Building a business demands strategic thinking to ensure its best chance of success. You may know your industry inside out, but if you haven’t got the necessary experience to manage operations, it takes great foresight and planning to navigate the potential pitfalls successfully.
You’ll face many significant decisions on your journey, and one of the crucial factors is where you'll base your operations. So, let’s consider some location decision-making strategies to help ensure profitable company performance.
Why location is important for your customers
The simplest answer: visibility and access.
If you’re selling to the public or a niche market, you must be accessible to your customers. For tradespeople, retailers, transport services, food vendors, hoteliers, and more, you need to be where your service is in high demand.
You’ll need to consider your market too. If you’re offering a high-end legal service, it makes sense to be situated in financial and business districts. Not only will your location remind those businesses around you of your service, but it also suggests success, affording to operate in what’s likely to be a more affluent and prosperous environment. Diversely, cafés and coffee shops are better suited to more affordable, heavy-footfall social settings. In contrast, wholesale or major retail outlets are better suited to retail parks and industrial estates with easy access and plenty of parking.
Should you consider operational clusters as part of your location planning strategy?
Did you ever wonder why you tend to see multiple car showrooms close to each other? Where one marque can appropriate customers from its competitors, it sustains healthy competition and keeps choice high amongst customers.
It’s the same in our industry; hotels in densely packed tourist areas, where the market is most popular and attractive to visitors, can easily pick up the overflow from their fully booked competitors.
Whatever you trade with, you should consider the population, economy, community, and market of each area and the likelihood of it meeting the needs of your business.
Why location is important for your teams
On the flipside, talent retention and attraction will build the quality of your operation.
You’ve got to offer promising new talent what they want, and that depends on what your perfect employee persona looks like. So, just as you’d develop customer personas and profiles in marketing, considering your ideal employee persona will help you pick a location that offers the work-life balance they’re looking for.
Without delivering such a proposition and appealing to fresh talent, a business could soon become stagnant, whereas attracting energetic and experienced talent could be the angle that expands your skills base, adding successful revenue streams.
Why location is important for profit
How you budget your operation will often determine whether you sink or swim.
Real estate efficiency and cost – As the second highest cost (after staff and labour), can you apply a little cost-cutting through well-researched locations without dropping access and appeal for your customers and staff? Geography regularly plays a huge part in the cost and value of your location investment.
Accessibility – It’s not always access to customer footfall we need to consider; if you’re in manufacturing or wholesale, you’ll need sufficient space for transport access, loading and unloading substantial deliveries at all times of the day or night. If your operations demand face-to-face meetings, site visits, conferencing, or negotiations, are there enough transport links and amenities close by to make your business an attractive proposition?
City dynamism and funding incentives – For up-and-coming areas in modern, affluent, creative, and hi-tech industries, financial incentives are often available to help new businesses set up or move headquarters, offices, warehouses, and factories into advantageous alternative locations.
International locations – For organisations with exceptional budget or accounting needs, is it worth considering an international office, HQ, or offshore centers, to take advantage of alternative regulation and tax implications?
Location is just as essential in the service and hospitality industries
We’ve touched on why business location is vital to customers, so for hotels, hotel management, tourist and holiday lets, ideally, you need to be close to visitor attractions.
If you’re aiming at a lower-budget tourist, that might not be possible, so your location needs to be close to the transport links, maintaining a connection to the same sites and attractions but within a more affordable price range.
There are also opportunities for those willing to stray from typical markets. For example, some hotels may never have hosted a single tourist in all their time in operation; if they’re close to conference or exhibition centres, and financial and business districts, their business model may revolve entirely around professionals and corporate stays.
Accessibility to attractions and amenities
Real estate spend
Filling gaps in the market
Niche opportunities for specific social and business communities
Regarding Airbnb management and serviced accommodation management style companies, you may not always need to be central to your properties. If your process is suitably automated, or you don’t carry out any hands-on work yourself, you may be able to oversee operations remotely from almost anywhere. As long as you can put the necessary services in place to keep your lets in prime condition for each new guest, you may be perfectly placed wherever you are. Perhaps setting up a concierge service in locations with multiple lets of apartments and houses that would suit a particular type of visitor in specific locations, one where remote or app-based assistance doesn’t quite match guest demands.
Is location still important to internet-based businesses?
Only you will know the answer to that. Each business and its operation are unique. Online operators can work exceptionally well remotely, whereas other operators require their teams to work in situ, completely connected, and local to any specific needs they must fulfil.
So, why is location important to business? As we’ve learned, it’s essential to happy and healthy staff, customers, budgets, ease of running, and our operational needs.
When it comes to location planning—whether you’re in property management or any other line—carrying out crucial research is essential to success. Keeping customers and staff connected and content is just as important as keeping your accountant happy, after all.
Whatever your operations entail, choosing the right location for branches, outlets, headquarters, and offices isn’t something to be taken lightly. Making the right decision can impact growth and change, future-proofing your business; therefore, ensuring a suitable business location strategy is a must in such a competitive world.