Location Frustration

Real estate brokers – residential and commercial alike – are big fans of the mantra “location, location, location” as the three most important real estate considerations.

True enough. But depending on the type of business you own, the location that is right for you can vary widely from a ritzy mall to an industrial park. For example, a retail business – such as a boutique or sandwich shop – will thrive in a upscale location that draws a reliable daily walk-in trade. On the other hand, if you manufacturer bathtub fixtures, you may prefer a location closer to suppliers and transportation arteries.

Even if your clients need to visit your business, you might still consider the possibility that a reasonably priced, slightly offbeat location may make more sense than a high-cost, trendy one. On the one hand, you'll pay comparatively low rent and have more money to spend on other aspects of your business. Just remember that if the tradeoff for low rent is low traffic, you are likely spend the difference on advertising costs.

Here are a few considerations in choosing a business location:

Know your needs. If your business depends on walk-ins, determine the traffic patterns in the area. Where is the growth of the town directed?

What are the zoning regulations? Make sure the property is zoned commercial by calling your zoning administrator at the city hall. If it is not, you need to request a variance that may or may not be granted.

Are stores in the area compatible with your product or service?
Would their clients shop in your store?

How responsive is the landlord? Is the general appearance of the area neat and in good shape? Make sure the contract clearly states maintenance costs and who is responsible for them. Get everything in writing.

What is the history of that location? If three other restaurants have failed in that location, maybe you should think twice before you locate another restaurant there.

No matter what your business, finding the right location takes time and careful consideration. No decision should be made in haste. A few months' delay is a minor thing compared to the heartbreak of losing your business.

Remember: Never purchase anything or sign a lease without being absolutely sure that you are allowed to operate your business there. You will also need to find out whether any other legal restrictions will affect your operations. For example, some cities limit the number of certain types of business in certain areas, and others require that a business provide off-street parking, shut down early on weeknights, limit advertising signs, or meet other rules as a condition of getting a permit.

To help you in your decision making process, many cities have business development offices, which help small-business owners understand and cope with restrictions.