12 August 2020

8 Factors To Consider When Choosing A Business Location

by Adam
 Factors to Choose A Business Location

Choosing a business location is an issue most entrepreneurs face with a pinch of salt. Many business start-ups settle for a cheap and small location in order to reduce expenditure. Others believe location does not matter, and only the quality of the product is essential. However, getting a good location for your business can be critical for its success. You should always keep in mind some business location factors that will be very important for your success.

Importance of Choosing a Business Location

The importance of business location factors cannot be understated. It is not only to attract customers but also to attract the right talent to make the business successful. Its location also helps it create a brand and image since there are some parts of a city with better popularity. Setting up your business in part of a town that reflects your brand can impact its success.

When deciding about a new business location factors, there are a few advantages and disadvantages to that location, which you need to consider. Consistent traffic is key to driving daily revenues and generating money necessary to pay loans and rent. On the other hand, high-traffic areas may be expensive, and paying such a high rent may only add further to existing debt. Business owners will often try to locate a place in a more affordable part of the city. However, the disadvantage is less costly parts of the city may include low traffic and may also offer fewer amenities that would otherwise help attract customers. Amenities such as available parking areas and well-developed infrastructure may attract more customers.

Business owners should find a balance between well-trafficked parts of the city and the cost of the place. Researching an area is the best way to decide whether it will be suitable for a business.

Factors to Consider When Choosing a Business Location

1. Availability of Raw Materials

If you are planning to run a manufacturing business, then the nearness or availability of materials is a huge factor. You should consider the location seriously regarding this matter. If your business is not located close to these materials, then transportation and security costs will reduce your profit margin.

2. Nearness to Traffic

The next important business location factor to keep in mind is that you need to have your business set up near a considerable traffic and their choice. Are they re-sellers or end-users?

Answering this will help you choose the best area for your business. You need to remember that you must make it easy for the customers to find your business for your business's success.

3. Availability of Infrastructure

The availability of some necessary infrastructure can be crucial for choosing your business location. Amenities such as water supply, power, and a good road network are some essential things to consider.

4. Economic Policy

The economic policy of the region may also affect your decision and choice of location. Some favor capitalists, while others are driven by socialism, where the government controls all businesses. Other factors to consider are fiscal and monetary policy, taxes, and duties.

5. Demographics

This factor can have a significant influence on your choice of location. The type of product your business offers and the status of customers will play a crucial role in your choice of the business location.

For example: Suppose your business is about selling stationery items. This means your demographic should be made up of students. So the best choice of location for your business should be near a school or a college.

6. Industrial Clusters

Some people may decide to site their business in industrial areas due to infrastructure and amenities already available. Industrial areas are specially built-in areas for commercial purposes. These areas are given special attention, and in some regions, heavy-duty manufacturers are forced to site their companies in industrial areas.

7. Export Processing Zones

Choosing a location for your business in an export processing zone may be smart, especially if you are an exporter. Setting up your business in such locations means a reduction in transportation cost, faster inspection, and clearance of your products by officials.

8. Distributive Channel

If you do not deal with end-users or final consumers directly, it's wise to put your distributive channel into consideration when choosing a region. The more you make it easier for your distributors, the better chances for your business to be successful. Reasonable proximity to suppliers is key to minimizing logistics costs.


The closer the products are to consumers, the higher will be your market value. From planning expansions in the future, relocating to newer offices or opening new branches in the correct location can be crucial for your business. So the factors given above can help you in your decision making to set up your business at the perfect location.

Also Read: Why You Should Choose Kochi To Start Your Business

In case you plan on starting a business in Kochi, you would probably need an office space to rent. Trans Asia Cyber Park provides commercial office space for corporates and professionals at the prime location of Kochi.

Contact us and let us know your office space requirements and we can work out a plan to get you started on your way to success and growth.