Have you been affected by a disaster?
Starting a Business

Blogs.Starting a Business


How to Choose the Best Location for Your Business

Comment Count:

Comments welcome on this page. See Rules of Conduct.

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. Virginia.gov’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 SBA.gov, 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 SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley


Thank you Caron Beesley for your brilliant ideas! The concept that you provide to help how a business can thrive providing new inspiration for me to run my business.
this is a very nice and helpful article
Another thing you have to consider is the type of business you have and the needs of the community. Its either going to be the right location or its not.
writing research paper Good post….thanks for sharing.. very useful for me i will bookmark this for my future needed. thanks for a great source..
If you are leasing or renting, it’s important to get a good feel for how the owner or manager of the property operates. I’ve known business owners who have had the ideal location for their business but the owner of the property was so terrible to work with they were miserable.
this is a very good advice "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"..thanks for sharing
These are very good comments but it can be extremely difficult for small businesses to locate their business based on such criteria. The cost of such locations can be a huge obstacle to small businesses and such businesses instead tend to be located close to the business owners home town.
Two points come into my mind, one is money to invest in the business and the other is understanding the industry structure of that business.
you have give us the perfect idea for business location
One thing most important that while choosing a location for your business one should keep in mine the thing which they are opening is there another man who is working on the same business.|Custom Logo Design| Logo Design Service|Inexpensive logo design|


Leave a Comment

You must be logged in to leave comments. If you already have an SBA.gov account, Log In to leave your comment.

New users, Register for a new account and join the conversation today!