high footfall and choosing a city-centre location promises a constant stream of potential customers that smaller towns can’t compete with.
Steering away from major cities is a popular choice with startups and first-time business owners, as generally, business parks and industrial estates require significantly lower funding and can often provide a niche service to areas that would otherwise need to travel.
The best reason for choosing a small-town location will be lower costs across the board, from business rates to wages are. And business parks often share the cost of communal services such as security, parking and office cleaning.
There is also less competition and what networking you do manage tends to result in real connections. Towns are known for their strong sense of community spirit, which gives businesses the chance to capitalise in local areas.
And, of course, travel is easier without the morning rush hour and “extortionate” parking fees to contend with. Not only do most firms offer on-site parking, offices are normally located within a convenient distance from rail and bus stations.
John Waddicker from Positive Commercial Finance an award-winning financial broker for businesses says “Finding the right location can make or break your business venture. “Each business has different targets to meet, so choosing the wrong location can seriously harm business growth.”
“Make sure you do your research and come up with an in-depth strategy to find the perfect location. It’s also important to remember that no two businesses are the same – what worked for one company might not be right for you. Whether you want to put down roots in a bustling city or the close-knit community of a smaller town, make your decision based on what gives your business the best chance at success.”
So what are the key things to consider when choosing a business’ location? Here are five for starters:
- Accessibility – It’s not just your staff that need to reach your business, your customers do too. If you’re hard to find and rely on a high footfall, you’re limiting your potential to grow. Suppliers are another thing to think about, as businesses that require frequent deliveries need to make sure they’re easily accessible.
- Competition- Gauging the competition in the area is an interesting one, as it’s not necessarily a bad thing to be located near competitors. Restaurants and car dealerships regularly operate in close proximity of similar businesses, as they give customers the chance to compare before purchasing.
If there is too much competition in an area, consider relocating to a more suitable location. On the other hand, if your business offers a new spin on a popular market and you’re confident you can out-perform established companies, choosing to set up shop near competitors is a good way to quickly pick up customers and create a presence.
- Research all costs – You wouldn’t move into a home that you couldn’t afford, so why would you move your business into a building you can’t afford? It’s crucial to make sure you thoroughly research everything that you’ll need to pay to operate in your location of choice. That includes the big costs like rent and business rates, but also smaller, easy to forget fees like whether you and your staff need to pay for parking or if the premises needs a deposit.
- Skill base in the area – Finding the right talent is a must, and your location plays a big part in this. Depending on your industry, choosing between a major city and smaller town can have an impact in attracting the right people, but choosing whichcity or town can be just as crucial. East London, for example, is an excellent place to launch a tech startup, whereas Sheffield in the manufacturing capital of the UK.
- Potential for growth – Even if you find a location that ticks all other boxes, have you considered business growth? As any other business leader, you’ll want your company to do as well as possible, which means expansion could be a real possibility.