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Tips on Choosing The Right Location for Your Business

Matt D'Angelo
Matt D'Angelo

It's one of the most important decisions you will make, which is why you must do your homework and answer all of the relevant questions.

  • The location you choose for your business is a monumental decision that needs to be carefully considered.
  • Price and acquiring a loan are arguably the most important aspects of finding the right location for your business.
  • Factor in what competitors and other businesses are nearby before making a final decision.
  • This article is for business owners who are trying to decide where their business should be located and how to choose a space that makes the most sense.

Choosing a business location is one of the most important aspects of starting a small business. Especially if you’re running a small retail or restaurant operation, finding the right location means everything. It can dictate foot traffic, business atmosphere and long-term success for your small business.

Finding the right location means understanding the right qualities to look for in a potential space. Analyzing your area, reading about potential customer demographics, and considering where competitors are located are all important aspects to finding and choosing the right location.

It’s also important to consider your needs as a business owner before deciding on a location. If you’re not running a retail or restaurant-type business and therefore won’t need to rely on foot traffic, it’s important to consider access for other business needs. This can mean supply deliveries, client meetings, and warehouse or major storage space for your business. By analyzing your options and defining your needs, you’re well on your way to finding the right business space for you.

Why your business’s location is important

If you run a business that is outward-facing in any way, which means dealing with clients or customers, you need to thoroughly consider how your location will contribute to your business.

Your location should be inviting and refined, depending on the type of business you’re running. It should create a positive association for clients and customers so they think highly of your business.

There are some important steps to take when considering any new business location. There is more to identifying the right location than just finding an available structure for your business to occupy. How you go about choosing your business’s location will define your organization.

Consider these steps first before examining other factors:

  • Do your research. Researching the right business location means understanding local zoning laws, plotting competitors’ locations, and maintaining a keen awareness of what properties are available (or may become available soon). You should also research your target market and other benefits or restrictions from local or state entities.
  • Consider taxes. Consider the state and local tax implications of your prospective location. Depending on your business type and location, it may be more lucrative to seek out a location outside a certain zone or municipality to get a tax benefit.
  • Ask about government incentives. There are incentives on both a federal and state level for small businesses in certain industries. By choosing the right location, you may qualify for certain incentives that could apply to your business.
Key Takeaway

Where your business is located plays a vital role in your success. It is the outward image of your company, and it sends a strong message to your customers about the type of business you are running.

Factors to consider as you look for a business location

By analyzing your business, what’s available to you in your general area, and what types of features you find important, you can find the right location for your business. Of course, oftentimes the most important factor is affordability. It’s critical to assess your options and work with a local bank while you’re trying to find the right location for your business.

Beyond affordability and lease terms, however, there are other factors and questions to assess in finding the right business location.

How important is the location to your business?

This may seem like an obvious question, but consider how location will impact your business. A retail store’s location varies widely compared to a central office’s headquarters. Consider your customers and clients, as well as your employees, when deciding the impact location can have on your business. You want to choose a location that makes the most sense for everyone.

Will your business receive ongoing shipments of goods?

If you’re working in the industrial sector, or you’re running a business that receives large supplies of goods, pick a location with warehouse storage space and easy delivery options for clients and customers. A business that specializes in shipping and holding goods needs certain structural amenities, like loading docks.

Will you conduct meetings at your business site?

Again, consider how your clients and customers will see your location. If you meet with customers and clients regularly, you need an accessible location. It also needs to have reception areas, waiting rooms and conference rooms so you can meet with multiple clients and customers throughout the day.

Will you, your customers or employees need dedicated parking?

Consider the size of your company when choosing a business location. Your employees will likely have to drive to your location. If that’s the case, is parking available? Similarly, if you’re meeting regularly with clients and customers, you need convenient parking options for them. Sometimes the most important aspect of a business location is the parking options that exist around it.

Who will see and interact with your location?

Consider who will come to your business on a regular basis. You need to tailor a location that meets both their needs and your needs as a business owner.


There are several questions you need to answer when choosing a location for your business, including whether there is sufficient parking for employees and customers, if it’s accessible for the easy delivery of shipments, and whether customers will visit your business regularly.

How to choose the right business location

Besides the factors listed above, when it comes time to choose where your business will be based, there are some important steps to take to make the right decision.

You want to analyze all of your options and consider the perspectives of as many people associated with your business as possible. Choosing the right business location means doing as much research as possible.

Consider these factors, too, as you hunt for the best location for your business:

  • Demographics: Consider your target audience and where they’re located. Research different demographic aspects about your local area, particularly around where your desired location is. If you’re a business that relies on foot traffic, you want to position your business as close to where your target audience is clustered as possible. By knowing this information, you can also build more facts about disposable income in your area and how high the demand for your product or service could be.
  • Competition: Consider where your competitors are. You don’t want to move in directly next door or across the street from a business rival. By knowing where your competitors are, you can find a business location that allows you to establish your own base. It can also allow you to better gauge demand for your product or service compared to other companies.
  • Building structure: Of course, finding the right business location is not just about the property, but about what’s on the property. Find a location with a building both you and your employees like. Consider its perspective from a potential client or customer. You need a location with a structure that makes the most sense for your business and your clients or customers.
  • Zoning: Research zoning maps for your local town or city. This allows you to gauge what business activities are allowed, according to your local area. If you’re a retail store or restaurant, considering the proximity to commercial zoning can be essential. Nearby residential zoning means you could have direct access to foot traffic in your area.
  • Other nearby businesses: Similar to considering where your competition is based, consider what other businesses are nearby your potential location. This is important, because those businesses could attract customers that are in your target demographic. Make a balanced, conscious decision when considering your neighbors. You want to collaborate with other businesses to create a prosperous economic environment. You shouldn’t have to settle for adversarial business relationships.
  • Foot traffic: Good foot traffic can be the crown jewel for certain small businesses. When searching for the right location, if it’s in a highly foot-trafficked area, visit the location several times throughout the day so you can see how crowds ebb and flow. Do your best to gauge how your business could benefit from the level of foot traffic in the designated area of the potential location.
Did You Know?

Before choosing a location, consider the demographics, what competition and other businesses are nearby, any zoning issues that may be impactful, and how much foot traffic you can expect.

Image Credit: toondelamour / Getty Images
Matt D'Angelo
Matt D'Angelo
Contributing Writer
I've worked for newspapers, magazines and various online platforms as both a writer and copy editor. Currently, I am a freelance writer living in NYC. I cover various small business topics, including technology, financing and marketing on and Business News Daily.