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How to Indentify (Identifying) a Profitable Small Business Location

Updated on September 20, 2011

small business location

How to identify a profitable small business location

Finding a new business location which will guarantee the growth of your business is something that all entrepreneurs would love. With the right profitable business location you are set to outdo your competitors even when you are still crawling in your venture. When you are in the process of starting a small business, do not rely totally on your agents and brokers to make decisions for the location where you want to start the business.

Below are some factors to consider when selecting a new business location


Evaluate what amount of cars and pedestrian are projected at your new selected site to start your business. Remember it is the traffic that count, the more people see your business, the likelihood they will either one day buy from you or refer somebody to your business.


When selecting a business location consider the fact that anybody who wants to buy from you can get you without many problems, are the roads leading to your business location in good condition and would not cause accident to your potential customers


What competitors are already doing the business, do you foresee many competitors coming to the location, if you think competitors might be many then you should take note that this is a good place to be since everybody wants to start business. Sometimes competition is good for growth and innovation


Check on the planning department at city hall to determine the exact plan approved and environmental impact assessment and other regulations that may apply to the location

Parking space

Does the new location you intend to start your business have a secure parking and propely maintained space, people normally will come back if they did not have a problem with parking. New business location should have proper parking lanes.

Condition of the building or premises

Building start your business should be fairly clean, dirty buildings will drive away traffic, the building should have proper ventilation, good roofing to avoid water leak, no rusty walls with cobwebs all over the place. The building should be clean and smart

Insurance Policies for small business

Find out what type of insurance policy would apply to your selected premises, what cover would you need for your employees and asset, if you have leased the building find out from the landlord what cover he has for the building

Population density

The size of population will determine the traffic flow of the area; a densely populated area will have a higher traffic than a sparsely populated area. When selecting business locations you must take into consideration that the higher the population the opportunity for growth is very high and also take into note that areas with small population also have a high growth rate as people will be moving in slowly, for long term strategy you should consider such area

Income level of the neighborhood

Are people in this area have the capacity to afford what am offering, if they get difficulty buying what you are selling to them then, know that your products are luxuries to them hence you will not have a high profit turn over

Other factors to consider when selecting profitable small business location includes

  • Crime and shoplifting rates – the lower the crime rate the better
  • Availability of work labor
  • Consider your labor rate per and compare with what other small business are offering
  • Good infrastructure such as water, gas and electricity
  • Rental rates terms should be affordable when you are selecting your business location
  • Availability of transport for those who do not have personal vehicles

Below are some of the factors to consider when selecting a small business location. There are many factors that you can generate when deciding your business location.


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