How to Choose the Best Location for Your Business


“Location, location, location” is the classic rule for real estate business success. It might sound easy enough, but choosing the right location for your business is one of the most challenging decisions for entrepreneurs to make. The most obvious is to open your business where your customers live. That said, here are several factors beyond the obvious to consider:

  1. Demographics are in the details.

Know how your product will fit in with the needs and demographics of the area’s population. For example, if your boutique sells high-end designer shoes, you should locate your business in an affluent area. Consider daily population fluctuations, as well. If you are a restaurant that needs a strong lunch crowd, your business should be located in an area with many employers, rather than in the middle of a bedroom community.

Another factor is distance. Many shopping centers (especially those with a supermarket anchor) pull customers from a one- to three-mile radius. However, shopping centers with a big-box anchor or destination store (Costco, Target, etc.) typically pull customers from much farther.

  1. Know your neighbors.

If you’re looking at a shopping center, be sure to find a tenant mix that attracts customers similar to yours and complements your business, with the most emphasis being on the anchor since that’s the business that will pull in the majority of the center’s customer base.

In addition, seek co-tenants with similar operating hours as your business. You don’t want to be in a shopping center where most of the tenants close at 6 p.m. while your business is open until 10 p.m., because there will be significantly less traffic in the evening.

  1. Determining the right size.

Precise planning is key to figuring out how much square footage you need to support your business’s products, fixtures and levels of inventory. If the space is too large for your requirements, you will be paying unnecessary rent and utilities; if it’s too small, you might not have enough room to fixture your store and stock your shelves with the right product mix your customers want. If possible, work with an architect and space planner to help you optimize your layout and determine exactly how much space you need for your business.

  1. Think inside the rectangle.

Much like space, the shape of the store is also important. Some businesses, for example and accounting office, can be more flexible with shape than others that might have specific layout requirements. Generally, however, the industry’s average-shaped space is rectangular — 80 to 100 feet long, and anywhere from 15 to 75 feet wide—which typically enables owners to use the space well and facilitate good traffic flow.

Another often-overlooked factor is column spacing. This can make or break the layout because the columns will dictate where fixtures can and cannot be placed, sometimes creating a dead space. Walk through the site, noting its shape and column spacing. Obtain an architect’s layout to help you plan whether and how your layout requirements would work in the location.

  1. Impulse of Destination?

Many small business owners think they need to find a location with large signage capability and high street visibility. However, visibility typically comes with a higher rent. To decide what’s right for you, we recommend identifying whether your business offers impulse buys or functions as a destination store.

An impulse business is one in which customers see the shop and decide to go in on a whim, such as a coffee shop or fast food restaurant. As a result, impulse tenants should have high visibility from the street, and be located in high-traffic areas so customers can easily swing into the parking lot and get what they want.

Destination tenants, on the other hand, are doctors’ offices, professional services offices and hair salons, with customers who have appointments to go to them. These businesses can be located farther back in the shopping center.

  1. Parking ease.

Your location should have the right amount of parking to support your customer flow. Additionally, it’s important to be aware of the businesses next to you that will utilize the same parking. A pack-and-ship store will not do well next to a health club because the parking field will be full during certain hours and have little turnover. It’s important to locate next to complementary uses and parking demands.

  1. Corral the competition.

Knowing the level of demand for your trade or products in the area will determine how close you want to be to your competition. Map out your competitors’ locations in the area and consider if your business will benefit from having your competitors closer or farther away. Many owners consider competition as a boon for business, causing you to continuously improve your offerings to sharpen your competitive edge. On the other hand, some owners would rather fill an unmet need in a community by locating their business far away from their competitors.

  1. Calculate closely.

It’s important to have a business plan, take the time to go through it, and identify and calculate all the cost factors of your business, including rent, utilities, taxes, maintenance, and salaries, among a few. If possible, seek the advice of a professional accountant, who can help with your business financials, or a professional real estate broker, who can help you find the right location for your business.

For more information or help finding the best location for your business, contact the Economic Development Collaborative-Ventura County. Conveniently located in Camarillo, California, we’re here to help.


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