Location! Location! Location!

From the SBDC Vault

By Michele M. Miller
SBDC Director

Last month we discussed ways to plan for your businesses financial future. This month our topic is location.

At the Small Business Development Center of Northwest Illinois (SBDC) we believe the top five reasons for business failure are:

1. Poor planning or poor preparation. Lack of a well-written business plan.
2. No working capital (money)
3. Poor choice of locations
4. Not understanding your market (customer needs)
5. No marketing (let people know you are here)

Location, location, location! We have heard this popular cliché for years. But how important is the location of your business really?

As our population ages we find out needs change. Consumers who five years ago thought nothing of parking at the end of the lot change their minds when handling children or when there are health concerns. Maneuvering through traffic jams will make you think twice about stopping at your favorite store at the end of the day. The price of gasoline is a concern for all. Those with disabilities need easy access to parking, entryways, and negotiable pathways. Can your business successfully satisfy all these customers’ needs in your current location?

According to the Small Business Administration this is the question you should be asking yourself about your potential or current business location:

When selecting the general area:

• Is the site located near potential customers?
• Where is the competition?
• How long have the competitors been in this area, and how strong are they?
• Are there potential employees nearby?
• Is the area convenient for you?
• Is the location convenient and accessible to traffic? Near public transportation? Accessible by pedestrians?
• What are the occupancy rates in the area?
• What is the business climate in the area?
• Is the area growing or declining?
• What are market rents for the type of space desired?
• What services does the town or city provide?
• Are there zoning regulations or signage restrictions that will affect your business?
• How safe is the area?
• Are there adequate support services nearby, such as suppliers, printers, distribution centers, etc.?
• Are there conveniences for you and your staff, such as restaurants, cleaners, shops, etc.?



Once you've narrowed down the area, evaluate the location:

• Is there adequate parking for employees, customers, delivery vehicles?
• Will you have to pay extra for parking?
• Is the rent affordable?
• Is there room for expansion?
• Can you get insurance at a reasonable cost at this location?
• Are there any building or health codes that would affect your business?
• Are there adequate storage facilities on site?
• Will you be able to have good visibility? Signage?
• Will people be able to find you?
• Does the building or location have the amenities that you need?
• Have you considered your finish out requirements?
• Does the location have adequate wiring, including for voice and data communications?

Finally, once you narrow your selection down to 1 or 2 locations.
This is wonderful information. But it is still a tough decision on how much space you will need so how do you handle this overwhelming task?

For business start-ups: Before you lease, rent, or purchase a location, do your homework. We have already discussed the importance of your business plan. Now it is time to do the best thing you could do for your business: Draw out the floor plan of your business the way you envision it. How many offices will you need? How much storage for inventory/products? How much storage for records? Where will your employees have a break room? Don’t forget the restrooms; separate ones for employees and customers, to ensure privacy for all.

Where will you meet with customers? What equipment will you need and how much space will that take? Will you need holding space? How about a shipping and handling areas? How long will this space hold my business and its future growth?
For current business owners: Your strategic planning will help you determine the size of your growth and its directions. If you don’t have a blueprint or layout of your business, today’s the day to do so. Your evaluation of your business is as important as a start up business.

Take your time to do an honest evaluation of your needs. Short changing yourself in your space and location can bring your business to its knees.
Your businesses identity is tied to the location you pick as much as it is to your logo and marketing efforts. Choose your location wisely. It will make a difference.
Next month we will discuss identifying you customers, both internally and externally and understanding their needs. Are you ready for the challenge?
Got questions? Please call us at Highland Community College-Small Business Development Center at 815-599-3654.