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How to Choose the Best Location for Your Business

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How to Choose the Best Location for Your Business

By Caron_Beesley, Contributor
Published: March 1, 2012 Updated: September 28, 2016

Whether it’s Main Street or Silicon Valley, your business location can mean the difference between success and failure. But more than that, your business location is the linchpin for your reputation, your brand, and your profits.

In fact, choosing a business location is perhaps the single most important decision a small business owner or startup will make, so it requires precise planning and research. It involves looking at demographics, assessing your supply chain, scoping the competition, staying on budget, understanding how state laws and taxes might impact you, and so much more.

Here are some tips to help you choose the right business location.

What are your needs?

Most businesses choose a location that will provide exposure and drive foot traffic or volume to their location.  That makes features like parking, pedestrian and vehicular access, the reputation of the neighborhood, and the proximity of other businesses all factors to consider.

However, there are other less obvious factors and needs to consider as well. For example:

  • Brand image – Is the location consistent with the image you want to maintain?
  • Competition – Are the businesses around you complementary or competing? Some businesses, such as retail stores, benefit from being in a retail hub alongside the competition. Others may be at a disadvantage if located close to competition.  
  • Local labor market – Does the area have what you need in terms of potential employees? Can they make it into work without encountering hellish traffic?  
  • Plan for future growth – If you anticipate further growth, preempt the need for multiple moves by looking for a building that has extra space you can expand into should you need it. Your budget should also include cost estimates for furniture, utilities, and IT needs. 
  • Proximity to suppliers – They need to be able find you easily, too.
  • Safety – What’s the crime rate? Will employees feel safe alone in the building or walking to their vehicles?
  • Zoning regulations – These determine whether you can actually conduct your type of business in certain properties or locations. You can find out how property is zoned by contacting your local planning agency.

What about the money factor?

Besides working out what you can afford, you’ll need to be aware of some other financial considerations: 

  • Hidden Costs – Very few spaces are walk-in ready.  Don’t forget to include costs like renovation, decorating, IT system upgrades, and so on in your budget.
  • Taxes – What are the income tax and sales tax rates for your state? These vary greatly. What about property taxes? Could you locate your business across a nearby state line and pay less in taxes? This article on AOL Small Business from SBA guest blogger, Barbara Weltman, stacks up The Best and Worst States for Small Business Taxes.
  • Minimum Wage – While the federal minimum wage is $7.25 per hour, many states have a higher minimum. For example, in Washington state the minimum is $9.04 per hour. If you are re-locating your business, this might negatively impact payroll costs. View the Department of Labor’s list of minimum wage rates by state.
  • Government Economic Incentives – Business location can determine whether you qualify for government economic business programs, such as state-specific small business loans and other financial incentives.

Does the state or community offer business support resources?

Getting good advice about laws and regulations on business ownership in a particular location is essential. Likewise, as you look to grow your business, it can be advantageous to work with a small business specialist or counselor. Check what programs and support your state government and local community offer to small businesses. Many states offer online tools to help small business owners start up and succeed.’s Business One Stop is just one example. Local in-person community resources that specifically support small businesses include SBA Offices, Small Business Development Centers, Women’s Business Centers and other government-funded training, mentoring and counseling programs. Find out if there are any in your location here

What’s the bottom line?

Do your research, because getting your business location wrong can be costly. Talk to other business owners and potential co-tenants, work with a mentor, and use available resources, such as these free demographics from, to help in your efforts.

About the Author:

Caron Beesley


Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley


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"Plan for future growth" "competitor analysis" is the two most important consideration for plan any business location. I agree with you that "your business location is the linchpin for your reputation, your brand, and your profits".
This is why all small business sectors prefer online market place to avoid these barriers
Getting your business location wrong can be costly. One of the main advantages of internet bussiness is that location is the least important factor.
This is a helpful post. I've been researching the demographics of my town and other towns nearby for my business. It's a whole lot harder than I'd imagined, because there are so many factors to consider! My mind is in overload mode right now,
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