People often write asking me to elaborate on pieces of articles I’ve shared so I’ve started a series to do just that. I may combine a few or leave a few out here and there, but I will cover the topics that people asked me to elaborate on.
I recently posted an article from Entrepreneur about common mistakes people make when launching a new company. The next of those big mistakes: choosing a terrible location for your business.
Location, location, location, right? Yup, and it’s not just for real estate.
When you start building your business, one of the key factors for success is going to be making sure that your business is located in the right place so that your customers can find you and repeatedly get to you easily. For bricks and mortar retail locations or restaurants, this should be obvious. There is a reason that retail space rents are much higher in certain areas than in others – more businesses want those locations because it’s easier to attract customers into your business if you’re located somewhere that those customers frequent.
Depending on your business, it may also be important that venture capitalists are nearby. Most VCs fund startups that are located within about an hour of where the VCs are. Whether that’s because they don’t want the hassle of distance, they feel they know their own area better, or they simply don’t get introduced to entrepreneurs that aren’t in their own geographic area, the fact is that if you intend to raise venture capital money it may be advantageous to locate your business in an area where there are a number of investors whom you’d like to target once you begin raising funds.
As you begin planning for your new business, be sure to think carefully about the best location to set up shop. Carefully analyze who your target customers are, where they are, and where you should locate in order to get access to them. If you need some help working through identifying your target customers and doing the market research necessary, stick around until the end of this video to get links to a couple of my previous videos that will help you through the process. Once you know where you need to be, analyze what it will cost you open your doors in that location and be sure to include these realistic numbers in your financial projections and budgets as you plan. You’ll be setting yourself up for failure if you do your calculations based on average retail space prices in your city if it’s pivotal to your success that your store be located on the most expensive street in your area.
If your business is an online business, be aware that location is just as important as it is for a bricks and mortar shop. You’ll need to carefully choose your domain name and all of the online communities, forums, and social networks where you’ll have a presence. Again, study up on where your target customers spend their time and make sure that you locate your business’ presence in those places.
It would be a shame for you to spend time, energy, and cash building your dream business just to see it fail because you didn’t give its location the consideration that it deserves.
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Thanks for watching and I’ll see you next time on New Venture Mentor.