Small Business Location - It's Not Who You Know But How They Find You!

INTRODUCTION:

If you intend to deal with customers face to face, then it is critical that you make a wise choice of location. I would though also stress that you still need to have a strong digital presence as you will want not only by-passing traffic to find you but also who search via the internet. Having many years' experience as a small business accountant and also having helped hundreds of owners through small business coaching Sydney, one of the biggest mistakes people make is choosing the wrong location.

So let's have a look at some of the basics.

Figure1: Location, location, location! Is your business in the right spot? Photo courtesy of Lara Scolari Gallery Balmain & Balmain Baz

1. type of location

Usually you will be looking to attract as many as customers as possible. So consider the following:

• will they be walking or driving?;
• would there be more if you were surrounded by similar or complementary businesses?
• would your target market fit the demographics in the area?

2. suitability

Consider your present and future needs carefully. If you intend to grow, will your premises allow for this? Putting option clauses into your lease term can therefore be very important. You don't want to be locked in for 5 years if after three you need to find somewhere else with more space. Where possible offer a 2-3 year term with an option to renew at the end of the initial period.

If you need a strong and fast internet connection make sure you do your homework.

Naturally check that local zoning laws allow you to operate your type of business.

Figure 2: If you're a seller of dog products, there is no better place to be than Balmain as every business welcomes owners into the stores - it's dog friendly and plenty of people own them!  Photo courtesy of Balmain Baz and Lara Scolari Gallery Balmain

3. consider the cost

When sitting down with your business advisors or small business accountants Sydney going through your three way budget, seek advice from agents and brokers about the cost of leasing or renting property.

It is often the case the better the location the higher the premium so you need to work out whether you are better to spend a little bit more of your budget on a better location which will ultimately bring in more sales than trying to save costs and bring in less customers.

4. example

Helen and Margaret want to open a shop that sells clothing and accessories to babies and children.

Having researched their demographics of their own area, they realise the majority of residents are uni students and young professional couples. Therefore, even if they found a good store with great frontage they would be unlikely to attract much interest.

After doing more searching they discover an area where more young families are living. The rent is cheaper and they figure that most parents will drive so that parking will be necessary.

They find the ideal spot with a car park which is located near a childcare centre. There is in the precinct a florist and gift shop, a clothing boutique and a cafe.

They revisit the three way budget they had prepared with their small business accountant Sydney and find that they will be slightly paying more than they expected but this difference will be more than made up by expected extra sales.

Over the next few years business is good and their small business valuation is rising dramatically. They decide it's time to put it on the market. Their business accountants explain to the that while the business sale will be subject to capital gains tax, they will be able to access the business CGT concessions and avoid paying tax on the transaction!

Figure 3: Have done my research so it's time to treat myself to a pizza!

CONCLUSION:

Whether you are looking to set up or if your lease is coming up for renewal, it pays to do some research and make sure you move into the right area.

Understand your demographics well and spend time finding a spot that fits your budget and what you are selling.

Not only should you make higher sales and profits, you will also find your business easier to sell for a really great price!