Archive for September, 2009
Service Businesses
September 27th, 2009 | 
Author: Due to the nature of service businesses, there are several alternatives regarding location. The location may be the place where the service takes place or it may be used solely for administrative purposes or it may be a combination of both.
The location is used to service the customer. There are many service businesses that are wholly dependent on being able to service their customers at their locations. Examples of these businesses would be medical offices, beauty salons, shoe and jewelry repair shops, dry cleaners, day care facilities, and professional (legal and accounting) practices. Although some of these service businesses could legally operate from a home location, they might choose a commercial location to be perceived as more credible and high-end by their clients.
In cases such as these, your considerations will be much the same as those of a retail business. Your location should be easily accessible to the customer, especially if your clients only use your service when the occasion arises and your business is dependent on consistently attracting new customers.
The location is used for administrative purposes only. These service businesses do not meet with their customers at their location. The office is used solely to do administrative work such as bookkeeping and arranging appointments to service the customers. Typically, this might be the case if you have a landscaping, house cleaning, plumbing, painting, or other type of maintenance or repair service. It would also apply if you have a mobile service business, such as screen repair, pool cleaning, or food catering.
If your location is not used to meet with your customers, it would be best to consider a low-cost location that will adequately service your business and that will not require extensive travel time to and from work.
Small service businesses can often benefit by having their administrative offices at home. However, cities and counties do have some restrictions regarding licensing of home-based businesses. Also, if you want to utilize deductions for a home office, you will have to abide by IRS rulings.
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Retail Stores
If you are planning to open a “brick-and-mortar” retail store, you need to be accessible to your customers. The question you should ask yourself is, “What locations are available that are frequented by consumers who are likely to buy my particular products?” The type of retail business you are in will definitely drive your decision.
If you are opening a grocery store specializing in Latino foods, you should consider locating in an area with a predominantly Hispanic population. If you are selling music CDs, you will probably need to locate in a shopping mall or strip center that has adequate parking as well as foot traffic.
On the other hand, if you are opening a sandwich shop to service students taking night classes, it would obviously be best to see if you can actually locate in an area in the school and adjacent to the classrooms.
- If you are buying an existing retail business: The business will already have a location. Before you buy, you should determine if the present location is a plus or minus for the business.
- If you are not also buying the facility, you will have to negotiate a lease agreement with the landlord. Be sure that you understand the terms of the agreement before you enter into it. How much is the rent? How long will it be in effect? Is it renewable? Who pays the expenses (leasehold improvements, maintenance, utilities, insurance, etc.)? Generally, it is best to have an attorney look over your lease agreement so that any issues can be resolved ahead of time.
- If you are starting a new retail business: Putting your business in the right location might be the single most important thing you do. No matter how good your products are, you will not sell them unless you can get the customers through the door. Assess your situation. Make a list of your location requirements population density, traffic patterns, access, zoning and permits, affordability, etc. Then you can search for available properties that will meet those needs. You can probably do a property search via the Internet. Alternately, there are business brokers who specialize in finding available property and helping you to negotiate a lease agreement. You can also check with the Chamber of Commerce in the area in which you wish to locate.
- If you are buying a retail franchise: You should have already evaluated the franchise in terms of the concept and product. Now it is time to look for a location. It should be visible to the flow of traffic and have easy access for your customers’ convenience. The franchisor will control the area where you operate and will most likely help you to decide on and negotiate the location.
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Decide on Your Business Location
Where will your business be located? Fifty years ago, almost every business was operated out of a commercial location. Skip forward to today’s world of technology and the scenario is very different.
In the first chapter of this book, you were encouraged to think about your own skills and interests and make a decision as to what kind of business you would like to go into. You also had to decide on whether you would start a new business, buy an existing business, or purchase a franchise. Once that decision has been made, it is time for you to choose a location (or base of operation) for your business.
Establishing your location is no longer a matter of checking for available commercial property and renting (or buying) the most suitable site. It is now a process of looking closely at your business and its particular needs for dealing most effectively with its customers.
A good way to begin the decision making process, is to look at the type of business that you are planning to operate and how the location will support the needs of your target markets. In other words, how will your location affect your efforts to reach your customers?
