14 Things To Consider When Choosing Right Location For Your Business

14 Things To Consider When Choosing Right Location For Your Business

Starting a business always comes with a lot of questions and uncertainties. If you are going to start a business that involves a storefront(shopfront) then the location can make or break your business.

Choosing the right location for your business is very essential as it is the first thing a potential customer will look at. It is by which a customer decides whether to buy your services or products. The importance of location is even more pronounced for Small Businesses.

So, How to choose the right location for your Small business? Here we have listed all the characteristics of a perfect location.


Unfortunately, the most important factor which determines revenue of a storefront is often the most neglected one. Even though the effect of the population of location on business is indirect and broad, it is still an important factor to consider before deciding on a location.

Starting a business in a populous area is more likely to succeed and also the profits will be higher. More population implies more potential customers and additionally even if your store is providing subpar services you will still get customers.

A most noteworthy advantage of a populous area is that businesses are less likely to fail as there is a high chance of finding your right customers.

Niche Customers

If your firm provides services for a specific type of people it should be as close to them as possible. For example, a stationery shop close to schools or colleges performs better than the one located near a highway.

Find out where your customers are, try to start a store in that area. The best place to have your sports gear store is next to a sports complex.


After you start a storefront, your immediate competitors would be nearby stores of a similar kind. So it is necessary to choose a location that has zero or very minimum competition.

Make sure to investigate the alternative services or products the residents used till now and compare what you have to offer. This gives you an idea of how likely you will succeed in your business endeavor.

Brands and Showrooms

Don’t be reluctant to start your stores next to a corporate showroom. You might think having a Brand Showroom next to your shop is bad for your business. This is a mistake, the key here is to target different types of customers and offer different products to those available in showrooms.

Branded showrooms offer costly items and are meant for a specific category of customers. Shopping Malls usually targets customers of above middle-class families. In contrast, you can offer items of all prices and all kinds of products thus targetting the rest.

It is okay to start a small shoe store next to a Nike Showroom, your target customers are different to those of Nike’s. Additionally, being next to a Shopping Mall will give you a free advertisement


Nowadays customers are preferring businesses with an online presence. To know why and how you can achieve it, check out why customers prefer businesses with an online presence

So, it is beneficial to embrace technology and use it to increase your sales. This will help you in the long run.

Essentially you would need a location with access to good internet and facilities to conduct business via online platforms.

Online reviews and ratings

Existing reviews for businesses of a similar kind can help you understand the requirements of customers in an area. Go through the reviews of your potential competitors and try to understand where they are falling behind.

In theory, you would want a location where customers are not so happy with the existing businesses and have rated it very poorly. Don’t think having no reviews implies customers don’t like a business, it might be due to poor mobile usage in that area.

You can use this data to reevaluate your business and make the required changes. In this way, you can outdo your competitors and gain a bigger market share in the area.

Literacy rate

Some businesses can only sell their products to educated people. If your business comes into the same category, location with a high literacy rate will definitely boost your sales.


No matter how amazing your services( or products) are, you won’t earn a single rupee unless a customer buys it from you.

In order to attract customers, your storefront should be visible to them. The best such places include next to the main road, near a junction, etc. This allows for a large number of people to know about your store.

Buying power

If you disregard the buying power of customers, you will most certainly fail. Decide if the products you sell are essential, non-essential or luxury.

If your business sells the latter two kinds of commodities/services, you need customers of high buying power. So, cities and developed areas will be the right choice for location.

Analyzing the median income of residents in an area will give you valuable information on their buying power. It will also help you in fixing prices for your services.

Land rates and Rent

The most important thing to consider before starting a physical storefront is to consider the land prices and rent. Do not forget to include the cost of your stay in the expenses of your business. If the rent in the location is high, it will cost you more to stay there and work.


Any business needs an accessible transport network to move its products or to bring in raw materials. So, the ease of transport should also be a factor when deciding the correct place for your store.

You don’t have to be next to be a railway station, just choose a place which has easy and cheap transport. Remember that every product you sell, you are also charging customers for the transport of it. So, the cheaper the transport is, the cheaper the product will be.

Raw Materials

If your business requires raw materials, your store should be either near areas that produce them or should have an easy transport system available from those areas.

Try to choose a location such that you have multiple methods of getting raw materials. Having a single mode of transportation or a single area that produces raw materials can cause problems later.

Cost of living

The cost of living in the area can provide you with a general idea of how profitable your business could be. It will also help you decide on the product prices and services in your store.

Data on the cost of living and buying power of customers can help you in expanding your business and to increase your products or services. These two tools when analyzed correctly can tell you everything you need to know about customers.

Additionally, it allows you to decide on wages for yourself and your employees.

Tourist spots

Areas with tourist attractions offer more opportunities for businesses. If a location attracts foreign visitors, learning their language will give an edge over your competitors.

You could provide more services for tourists ranging from working as a guide to selling local souvenirs.

You can check our article on simple mistakes small business owners make to know more about running a business successfully.

Sandarsh Naroju

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