4 Reasons the location of your business is key

Are we there yet?

Whether you’re opening another franchise or starting anew, where you set up shop is a crucial ingredient to building a successful business.

But, what constitutes the perfect location?

Here we’ll scope out the reasons why some locations are better than others and help you come to a more informed decision as to where to put your business.

So dust off the map and ditch the compass, we’re going to get practical. The 4 aspects we’ll get into more detail with are:

Business type

Customer base

Proximity to other businesses



What are you selling? It might not seem a pertinent question given this is supposed to be about geography, but knowing what type of business you have will help you find a home for it enormously.

If it’s a fast food restaurant, should you set up shop on the side of a road or where you know there’ll be hungry commuters, like a petrol station? Of course you should – look for the obvious business opportunities.

For the same reasons a garage forecourt would be a bizarre choice for a clothing store. People go to certain places for certain things. You wouldn’t ask your tailor to make you a pizza, and rightly so; for one thing it’d taste like fine Italian wool and be full of stitching.

On the other hand, putting a fancy fine dining establishment halfway down an A-road might not be as successful as the fast food drive-thru next door. There’s no golden rule, per se, but the type of establishment you’re running should be somewhere near the top of the things worth considering when thinking about a location.


Ok, so you’ve decided you’re going to open a brand spanking new jazz bar in the middle of the suburbs. You’re convinced that this little speak easy will be a success given the 30 to 40 somethings living here peacefully with the kids. With fast flowing liquor and non stop jazz playing live until 2 am you’re sure you’re onto a winner. Spoiler alert: you’re not.

If you’re thinking of expanding your cocktail bar and adding a second floor it might not be ideal to do so knowing your only customers come from the cul-de-sac around the corner and those 3 blokes only come during happy hour before the band have arrived.

You get my point here. If you’re setting up shop in a highly urbanised area with a lot of families you should try and make sure it’s going to be in demand by those people. Needless to say that takes market research and a good knowledge of the area.

Which leads us nicely on to our next point of discussion…



Why are businesses clustered? Well, with good reason. Location.

As a species we tend to congregate, especially on our days off. That means we enjoy malls, which invariably means we eat in food courts and enjoy buying our fishing gear from the fishing district, which might contain 4 speciality fishing shops.

Similarly, if we want to go out for Chinese food, we head to Chinatown, where we know there’ll be a wide variety of Chinese restaurants.

It inevitably leads to increased competition between businesses, but that’s a small price to pay to ensure a healthy flow of customers that know what they want and where to get it.

So if you’re thinking about where to put your bike shop, your coffee shop or even your bait shop, look at where the others are, it might just tell you something.


Imagine you’ve found the perfect location. It’s got great transport links and you know there’ll be a solid steady flow of customers and it’s exactly where somewhere like this would be. There’s one but. The price.

If you’re going to be paying a premium to rent the space then you need to work out what the risk is. Likewise, if you’re the owner of a business that sells luxury items in a premium location then insurance might bump up that price even more.

Throw in utilities and maintenance and you’ve quickly got overheads that need to be weighed up against potential turnover and ultimately profit.

Although the price might seem like a small point at first when your vision of the future is so laden with potential profits, it’s worth looking twice and ensuring what you’re seeing is being seen with clear vision and a clear head, otherwise you could be looking at losses before you’ve even got started.


Location, location, location.

There’s a reason (or 4) why it’s so often cited as an integral part of business planning.

It’s also a malleable notion. As locations become fashionable, so business thrives. When that ceases, what happens to those businesses?

And what does the future hold? As urbanised cities grow and areas become gentrified will we start to see businesses attempt to conquer new geo-demographics? Can it even be done? Or will we continue to see businesses congregated in dedicated retail spaces?

We’ll have to wait and see…

Want to learn more?

Sign up to our newsletter