Lesson 6: Choosing the Right Location
What You’ll Learn: In the old days, a new business meant a storefront. But now storefronts can be virtual, new business enterprises can be run out of a spare bedroom, or they can move into a makerspace or co-working space to build partnerships and synergies with other startups and small businesses. We’ll examine the many options and walk you through the good, the bad and the ugly of each.
Choosing the Right Location (continued)
The Away Game
Not every business can be run out of the home, even in its earliest days. In the past, this meant renting a commercial or retail space. But these days, there are lots of different options to explore, and conceivably your business could move through several of these options as you grow.
In making a final decision, here are some things you want to consider:
Branding. Will the location be consistent with the image you’re trying to create or maintain? It may not make sense to open a hip coffee café across from Starbucks or a dollar store in an affluent neighborhood. Location can influence how your brand is perceived, and you want your location and brand to align as much as possible. Our SizeUp tool can help you with this.
Competition. Who are your competitors and where are they located, especially in terms of potential customers? Remember that your competitors may not be the obvious ones. You may be the only Mexican restaurant in town, but other eateries are also competing for your customers’ discretionary income. Commerce’s SizeUp tool can help you assess the complete competitive landscape.
Local labor market. You can find the ideal location, but without the right workers, you are courting failure. Before you sign on the dotted line, make sure there are workers within a reasonable distance to meet your current and future needs.
Growth potential. If your business is going to grow, can the space grow with you? Going from a coworking space to commercial space is relatively easy, but it’s not easy to kick out a wall in a brick and mortar retail space when you need to expand.
Zoning. Make sure your space has the right zoning for the type of business you plan to operate. While you’re at it, see if there are any local, regional or state projects in the works that may involve the property. You don’t want to move in and then find out that the landlord is selling the property to a major developer who has other plans.
Safety. No matter how wonderful your business is, potential employees and customers will shy away from you if you’re in an area where they don’t feel safe and secure.
Hidden costs. Few spaces are turn-key. Identify any hidden costs related to renovations, signage, broadband connectivity, upgrades, etc. You may want to have an attorney look at the lease to make sure you cover all the bases before agreeing to a lease or purchase agreement.
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Coworking Spaces
A coworking space is a shared workspace. This option allows you to have the perks of a regular office – meeting space, office equipment, a kitchen, and sometimes administrative support – in a convenient space shared with other small business owners. This proximity to like-minded professionals opens the door to new partnerships or even clients. Coworking spaces can also combat the feelings of isolation and loneliness some feel when working at home.
One of the great things from a startup standpoint is that you can choose a coworking space plan that meets your needs and budget. You can start with a shared desk space to save money and move into a private office as you grow. Rentals are by the month or year, depending on the coworking provider and its business model. Many coworking spaces offer ala carte services, such as a virtual receptionist who will take messages or a package reception service.
Coworking spaces are ideal for freelancers, gig workers, startups and entrepreneurs who need a professional office space at an affordable rate. It also works well for home-based businesses in rural and suburban areas that need to meet occasionally with clients in urban centers.
Commerce has an online map of coworking/maker, incubator and accelerators to help you find one near you.