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5 Reasons Why Business Location Is Important

Updated on August 12, 2015

McDonald's In A Desert

Is a desert really a good location for your business?
Is a desert really a good location for your business? | Source

It Is All About Finding the Right Location For Your Business

I previously lived in a remote rural area, which possibly hit a population of few thousand people if you include seasonal cottages. This area has no big box stores, no major fast food chains, no movie theaters, etc... But it does have a lot of cottages, campgrounds, resorts & hunting camps. Why is that? The answer is simple: location.

I now live in Toronto, Ontario, a major Canadian city which consists of a few million people. It has a Tim Horton & Starbucks on every corner, numerous movie theaters & concert halls, but no cottages or campgrounds. Why is that? Once again the answer is simple: location.

Unless your business is exclusively online (even then there could be disadvantages if the area is too remote), location is important.

Let us consider 5 reasons why business location is important. It should be noted that some of these reasons are more applicable to certain types of businesses.

Hot Dog Cart Location

Hot Dog Cart in a location which would potentially get a lot of pedestrian traffic.
Hot Dog Cart in a location which would potentially get a lot of pedestrian traffic. | Source

Traffic of The Business Location

For your business to succeed you need to go where the people are. Even in the remote area where I used to live, the one grocery store, one drugstore, one bank & one post office is centrally located in the main village where most of the residents are located. The Liquor Store & Beer Store, along with a few gas stations is located off the main highway. There is a lot of traffic that travels down that highway. Also it makes these locations easily accessible for tourists.

In a major city, area traffic can include heavy pedestrian traffic.

Demographic of Business Location

Not only is the amount of people a factor, but the right people are just as important. For example in the area where I used to live someone could make a good living operating a campground, resort or renting out a cottage. Why is that? It has to do with demographic. A remote area by the lake can appeal to people who want to get away from the city.

Where I live now is known for its cultural diversity. So if you are interested in opening a restaurant which specializes in ethnic cuisine it is a good area to be located. That being said there are certain parts of the city which have a higher concentration of certain cultures. If a certain type of food or product has cultural appeal, it good to know where those cultures are located.

A Busy Starbucks Mall Location

This busy mall location is an example of a potentially good location.
This busy mall location is an example of a potentially good location. | Source

Visibility of Business Location

Having a business location that is visible is also important. For example, corner lots generally cost more because of this. Or if your business is located in a mall it is going to generally cost more to have a location with an outside storefront.

If you are in a complex, the visibility could include the available signage. You want both passing pedestrian and automobile traffic to know where you are located.

Accessibility of Business Location

There may be a high volume of traffic in a certain location, but if it is not easy to access then it doesn't really matter. This could be the case if it is off the highway. It should be easy for automobiles to turn into the location without creating a traffic accident. Depending on the area, accessibility could include available parking or it could include accessibility to public transit.

Another factor in accessibility is do your clients come to you or do you go to your clients? Easily being able to access your clients is another reason why business location is important.

Consumer Location Poll

Would you pay more for a product if it was located at a convenient location?

See results

The Business Location Nearness to Suppliers

Depending on your business, where you are located in connection with your suppliers or other support services could be a factor. This could be a cost factor, but if you are in the food industry it could also be a possible quality control factor as well.

Review of the Top 5 Reasons Why Business Location Is Important

So as a way of review here is a list of the top 5 reasons why business location is important.

  1. Traffic
  2. Demographic
  3. Accessibility
  4. Visibility
  5. Nearness to suppliers

Understanding these 5 reasons why business location is important is the first step in selecting the perfect location for our business.

© 2014 Chris Baker


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