Five Factors That Influence The Success of Your New Business Location

Five Factors That Influence The Success of Your New Business Location

In order to be more competitive, a business must take into account the elements that impact the immediate business landscape. Regardless if the plan involves territory expansion or simply reinforcing strategy, every business should overlay demographic profiles, competitor density, overheads, transport availability and the potential workforce that is immediately available in order to decide on long term strategies.

Read more about these factors below.

Demographics

Where you base your business is dictated by the type of people who will be your nearest potential customers. There’s no point opening the world’s greatest mobility scooter store in the heart of a student village or a nightclub in a quiet town full of retirees. Seeing the relevant demographic data on a map makes it easier to spot a place with favourable demographics that still meets your other logistical needs.

Competitors

Basing your business near competitors can work both ways; on the one hand there is the danger that you’ll lose customers to your rivals, especially if they undercut you on price or have other benefits. On the other hand, you might benefit from customers looking to visit multiple outlets easily – think of all the jewellers in London’s Hatton Garden. Either way, competitor location data helps you find the hotspots.

Overheads

Overheads vary widely, depending on location. Beyond the price of buying or paying commercial rents for facilities and premises, you need to take into account business rates set by local authorities and factor in variations in running costs, such as commercial cleaning or alarm monitoring. Visual location data works particularly well when taking into account multiple factors to find the perfect place.

Transport availability

Transport accessibility virtually affects any business. Naturally, manufacturers need to consider the ease of accessing major roads, railways or airports for distributing goods. But even retailers still need to take into account the ease of receiving stocks and supplies. Not to mention customers: if you sell bulky items, you need to be readily accessible by car. Look for time-based location analytics that will warn you if what seems to be a great location for vehicle access is a no-go during peak hours.

Workforce

It is good to be based where suitable staff can easily get to work. Assessing this can range from crude categorisation (younger staff for local bars) to more sophisticated categories, such as academic background and subject expertise among a skilled workforce. Data visualisation will help location planning by showing where your talent pool is deepest.

Conclusion

Businesses can analyse these factors individually or by comparison. Individually, a business might see that the area demographics are in tune with their ideal customer profile, the density of competing businesses around their location, the transport accessibility and if an area has the potential to provide future skilled employees.

By grouping some of the factors with competitors, businesses can gain competitive insight. For example, profiling the nearby competitors might give strategists a glimpse of how the businesses are performing locally in relation to area demographics. Depending on the rival’s success and the associated overheads, strategists could understand if their competitors are struggling to maintain their territory.

Regardless of the business objectives, location analytics proves to be invaluable in analysing these factors.

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