Find the Right Location for Your Business

Convenience is critical to the success of many products and services today.

Most working people have more money than time.

When you ask them to buy from you, they will measure how long it will take them to find you, find out about your product or service, buy it and get home.

They will also judge how long it will take them to accumulate enough information about your category of product or service in order to be comfortable making a purchase decision.

And lastly, they will evaluate how easy it is to pay you.

For many new entrepreneurs, the location decision is left until the very end of the marketing planning process, if it is addressed at aft.

This can be a critical mistake.

For one thing, the location you select can profoundly influence the size of your new business’s overhead expenses. Pick too much space; you pay now for the ability to grow quickly in the future. Select too small of a space, you may lose the ability to handle a growing number of orders with subsequent loss of sales revenue.

If your location is inconvenient you may well have to substantially increase your promotional budget to convince customers to go out of their way to buy from you.

There is a promotion on the radio for a Chicago-area men’s wear store that advertises itself as “inconveniently located.”

Be aware that this store enjoyed many years of word of mouth promotion before it dared to run this commercial. You cannot afford to be obscure in a new business!

Two Location Decisions

For many home-based businesses, the decision about location seems easy to make: handle the business’s sales and marketing out of your basement or den.

Starting at home can certainly lower your initial business expenses, as well as provide a quality work environment.

But before you become overwhelmed by your keen desire to keep costs down, stop and think about two decisions from the point of view of your desired customer: the location of your office and where you will deliver your product or service.

Question number one should be: will I need to meet with my customers/clients in my office?

  • Is it customary in your business to have working sessions where your customers come to your office?
  • How important is having access to your computer during the sales presentation? Are there samples they must select from?
  • Do you have inventory for them to pick from?
  • Will they bring in goods to be repaired?
  • Clothing to be fitted?
  • Many of these selling and production functions can be done “in the field” but you must plan carefully if you want them to come off as professionally as a home office presentation.

Question number two should be: Once you have persuaded a prospect to buy, how do they go about ordering from you?

  • Convenience when ordering is particularly important to customers today. And how will you deliver?
  • Keeping delivery promises is critical to getting a new business off of the ground. Think way beyond the first few orders.
  • If you were to receive 50 orders for delivery all in the same week, how would you physically do it?
  • Sit down before you launch and write down each step you must complete in order to get one order out on time.

Then determine what resources, such as equipment, fixtures and people you will need to repeat this process 50 times in seven days.

Customer Ordering and Delivery

Some of the more common techniques for handling customer ordering include:

  • You take the order when making the sales call. You must have a reliable method for quickly and accurately recording the customer’s desired order.
  • Customers order through the mail. Without a disciplined system, you can lose orders forms and checks from mail orders.
  • Clients order over the telephone. Increasingly, customers expect to be able to call for free to place an order. Fortunately for small businesses the cost and availability of 800 toll-free phone lines have improved substantially.
  • Customers order by computer or telefax. This is a tricky way to receive orders. If your desired customers expect this method, seek some professional advise before setting up your system.
  • Customers order personally. This is the heart of retailing – getting the customer to walk through the door and walk out with a purchase. Be careful when you hire sales help. Will they professionally represent your company, particularly when you are not in the store?

There are also a number of options for delivery of your product or service:

  1. You personally deliver to the customer. Many home-oriented service businesses deliver this way. It is an excellent opportunity to make a lasting good impression; or a risk of destroying your credibility. So be careful.
  2. The product is delivered by U.S. mail, UPS , Federal Express, etc. Shipping costs can add up quickly, so make sure that your pricing effectively recovers your shipping costs. Don’t be afraid to ask more for overnight delivery.
  3. Your customer picks up the product. If you are selling a consumer item to your neighbors, this can be a delightful way to get to know your customers. But be aware, you can get stuck at home waiting for tardy customers.
  4. You deliver your service electronically. Many business-oriented services, such as credit checking can be effectively delivered by modem.

Buying Outside Space

Sometimes you are well advised to find office space outside of your home. Some common reasons for doing this include:

  • There is not enough room to store product at home.
  • You must meet regularly with customers in your office
  • You need space for an employee
  • Your business violates zoning laws
  • You may create an excessive insurance risk working at home
  • Your regularly require office support services, such as secretarial work, phone answering, desktop publishing, etc.

To steer safely through the minefield of office leasing, observe some tips:

  1. Start looking for space by drawing a 1-mile circle around your house on a local map. Cruise the main streets in this area looking for attractive office buildings. Stop, go into the lobby, and write down the management’s phone number or drop into their office. Ask what size offices they lease. You are usually looking for 100-150 square feet. Ask for floor plans and services available. They will not usually quote you a price without a formal presentation by the leasing agent.
  2. Commercial real estate agents and leasing agents always work for the lessor. Be Close-mouthed about your financial ability when you first meet them. They can obtain a credit report On You if they want to know more.
  3. Office rent is quoted on a “Per square foot” basis. To calculate square footage, you multiply the width of the office by the length. Then multiply this number by the rent per square foot, say $18.00. Divide by 12 to get the monthly rent.
  4. Be aware that there may be additions to the base rent. Many buildings apply a formula to each office’s rent for real estate taxes and maintenance of common areas. When the base amount is exceeded, usually by an increase in the taxes, you are asked to pay your share of the increase. This is often called a “tax stop.” Ask about this before you evaluate the cost of the office.
  5. Think about parking for your clients. How many spaces are there and how close are they to your front door?
  6. Examine visibility. How easy is it to see your building from the street when driving 45 mph?

If you feet that your new business requires outside space, but your budget is very tight use some imagination.

There is a lot of office and industrial space around. You could; for example, approach larger companies to see if they will rent you a small office only to use at night for say $75 per month. Or perhaps you can share one office with another small business.

Often if you go into a shared services office building you can receive free months of rent for bringing in other new small business tenants. Try trading some of your product or service, such as accounting, for a couple months of free rent.

Remember, you should make your location decision not primarily based on what is the cheapest or the most convenient for you, but based on what is most convenient for your customers.

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