When it comes to the success of your small business, it may well turn out that it’s all about location. Based in part off of an article on CNNMoney, this post will focus on the importance of where you open your physical store(s) and what state you start your business in.
Location, Location, Location
If you can afford to, get a prime real estate location for opening your small business. Do the math and see what area you can afford to put your business’ name at. After balancing out where you can put your money, it could definitely be worth it to make a stretch for a better location. Advertising can be expensive, and if your store is out-of-the-way, out of eye’s sight, and hard to find, you’re going to have to spend even more time, money, and effort to advertise your business. When you get a better location where your store’s sign can be seen from major roads, you don’t have to spend as much money advertising because a lot of that job is taken care of simply by location.It’s not wise to get over your head in a lease for a location that you simply cannot afford. This is where wise planning and projections are crucial. Be honest in how much money you think you can bring in to support the location you choose.
Do your research beforehand. Go see for yourself the shopping centers where you know people go to. Where are locations that seem customer-friendly and will provide you with a great business opening? After you have a few spots in mind, go there and talk to the other business owners who have stores in the area. You may be able to find out how much they are paying for their location and get any tips or advice that could persuade you one way or the other. Also, put yourself in your potential customers’ shoes. If you were them, how would you find out about your store, and where would you expect to find your store? Where would you shop for your product and what location would entice you to actually go in the store?
Because you know your business the best, draw out what type of location you need and will bring you the most success. If your business does not interact with clients much or doesn’t rely on customers physically coming into the store, then having your business easily accessible to and visible by the public may not matter as much. Proximity to distributors or other partners or even transit and shipping areas may be much more important. If your business mostly relies on people physically coming into your store to purchase your products, then an easily-visible, friendly location may be everything to you.
No matter where you open your small business, there is a risk involved. Being an entrepreneur is not easy, but if it were then everyone would be in business for themselves. According to the article, states such as Arizona, Texas, California, Colorado, and Alaska make up the top five most friendly startup states. Missouri, Nevada, Vermont, Idaho, and Florida follow closely behind.
So what makes these states so startup friendly? One of the first and main reasons is that, in general, business and property taxes in these states are lower than others. Texas, for example, does not have personal or corporate income tax. Alaska does not have state income or sales tax. Nevada has no business income, estate or franchise tax, and income taxes are also low. Another reason is that worker’s compensation costs are also lower, such as in Arizona, which means less payout from small businesses that do not have a lot of capital and income to work with at first. Colorado even has a state-funded training program for business owners.
A growing population, such as in Texas, also helps to create more jobs, and when a growing population is coupled with universities that churn out graduates educated in areas such as science, technology, and business, you have a recipe for startup success.
Some states, such as Nevada, have streamlined the process for small business owners to get up and going. The easier and less expensive it is to start, the more people will be attracted to giving the entrepreneurial rout a shot. Other states, such as Florida, have reduced regulation and business taxes, which is a large draw.
Wherever you decide to start your small business, do the necessary research before you dive in. Every state is different in how they try to entice small businesses. Some states, such as California, are much more friendly to small businesses than large ones, so keep growth in mind as well. Your business’ needs will largely determine location.
Click here to view the CNNMoney article