Starting a Business

Choosing the location for your business can be one of the most important decisions you will make, so it requires precise planning and research. It involves looking at demographics, assessing your supply chain, scoping the competition, staying on budget, understanding state laws and taxes and other considerations.

Here are some tips to help you choose the right business location.

Determine Your Needs

Most businesses choose a location that provides the most “foot traffic” and exposure to customers. There are however, some less obvious factors and needs to consider:

Brand Image – Is the location consistent with the image you want to maintain?

Competition – Are the businesses around you complementary or competing?

Local Labor Market – Does the area have potential employees? What will their commute be like?

Plan for Future Growth – If you anticipate further growth, if possible, look for a building that has extra space should you need it.

Proximity to Suppliers – They need to be able to find you easily as well.

Safety – Consider the crime rate. Will employees feel safe alone in the building or walking to their vehicles?

Zoning Regulations – These determine whether you can conduct your type of business in certain properties or locations. You can find out how property is zoned by contacting your local planning agency.

Evaluate Your Finances

Besides determining what you can afford, you will need to be aware of other financial considerations:

Hidden Costs – Very few spaces are business ready. When creating your estimates, make sure to include costs like renovation, decorating, IT system upgrades, and so on.

Taxes – What are the income and sales tax rates for your state? What about property taxes? Could you pay less in taxes by locating your business across a nearby state line?

Minimum Wage –View the Department of Labor’s list of minimum wage rates by state.

Government Economic Incentives – Your business location can determine whether you qualify for government economic business programs.

The Bottom Line

Do your research. Talk to other business owners and potential co-tenants and utilize available resources, such as free government-provided demographic data, to help in your efforts.

the U.S. Small Business Administration

About the Author


the U.S. Small Business Administration


The United States Small Business Administration (SBA) is a government agency that provides support to entrepreneurs and small businesses. The mission of the Small Business Administration is "to maintain and strengthen the nation's economy by enabling the establishment and viability of small businesses and by assisting in the economic recovery of communities after disasters". The agency's activities are summarized as the "3 Cs" of capital, contracts and counseling.