How to Choose a Right Business Location


Choosing a right business location is one of the most important decisions that every small business owner make. It needs extensive research, planning, looking at demographics, supply chain management, marketing competition, scope, tax ratios, understanding local and state laws, and much more.

If you already have selected the business idea and accomplished your startup business plan, then this article will help you to choose the best business location for your startup. Here are some helpful tips for choosing the right business location.

3 Tips to Choosing a Best Business Location

How to Choose a Right Business Location

1. Determine you business needs

Before you make any decision related to business location. You must determine your business needs. It is often seen that most small businesses select a location that provides good exposure to customers. But they usually ignore the less obvious factors that must be considered while making a business location decision. These factors are as follow:

Brand Image

Whenever you select places for business, make sure the location is consistent with the brand image. Don’t select any location that seems to inconsistent with the brand image.

For example: if you’re going to start a business that will be focused on quality conscious customers, then you should select a high standard area where high-class people live.

Market Competition

Market competition can affect your business performance and growth. So, you should determine that whether the market is competing or complementary.

Employees Availability

You should answer the question about employees’ availability in the proposed business location that whether the area has potential employees or not.

Future Growth

If you select a particular place for small business, then you should not ignore the future perspective. If your business will grow in future then you should think about the extra space because you may need it future.

Easy to locate

Don’t select any location for business which is difficult to find. For the convenience of the customers and suppliers, you should select such a place where people can easily find your business office.


Is your proposed business location safe for employees and customers? If yes, then it would be great but if not then you must go for another location.

Zoning Regulations

Zoning regulations are local or state laws that determine whether the business can operate in particular zones or not. If you’re unaware of zoning regulations, then you can hire local planning agency to find the best business location for your startup business.

2. Determine your Budget and Finances

Likewise determining business needs, evaluation of startup budget and finances is also an important thing that must be considered in decision making.

You should answer the questions that what you can afford, how much you can spend or what are the other financial considerations? Here are some other financial considerations:

Hidden expenses and costs

When you select a particular place for business then you don’t ignore the hidden costs like decorating, renovation, system upgrades, information technology and so on.


While choosing the best business location, you should pay attention toward the taxes aspect. You need to explore information about current property taxes, income and sales taxes.

If you find any particular zone which has high taxes then alternatively you can go for tax heavens. Tax heavens are those places where tax rates are comparatively lower than other places.

Wage Rates

Due to diverse economic conditions, different business locations have different wage rates for employees. So, whenever you choose the location for your business, make sure you have gone through all the wage rate trends mentioned by the state or local governments in the particular area.

Governmental Economic Incentives

Sometimes, governments usually offer economics incentives to startups in order to promote business culture in their countries. Startups can avail those opportunities by choosing a specific business location mentioned by the state.

In specific economic zones, incentives may be in the form of small business loans, free or low tax regions, low-interest rates, low property taxes, low utility bills and other financial incentives.

3. Determine your friendly business location

When you are done with determining your business needs, budget and state laws, you should also pay attention to surrounding environment of proposed business office.

Understanding the legal rules and regulations imposed in specific business locations is essential. In order to grow your business, you will have to work with local small business counselors or specialists. You also need to check that the proposed place is business friendly or not? For this purpose, you need to explore and check what types of programs are offered by the government or local community for small businesses.

Related: 10 Best Cities to Start a Small Business

Final Words

Do your market research. Meet and talk with other small business owners and relevant stakeholders working in the particular regions. Put your questions in front of small business communities and also utilize your free available resources like free governmental data and previous market surveys in order to choose the right business location.