Location Can Affect Your Business

In the past and recent years, business owners had controversial conversations regarding how location can affect your business in one way or the other. However, while business experts have said that location is a ‘big’ factor hindering a company’s success, there are business owners who are yet to accept this as a fact rather, they take it as a false claim.

Most individuals will prefer a commercial area over a residential area, and others a residential area over a commercial one. But the truth about choosing any place for a business depends on the nature of the goods and services.

This article addresses this and shares every detail you need to know concerning how location can affect your business.

Can Location Affect Your Business?

Yes, location is one of the major factors that affect business productivity. Since I have claimed that location is a factor that affects business productivity, later in this piece, I will explain how location can affect your business.

How Can Location Affect Your Business?

Following the statement – Location can affect your business – Here are some ways that the location of your business may be influencing the outcome.

Transportation Systems

A location can affect your business in terms of transportation systems. If your business deals with delivering goods to consumers after production or importing and exporting goods and services, poor means of transportation and transportation facilities, such as poor roads, bad railways, and others, will become major factors in choosing a location. Your company may not do well in distributing its goods and services to consumers or importing and exporting goods on time unless these factors surrounding transportation are favourable.

If your company is experiencing such, you might need to consider changing your business location to where you can reach out to your consumers without getting hindered by a poor transportation system and also import goods faster to help produce more goods and services on time for consumption.

Poor Communication

In everyday business, communication is important.

There are times when a consumer wants to inquire about a company, but due to poor communication, certain information is not publicized or not fully publicized.

Poor communication can be due to a business location; for instance, if the business place is in an area where the internet connection does not actively flow, you are likely to lose some of your consumers. This will deprive you of some money you should have made for your company as your gain.

Reduction In Demand

Another effect that location can pose on your business is a demand reduction.

When this happens in businesses, the affected company starts to experience fewer consumers being active in demanding services.

Now, this happens because most of your consumers may not be able to access your location or means of ordering goods and services. Therefore, they will even prefer purchasing the demanded items from your competitors because they can reach them more easily.

More Competition

Another way a location can affect a business is by having more competition.

Understandably, every legal business stands a chance of having others competing with them, but location can be a driving force behind this.

If your company sells phones and phone accessories, and where your company is based has other firms also into selling phone accessories and phones, the rate at which people will purchase from you will be lower, except you strategize your business plan to make you unique and stand out.

Increasing Costs

Depending on your business location, there can easily be an increase in your products and services.

Let us say your business was always purchasing its raw materials from a very close firm, and something happened that your business could no longer rely on purchasing its raw materials from this firm close to you and had to extend its purchase to the firm further away. Now, after production, will there not be an increase in your services due to the cost of transportation of bringing in the raw materials? Of course, there will be. This may also cause most consumers to stop purchasing your goods and services.

Importance of a Location in Businesses

Just like I have addressed how a location can affect a business in many ways, below are reasons why location is most important in any business –

It brings about an increase in demand
It helps in communicating faster and more often with consumers
It promotes sales
It reduces the competition in businesses
It brings more awareness about a company to the public
It advertises a company even without the company paying for such services.

Factors to Consider When Selecting a Location for a Business

In choosing a location for your business, there are some factors you need to consider that are very important. Also, considering these factors might affect your business plan. Hence, you need to be so careful.

Below are factors you need to consider while choosing a location for your startup –

Where your raw materials are gotten
The nature of your business
Who are your consumers, and where would they love to purchase goods from
A less competitive area with a higher sales rate
Communication with your consumers during business hours without interruptions and altercations.

How to Choose the Right Location for Your Business

Make plans for your business’s nature and which location is best for it
Access an area before settling in terms of checking the competition and the sales rate
Consider where raw materials will be purchased, if your company requires one
Pick a location that favours your consumers and issues them that welcoming environment
Consider where your company can recycle waste items too

Frequently Asked Questions

Is Location a Key Factor of Businesses?

Yes, location is a key factor in a business. It can help promote your brand or downgrade it.

Will a Location Affect My Business Productivity?

Yes, a location can affect your business productivity in different ways, such as bringing in a scant quantity of raw materials and making your business produce a lower quantity of goods.

Can a Location Cause a Change in A Business Plan?

Yes, more than a thousand times, a location has made many business owners switch the plans they had for their business to something very different.

Posted on March 14, 2023 under Business, Education

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