Importance of Choosing the Right Location for Business

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Every budding entrepreneur should be aware of the importance of location in business. Whether you are starting a business at a new place or planning to work from home, location for business will always have a definite impact.

Even after the advent of online shopping platforms, choosing the right location for business becomes preliminary while developing a business plan. The site of the business affects the sales and future prospects thereby playing an essential role in deciding the growth.

Besides the popularity, convenience and the affordability of the brand, there are several other factors to consider when choosing a business location. If you are on the first step of starting  a business, surely consider the location because of the following reasons.

While deciding the location for business, make sure you estimate the investment and other cost incurred.

Factors to Consider When Choosing a Business Location

Sales Tax

Among the prime business location factors, sales taxes are of the primary concern. The amount of payable tax varies according to the location for business. It depends on the Municipality and the position from the proper city.

Often, the rural corners incur lesser sales tax than the urban hubs, thus making it mandatory for the budding entrepreneurs to develop an effective business location strategy. No matter how much you try, you have to pay a minimum amount of tax to the government.

Read: Tips for Starting a Business After College Graduation

However, if it is considerably low, you will not have to compromise with the annual turnover. Hence, a good location for business indirectly determines the amount of financial savings.

Attracting Customers

If you are wondering how location affects the success of the business, then you must have sensed the relevance already. The location for business has a direct impact on attracting the customers. You must have noticed the shops brimming with bunch of customers in a busy marketplace.

On the contrary, the same shop blooming inside an alley hardly takes any visitors. The reason is quite simple, a busy marketplace witnesses a greater number of foot counts than an isolated alley, which is why choosing a store location is held a primary factor.

Today, with the growing popularity or shopping multiplexes, malls are also considered to be the best place for business.

Importance of location in business
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Tackling Rivals

If you are taking up a business which fetches umpteenth profit, chances are you are not the only one in the game. Where the metropolitan cities have a greater number of people taking up similar jobs, the rural sectors face lesser competition.

Also See: Franchising a Business: Consider These Pros & Cons of Buying a Franchise Before Owning One

Hence, if you want to outdo your rivals in the market, you have to choose the best location for business. Business location analysis is downright important in popular businesses that involves food, clothing, etc.

If you are directly selling a product and owning a shop, the yearly sales record of your products will be the deciding factor for excelling in the competition.

While planning the business location strategies, do research about the basic infrastructure of the roadways, power supply and availability of conveyance.


A good location for business will also mean a wide hole in the pocket! A shop on the market front will need more investment than an isolated back street, without any argument. The amount of money you can invest in the location for business is one of the important factors to be considered when deciding on the location of the business.

Though banks readily offer loans to businessmen, make sure you do not sink in debt so much that it can not be compensated within the first two years. If you run out of investment, go for a cheaper location, and invest in good marketing, because at the end of the day, quality will eventually attract the customers.

Availability of Resources

While deciding the business location factors, make sure you research about the availability of the resources. If your shop has inappropriate availabilities of basic amenities like electricity and water, then it will have lesser chances of success.

Check Out: Reasons Why Outdoor Signage Is As Important As Your Website In Business

This is primarily considered in cases of industrial business ideas which involves manufacturing and processing. In such cases, the business must be established according to the rules set by Municipality. For example, a production unit of anything inflammable needs to be set up away from the residential areas to ensure safety.

Hence, the type of business you choose is also one of the major factors to be considered when deciding on the location of the business.

Favourability Of Home-Based Business

Home-based businesses are often better in terms of investment and expenses. If you are operating from home, you will be saving a lot on the rents. A small front facing corner allocated for the business will eventually mean zero investment in getting a separate location. For this reason, it is also considered one of the best locations for small businesses.

Also, the comfort of working from home will cut off the expense of travelling to the workplace regularly. This is favourable for retailing and online selling as in these cases, the customers are fetched by contacts and via the online platforms.

Thus, if you want to start with minimum investment, home will undoubtedly be the best location for business.

The availability of raw materials for the business should also be considered. This depends on the nearness to the suppliers as well, otherwise a significant amount of profit will be lost in stocking up the products from a faraway place.

Wrap Up – Choosing the Right Location for Business

The location for business plays an important role in deciding the success of any business. It not only helps in attracting more customers, but also adheres to the success and growth of the business.

Must Read: When Is The Best Time To Start A Business?

Now that you have understood the basic importance of a good location for business, do spend a considerable time in planning the position right before making your strategies ready.

Consider all the factors that comply with the type of business you prefer, but make sure you calculate the investment before proceeding.

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