Selecting the location is one of the key factors in the process of starting up a company. This decision is very important in certain sectors such as the shops and the personal services where the customer is the one who goes to our premises to get our product or service. In these cases, a good location can determine the future feasibility of the company.

In other sectors, such as the industrial, other aspects are more relevant, as the need to be close to the suppliers, to logistic centres or the compliance of certain especial requirements of the premises.

Therefore, for one or another reason, the suitable choice of the location will condition the company in the development of its activities in the future, so it is worth thinking carefully the different existing possibilities, once we have identified the factors that will influence our decision.

Possibilities:

×       Home address: it can be suitable for certain professional services such as engineers, architects, etc.

×       Shared places: office buildings with shared spaces.

×       Business incubators: shared spaces for offices, usually under public tutelage, aimed at start-up companies

×       Industrial areas: industrial states or parks

×       Peripheral shopping areas: suburbs, residential areas

×       Central shopping areas

×       Shopping centres

Factors influencing the choice:

1. Special needs of the business

Examples: industries, and even more if they are susceptible to produce pollution, due to the regulations, they should be placed in industrial areas out of the cities; hospitality industry requires places with special features, such as smoke extraction, soundproofing, etc.

1. Population density: the more specialised our offer, the bigger size should be our target market.
2. The customers’ purchase habitudes: example: for the fresh products, the consumers prefer the traditional shop, close to their homes, but for the rest of every day products, they choose hypermarkets.
3. The competitors’ placement: the competitors’ closeness might be positive or negative depending on the activity sector. In the sectors where the consumer compares before choosing and he/she also demands variety, the trend is that the competitors are close to each other, for example, the clothing shops.
4. Customers’ traffic: we are referring to the intensity of people belonging to our target market passing through our business, either on foot, by car or public transportation. High customer traffic will always make a placement more attractive.
5. Possibility to park: if we are in the outskirts or our products are bulky, this will be a factor to be considered.
6. Linked purchases; there might be interesting synergies between companies with products or services that can be considered as complementary and that are next to each other.
7. Access for suppliers, the company staff: a good access is always advisable.
8. Economic availability: the price of the rent or purchase, the need or not to perform refurbishment works.
9. Selection of premises: in certain areas the availability of premises is very limited.
10. Chosen formula: rent, purchase of premises, or purchase of business.
11. Possibility to rethink the idea: the higher the initial investment on a building, the lower will be the possibility to change the place. The possibility to cancel the rent contract will also depend on this.
12. Need to be close to collaborating companies: it is usual in sectors such as the automotive, where suppliers’ parks are created around the company manufacturing vehicles.