Commercial Property Search: Choosing the Location of Your Business

What to Consider When Conducting a Commercial Property Search

When searching for commercial property, it is important to choose the right location to help ensure the success of a business. A commercial property search should take into consideration the following:

• Is customer accessibility important? If the business is a retail establishment or a restaurant, its location near retail centers and heavily trafficked areas is important.
• What type of space will you need? Consider whether you will need a warehouse, a retail space, or a space that can accommodate a food service business while conducting your search.
• What can you afford? The location of a facility will determine the price. Be aware that an expensive space may require charging higher prices to customers.
• Does the facility provide adequate services? The facility should meet the requirements of the business and the management should respond quickly to your needs.
• What other businesses are in the area? Take into account whether other businesses in the area will help attract customers.
• What is the occupancy rate in the area? A sparsely populated business area may indicate that the location is unable to sustain customer growth.
• Is the area safe? Consider whether customers and employees will be safe from crime.

Is Location Important?

The location of a business is not always important. Typically, the type of business determines whether location is important to success. For example, picking a good location is essential to a customer-driven business like a retail store or a restaurant. On the other hand, the location of a business is less important if customers will rarely visit the facility. For example, a business that offers services like gardening or pest control will conduct business at the customer's home or at a company's place of business, so location is less important. Consider setting up a home office if customers will not visit the location. This can mean savings in rent and a possible tax deduction for the home office space.

How to Attract Customers

Because customer-oriented businesses need to draw in customers in order to be profitable, it is essential to choose the most suitable location for the business. For example, a new business that is tucked away in an out-of-the-way location may find it much more difficult to attract customers than a business in a frequently trafficked area. The following are important considerations:

• Traffic: A high-traffic area can bring in customers because of its visibility to the public and because of its location.
• Convenience: Is the facility conveniently located near homes, offices, or commuter pathways? The easier it is for potential customers to reach the business, the more likely it is for customers to visit the business.
• Parking: Adequate parking that is near the business is essential. Some cities may even require sufficient parking as a condition of approving the location of the business. If parking is not free, consider whether it is priced reasonably.
• Similar businesses: In some cases, a similar business can draw in customers. For example, opening a clothing store near other clothing stores may bring in customers.
• Reputation of the location: How a neighborhood is perceived may attribute to the type of customers that visit. For example, because Rodeo Drive in Beverly Hills is known for its high-end shops, it generally attracts wealthy shoppers.

Rent Instead of Buying

Most start-ups rent a space to avoid the high cost of ownership. By choosing to rent, it is easier to select a location that is affordable and suitable to the needs of the business. Determine how much to budget for rent by comparing rental estimates with businesses in the area. A broker or a real estate agent can give advice on the typical cost of rentals in various areas.

Does the Facility Meet the Needs of Your Business?

When engaged in a commercial property search, it is also necessary to make sure that the rental can meet the needs of the business. This will depend on what type of business will be run from the location. If the business is a restaurant or a coffee shop, for instance, the existence of a kitchen in the space is essential because putting in appropriate plumbing and electrical infrastructure can be costly.

• Does the space have enough electrical power? Consider whether there is enough power to meet the needs of the business. A business that will utilize a lot of electricity from the use of heavy machinery will need to ensure that the facility can handle the required electrical output.

• What type of communication wiring does the facility have? Consider whether the facility has data lines. If so, is it connected to a fiber optic network or is it wired for DSL?

• Is the location zoned for the intended use? Make sure that the zoning will permit the operation of the business and the activity in the particular location. Avoid signing a lease until it is clear that zoning will permit the use.