When figuring out where to open the doors of your business, there are plenty of things to consider, as location can be a truly important factor in growing your company and reaching for success. Do not be fooled into grabbing the cheap storefront just because the monthly rent is affordable. If the location keeps customers away, that cheap location could hurt your business by costing you significant sums in lost revenue.
The location of your business should help you in three ways – customer acquisition, establishing your brand, and maximizing profit. First, your business should be located in a place that allows for easy access. Second, your business’s location should contribute to your customers’ experience. Last, taking into consideration the previous two points, getting the best location at the lowest price will contribute to the bottom line in a positive way. Let’s dive a little deeper into why and how location contributes to these factors.
Brand value
Think of it this way: spending 500 dollars on a dress from a shop on 5th Avenue could be normal but buying the same dress in a bohemian neighborhood known for artisan crafts and shirts made from hemp would be odd. Different parts of a city have their own cultures and bring about different customer experiences – businesses in Times Square and the Bronx will likely offer unique buyer experiences.
First, you need to clearly define your brand. What do you want people to think of when they see your logo or someone mentions they bought a product from you? Do they think of something young and hip, older and elegant, feminine, strong, energetic, mysterious, sexy, or blue-collar? After considering this, what is your price range? If you are a cake shop, are you going for high-end customers that are going to pay thousands for a wedding cake or are you advertising to parents looking for mid-range treats for kids’ birthday parties? Once you have defined some of the adjectives associated with your brand as well as whether you want to be seen as a luxury or economical option, you can start thinking about what neighborhood and street your business will fit into.
When people visit different neighborhoods, they have different expectations for the kinds of products and services they will find. It is always important to meet your customers where they already are. Do not ask them to go out of their way for your product or service. Think of where customers would usually go to try to find your product or related products and see if that location makes sense for your business.
In addition to considering physical office space, keep in mind that if you intend to acquire customers online and serve them virtually, cut costs and put your business wherever is best for you. If your business is online, maybe having an office where it is convenient for partners and investors to meet would make more sense. Do you mostly work from home designing web pages but need to meet face-to-face with a client or two once a week? Do not bother with a storefront downtown. Get a membership or rent an office by the hour in a coworking space to save money while still having access to a professional environment where you can hold meetings.
Foot traffic
If you are located in a city that has a lot of foot traffic, take advantage of this. Make sure you are located where your target audience is walking around. Get in front of them by, again, meeting them where they already are. This is especially important if you are a newer brand or not well-known.
If someone wants to find a Nike store, they will just search for the closest one on Google and go there. However, if you make shoes for urban street fashion but you are a new brand, people will not actively search for you. If you have a store located in the right place for your target audience, people walking by your storefront may notice your product and stop in or look you up online later.
Businesses that rely on impulse shoppers especially need to take advantage of the benefits of being located somewhere where they get a lot of foot traffic. You may be walking down the street on your way to a meeting and, because you see a coffee shop, you get to thinking that an Americano sounds nice so you stop in.
If you have a product or service that does not sell directly to individual customers, you may not need to take foot traffic into consideration. For example, if you provide a B2B service, you are not really looking for the average person walking down the street.
Easy to find
While businesses located on small side streets may pay cheaper rent, they are also less visible and easier to miss. No one likes walking in circles trying to find your office. If people cannot get to your business and they need to meet with you to talk about a contract or they are trying to buy a product from you, you may lose an interested client before they even get through your door.
If you are on a tight budget and you cannot afford to rent a space on the main street, make sure that your location is still convenient to get to. If your customer simply has to turn off the main street and walk for one block (and you are the kind of business that has customers actively seeking them out like that), that is okay. If you send customers turning right and left and right and down an alley, you have already negatively affected their experience with your business. Keep the experience a positive one by opening your doors somewhere convenient for your customers.
Grow with the neighborhood
This could be especially useful for new businesses that are cash-strapped. If you have a product or service that can survive a changing neighborhood, getting a spot in an up-and-coming neighborhood to be ahead of the curve could be to your advantage.
For example, Seattle is currently a booming city. The International District, just east of the famous Pike Place Market, had become rundown and full of homeless shelters and boarded up storefronts. Now, it is in a transitionary period where new, hip clothing stores, coffee shops, and coworking spaces have opened their doors alongside old family-owned restaurants, print shops and convenience stores. The place is full of old and new businesses with homeless shelters and signs of gentrification all in the same place. Rent is also much cheaper in this neighborhood than in the city center just down the street.
It is always important to know your business and figure out what it needs to grow and prosper. Do not let location be a hindrance to your business if you can help it. In fact, if you can, leverage your location to add to your business’s ability to generate profit.
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