Why is Business Location Important?

Table of Contents

As an owner, choosing a physical location for your business is one of the biggest decisions you will make. Your business location is hugely important to your success. Why? It affects a number of outcomes:

  • Your prices
  • The efficiency of your supply chain
  • Your workflow.


Location affects your price. People will pay a higher price if the situation demands it. ie. A vendor at a summer festival selling water vs. the corner store selling water.

Your price is also dependent on the community you are in. What are the buying habits of the people close to your store? People living in an affluent neighbourhood of a big city center are going to have a different perspective on your price than people in a rural small town. It’s important to choose your location based on your customer perception of your product.

Supply channels

What do you need to keep on hand to maximize efficiency and deliver your product or service to your client? Location is an important factor in making warehousing decisions.

Keeping too much inventory, too far away, with too many steps to retrieve it needs to be weighed against not having enough inventory and risking losing the sale. What is the cost of handling products as they move from the warehouse to being sold?

Consider both the ease of purchase your client experiences to acquire your product and your ability as the seller of that product to have it in stock. Small shifts in how these “places” are set up can significantly improve the flow of goods and create a better buying experience for your customers. All of the elements of location impact the financial health of your business.

Business owner looking at what factors to consider when choosing a supplier

Operational workflow

Checking landlord references and with previous tenants can save you huge future heartache and frustration.

Consider the restaurant owner that opened a third location in a seaside town close to the beach. On the surface, everything looked perfect. However, had she checked with the previous owner, she would have learned that the chronic ant problem in that building had forced them out.

Chances are you have enough going on without having to worry about a noisy neighbour, a leaking roof, unstable Internet or a vehicle that breaks down. Take your time and do extensive research before making decisions about the infrastructure that you need to set up to run your business.

Until next time, enjoy your Entrepreneurial Journey!

Beverlee Rasmussen e-signature

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