Finding a suitable location isn’t only applicable to homeowners. Whether you’re a small or large-scale entrepreneur running an on-site operation, positioning your establishment in a strategic area is just as important when settling down in a location. That’s because choosing the right spot for that boutique or restaurant can make or break the success of your business.
Some businesses go the extra mile by applying for business mortgages to finance a large property for their on-site premises. Some even apply for mortgage refinancing to replace their business loan and pay off a new location as early as they can. This is especially true for entrepreneurs who are keen to find new customers in a different area or launch a new endeavor for their business.
Allowing more customers to access your business conveniently is a great technique to establish a widespread presence on your target consumer base. But choosing the best location is challenging for some, as it determines the failure or success of a business. One wrong move and will lead to significant consequences that will put extreme pressure on your finances.
In this article, we will look at some common site selection errors and what you can do to prevent them. Learn from these mistakes to get one step closer to your dream business location.
Moving too quickly
The site selection process is not done overnight. Before launching a new location, allot at least six months for site visits. Moving in quickly to the first site you find leads to impulsive decisions that will affect the success of your business. This often happens among entrepreneurs who are just launching a startup business. It is natural to feel excited and overwhelmed about your new endeavor, but don’t let the excitement override your best judgment.
When choosing a location, allow yourself to think things through first. Don’t let the pressure of moving to a new location rush you without doing proper research. If you hired a consultant or a realtor, don’t let them force you to make a decision that can negatively affect your business. But if they’re pushing you to take an immediate decision and sign the lease, it is best to find a more reliable realtor instead. The same goes for operating in a location that isn’t ideal for the nature of your business. If this happens, step back and look somewhere else.
Renting or buying a business location involves a huge expense that can affect your finances when done the wrong way. A great technique is to conduct market research to determine the demographics of a specific location. The information you gather will identify nearby competitors, specific market, and the buying behaviors of the people around the area.
Lack of information about the location
Knowledge is critical in commercial real estate. This means you need to make efforts to learn about the existing community in your target location, trends in the labor market, taxation issues, pricing in real estate, and other factors and challenges that revolve around a business location. Having this approach will help you form a comprehensive insight into the suitability of a business location.
A common mistake among business owners is to ignore issues regarding location needs and access. They tend to assume things that a specific location is the best for their business. But assuming is entrepreneurs should never do. This is a very risky approach that can affect your future sales. One example is when a business ends up relocating because of an expansion project or construction.
Go beyond the existing information by doing research and investigation. Ask the neighborhood or the local government agency about the community and future developments in the area.
Lack of legal consultant
Whether you’re a small or a medium-sized business, you need to have a trusted lawyer. Involve them in the lease negotiation to help you navigate the conditions of the contract. Any contract or lease agreement requires a legal consultant to help look for any inconsistencies in the agreement.
Most business owners quickly sign the contract without knowing its implications for their business. This can put you at a disadvantage by paying more than you should or landing on a location that still requires plenty of repairs. Understanding the factors that go along with the lease will help determine the financial considerations, renovation expenses, and other site upgrades.
When business owners are thinking about the location for their business, they end up underestimating what research can do when choosing a site location. In reality, doing research is just as important as formulating a business plan or finding a business location. It will help you create a corporate location strategy that will offer a competitive advantage and financial gains. As you learn from these mistakes, apply them as you go along your site location process.