West Virginia Department of Commerce Choosing a Business Location

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Choosing a Business Location



Going Into Business in West Virginia
GOING INTO BUSINESS IN WEST VIRGNIA    

CHOOSING A BUSINESS LOCATION

YOUR CHOICE OF LOCATION should be made early. Base your decision on the types of products or services you provide and your target market rather than your personal convenience. Target market satisfaction is your most important consideration; your customers must be able to reach your business easily, safely and pleasantly. Other considerations are competition, sources of supply, availability of labor and square footage costs.

Business legend has it that if you build it, they will come. Building it, however, requires time and capital — and there’s no guarantee that anyone will ever come. That’s why smart business owners seeking a new or startup location study up on a subject they probably haven’t touched since seventh grade: geography.

Your business location can make or break you, whether you own a restaurant, a retail shop or even a service business. Your company’s image, your dependence on commuter or foot traffic and your budget all play a role in finding the best spot for your business. Finding the right location can:

1. Drive customer traffic.
2. Attract employees.
3. Increase credibility.
4. Make you more competitive.

LOCATION EVALUATION

One of the most effective ways to evaluate a location is to do a map analysis. Draw a map of the area in which you wish to locate; make some copies and a transparency. On the transparency, indicate the location sites available to you and number them. You will be coding information onto the duplicate maps. For instance, take a duplicate to the police department and ask about crime rates. Shade in the high crime areas on the duplicate. Use your transparency to see if any of your potential locations fall within the high crime areas. Here are some other areas of information you should gather on your duplicates:

Market: Shade in the areas in which your target market lives, shops and/or works. Lay it under your transparency to see if your customers will be able to reach you easily.

Competition: Find out your competitors’ locations and try to determine their sales volume. Most businesses try to distance themselves from competition, but some types of businesses, such as restaurants and auto dealerships, seem to have great success in clusters. Service businesses succeed when they locate near a main support facility. Consumers expect to find such services in these areas, such as doctors’ offices near a hospital or clinic.

Sources of supply: Manufacturers need to be close to suppliers and to consider transportation, labor and power costs.

Labor force: Another location consideration is employee availability. The prevailing wage rate in an area can affect your cost of doing business. Also if you run a technology firm, consider locating in an area with other high-tech businesses so you can tap into a qualified labor pool.

Cost: Space for minimal rent is not always the best reason to choose a location. Why is the rent so low? Find out about a location, how long it has been available and the history of the previous tenants. If turnover rate is high, it may be considered a “bad location.”

Some other cost considerations besides rent or mortgage are the following:

• Will you need separate insurance from the rest of your business?
• What fees and taxes will apply to your business? Check with the county clerk and city hall where you propose to locate.
• How good will this location be in two years? five? 10? What could change the desirability of the location?

Lease agreements: Read your lease agreement carefully to make sure you understand all the aspects of it. Seek counsel from an attorney to determine if the agreement suits your needs. Other things to consider:

• The length of the agreement.
• If your business fails, will you still have to pay until the lease is over?
• What share of the utilities will you have to pay?
• What insurance coverage will be expected?
• What agreement can be reached regarding renovations and additions (adding or removing walls, adding an awning, adding a sign, wall hangings or fixtures, etc.)?

Access to your location is also a prime consideration. A business location should be easy and safe to enter and exit to and from traffic. Often areas with a high traffic count are difficult to access because of factors such as one-way streets, center islands on divided highways and simply too much traffic to make it worth the stop. To get a traffic count for your proposed location, call the West Virginia Division of Highways Transportation Planning Division at 304-558-3505 or visit their Web site.

Before beginning your location search, list your present requirements and try to project your future needs. If you plan to grow, will the location expand to suit you? Take your time to make your decision.

I require now

1.

2.

3.

4.

5.

When I grow, I will need

1.

2.

3.

4.

5.

Location is important. You need to be where your market can reach you and you can reach your suppliers easily and as inexpensively as possible. Here are some further tips:

• It’s important to choose not only a profitable location, but a safe one, too. Before committing to a space, research the neighborhood to make sure it’s well-lit and welltrafficked.
• Be aware of your space requirements. Hotels, restaurants, retailers, manufacturers and offices all require different things from their properties.
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Going Into Business in West Virginia
Going Into Business in West Virginia
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