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How to Find the Best Location for Your Business

Finding a location for your new business, or possibly a second location or a relocation for your growing enterprise is easy. Finding the best location for your business takes time and demands answers to questions of your business fundamentals.

Right or wrong, the location of a business can define what it does and who it serves. A hasty decision or the choice of a flashy, too expensive building can hobble a promising new business from the start. On the other hand, taking into consideration the costs of relocation, including heavy equipment moving, ongoing expenses such as rent and utilities, and location access for vendors and customers can help ensure success over time.

Strategic Element

Location planning is an essential part of a business plan. The elements of a business plan provide a practical view of what a business can expect in terms of income and expense. Producing a similar, practical overview of the costs and business benefits of a location allows for those key elements to bolster the overall plan.

Choosing a location is a strategic decision that defines the business as much as the design of the product or the elements of a service. Making that decision involves considering things like regional differences in taxes and transportation costs. The Small Business Administration offers some helpful tips for researching business locations, including tax issues, customer research from demographic information sources, federal and state financial incentives and even registered business consultants.

Enough Space

Deciding how much space, what kind of space and the need for equipment is the next step in finding the best location for a business. For example, a retail space may not require production or packaging space but will need space for inventory and deliveries. Food service needs a kitchen or other meal preparation space while a production or assembly operation needs space for equipment and materials movement.

Consultancies and many professional services, on the other hand, do not require much more space than a desk and files. The trend toward operating many professional services from home is expected to continue.

For customer-facing businesses, the location speaks volumes about the business and its wares. A high-end jewelry shop might seem out of place in a suburban business park, unless the target audience is shoppers looking for a certain brand who are happy driving to the little shop just off the highway. Likewise, the two-block stretch of retail shops on Main Street in Anytown, USA, likely would not welcome a metal foundry and machine shop.

Zoning Restrictions

Most local governments have land use and zoning ordinances in place designed to prevent proximity of conflicting uses of physical space. The primary designations for land use in zoning are residential, commercial, industrial and agricultural. Many local governments add mixed use designations for areas where a combination of residential and commercial uses, for example is allowed and encouraged.

Zoning regulations give local governments the authority to restrict the types of businesses that are allowed to operate. Zoning rules can also be used to restrict some business hours of operation, noise, signage, parking and hazardous chemicals. Make plans to check with the city zoning office or other local government agency to see if an intended use of location conforms with its rules.

Local Contacts

Many location questions can be addressed through contacts with local economic development non-profits and chambers of commerce. Commercial real estate brokers can provide local knowledge and online real estate listings can provide insights into local availability and average cost per square-foot of commercial and industrial space.

Other considerations include site security and local criminal activity. Assuring customers that a visit to your location is safe builds trust and encourages shopping. Most states provide data on types of crimes and crime rates that can be filtered to the town or city neighborhood of interest.


Any successful business will need to grow. Does the location offer room to expand? Asking these key questions will help the business owner choose a location that best suits the business.

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