Choosing A Location For Your Small Business
How do I choose the general area of my business?
Well it depends on the business. In some cases it's like real-estate; location, location, location. If your dealership is for Rolls Royce, then generally you don't go to the poorest section of town; generally you go like to the wealthiest part of town. In our area here in California it's probably in Beverly Hills that you'll find a dealership for expensive vehicles. If you carry the same thinking down to everything, every type of business you have, you can see where this fits in. Now, if your clientele are mostly not at the top of the economic scale; if you're actually satisfying the needs of those markets that are underserved, then your location wants to be where you customers are. If your customers are certain ethnic groups; Asian, Hispanic, Jewish, or something, then maybe you want to be where they are if that's the type of product or service you're providing. You want to investigate a location in that sense, and you want to see where you competitors are likely to be. I'm amazed; I don't know how it is in other cities, but here we have a Starbucks; two on every block. How they do that I do not know, but never mind. They've studied that and they've found out that it is profitable for them to do that, but it's very important to be where the customers are and that the customers are sufficient. The market is large enough to take care of a situation where you going to have two retail stores in the same place, especially if it's the same brand or even a competitive brands; it's going to work. Say you look around and measure the people walking in and out and what their buying and so forth. Then, you can do your own little market study and that's how you figure it out.
What are "zoning laws"?
Zoning laws have to do with how the city is zoned in certain ways, usually to prevent and protect their residents. You have a residential area, and maybe a business and commercial zone. If you have heavy-duty manufacturing, for example, you don't want to necessarily put that in a residential area. There are other types of businesses also which are very restricted in that sense. I wouldn't worry about them until you apply for your license, because they'll let you know exactly up front what you have to do, and whether you're allowed to do it, especially if you own a home business.
What is a "commercial location"?
When choosing a location for your small business, a commercial location just means where industry is. A lot of it has to do with zoning laws and whether you're allowed to be in certain areas or not. However, commercial property may be for manufacturing or some type of industry, and they're a little bit different than residential which is mainly for living. There are real estate agents that handle only commercial. There are real estate agents that handle only industry, some deal with both. They're available; you look in the telephone book, the internet and so forth, they're all over the place.
How do I decide what commercial location is best for my business?
Well, a lot has to do with what type of business you're in. For example, if you're a clinical psychologist, you want to be near other health care providers, probably. So you want to look at where they are located. And different types of businesses are like that, they want to be where others are. Shopping malls, for example. If your type of business is in that shopping mall, that may be a good location. Expensive, but nevertheless a good location.
How is the rent determined for a commercial location?
Well, usually the rent is based on a square footage basis, but it really depends on what you want. I mean there are a lot of folks for example, if you have different types of consulting businesses, or a business that you can work out of an office on a temporary basis, they may give it to you on some other basis, but that's not all that difficult. You don't want to jump to the first place you see, you want to look at several so you'll have price comparisons just as if you were looking at a home to rent or to buy. Some leases are fairly simple, but these can go from anywhere from one to five years. A lease can be very difficult, and you want to look at the terms very carefully. If you're not using an attorney, you remember that what you sign is what you sign, and you're going to be held to that.
