Tips for Choosing a Business Location

U.S. Small Business Administration

The ideal location for your business depends on a number of factors. The most important consideration is the kind of business you're running. Before you begin scouting a location, consider a few of the factors that can help you select the right location for your business.

Determine Your Business Activity

Your business activity is an important determining factor of where your business should be located. Answering the following questions can quickly narrow your location choices.

• Do your customers come to you?
• Do you have to go to your customers?
• Do you have employees?
• Do you manufacture products for distribution?

If your type of business depends heavily on pedestrian or drive-by traffic, such as a florist, gift shop, or clothing boutique, you'll want to seek popular retail locations, such as a downtown area or a mall, where there are few restrictions on signs that can help attract passing customers.

If customers typically seek your type of business, such as a child care service, beauty salon, or fitness center, you'll want to find space that is easily accessible from population centers, major roads and public transportation.

If your customers do not typically come to you, other location factors may be more important than physical proximity to your customers. For example, if you conduct much of your business online, establishing a home-based business might be more desirable and economical than leasing commercial office space. If you manufacture products for distribution, an ideal location might be an industrial park near major transportation ports.

Ease of Access

If your business is a customer destination, consider how people get around in the area where your business will be located.

• If you are scouting a location in a suburban area, most people may get around by car. You'll need to make sure you are close to major streets, and have plenty of parking.
• If you are scouting a location in an urban area, consider areas around public transportation hubs or areas of the city where there is a lot of foot traffic.

Proximity to Your Competitors

While it may seem counter-intuitive, operating a business close to your competitors is often very beneficial. This is especially true if you have a retail business that relies heavily on foot traffic. Shopping malls are a good example of why proximity to your competitors is an important factor. Most major pedestrian malls are full of clothing shops, and cost of retail space is often very high. The reason for this is that the number of potential customers increases exponentially on a per-store basis around a concentration of similar businesses. For example, while one store might attract 50 customers, two stories might attract 200 customers, and three stories might attract 1,000 customers.

Zoning and Signs

Before setting up shop, check with you local zoning authority to make sure you will not break any city ordinance or zoning policies in your preferred location. Also consider your sign requirements and compare them to sign regulations set by your local government. Many communities set restrictions on the size and appearance of signs.

You can find out how property is zoned by contacting your local planning agency, or use the state and local search engine to find if your city or county has zoning ordinances online.

Home-Based Business

Home-based businesses make up approximately half of all U.S. businesses. Convenience and low start-up costs are just a couple of the reasons that make a home office an attractive business location. However, running a home-based business isn't for everyone. Because most residential areas are not zoned for commercial businesses, your local government may have tight restrictions on the types of businesses permitted to operate out of a home. Check with your local zoning authority for rules that apply to you. If you plan to hire employees and have customers come to you, a home-based business is probably not the best business location for you.

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One option.... locating in a Mix-Use Business Park. 

495 Commerce Center
is a 110 acre master planned, mixed-use business park in McAllen, Texas. 495 Commerce Center is the only Class "A" business park south of San Antonio and is professionally planned to put businesses on the fast tract to success. This prime development is thoughtfully designed with landscaping elements that enhance the whole park from the jogging trails to the central water feature focal point. 

495 Commerce Center
is a secure investment. The business park offers various sized lots starting at 1 acre that are ultimately customized to fit the client's needs. An Owners Association and Common Area Maintenance program promote property values while the Architectural & Development Standards control building types, uses, mix, as well as the quality of construction, parking, landscaping and the architectural character of the project.

REITs Find 'Perfect Storm' to Ride Real Estate Wave

By: Jeff Cox
CNBC.com Senior Writer

Low interest rates and an improving jobs picture have given real estate investment trusts a boost that makes them an attractive alternative to stocks and bonds.

Commonly called REITs, the trusts have underperformed stocks this year just slightly but face strong prospects going forward as the two critical factors propelling the commercial real estate market continue to take hold.

REITs invest across a broad array of sectors, from office buildings to shopping malls and hotels. There also are health care, timber and infrastructure REITs. They are required to distribute 90 percent of their taxable income to investors through dividends.

"That really is a perfect storm that's very good for REITs," says Rick Romano, co-manager of the Prudential Global Real Estate Fund in Newark, N.J. "It will mean the economy isn't growing fast enough to add new supply and for rates to increase, but we have enough jobs growth so vacancies are starting to push rents."

Ironically, it is the tepid but steady pace of job growth — less than 150,000 per month — that creates a Goldilocks environment where the jobs picture is not too hot so as to drive home-buying but just hot enough to propel rents higher.

"If we can stay around 100,000 to 200,000 (new jobs) a month, we think that's kind of a good backdrop for REITs and real estate," Romano says.

The MSCI REIT Index has gained about 6.5 percent in 2012 after rising 8.7 percent the previous year.

Jeff Cox
Senior Writer
CNBC.com

Industrial REITs have done best, gaining 15.5 percent, while hotels are up 11.4 percent and shopping centers about 11 percent, according to the National Association of Real Estate Investment Trusts.

That compares to stocks, where the Standard & Poor's 500[.SPX  1358.04    14.81  (+1.1%)   ] has gained 7.4 percent, and Treasurys, which have lost about 2 percent.

But the $200 billion U.S. REIT market doesn't face quite the same challenges as stocks and bonds, and offers an attractive dividend at about 3.6 percent industrywide.

The real estate sector, struggling thought it may be, boasts strong support from government policy makers — the Federal Reserve  has pledged to keep rates low — and faces less danger from headwinds such as the sovereign debt crisis in Europe.

S&P on Wednesday reiterated its "stable" outlook on REITs and said they should do better than home builders this year. Making that view even more positive is that sentiment as registered by the National Association of Home Builders has hit its highest level since May 2007, according to data released Wednesday...

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GlobeSt.com - Retail Property Sector Defies Expectations - Daily News Article

GlobeSt.com - Retail Property Sector Defies Expectations - Daily News Article

Shelter From the Storm | CCIM Institute

Shelter From the Storm | CCIM Institute

No More Fear and Loathing of CRE Lending for Banks - CoStar Group

No More Fear and Loathing of CRE Lending for Banks - CoStar Group

Commercial Real Estate Seeing More Business Opportunities

Commercial Real Estate Seeing More Business Opportunities

Shelter From the Storm | CCIM Institute

Shelter From the Storm | CCIM Institute

Landlords Poised to Regain Upper Hand In Recovering Office Market - CoStar Group

Landlords Poised to Regain Upper Hand In Recovering Office Market - CoStar Group

NAI, C-III Merger Finalized, Signals Larger Trend

NAI, C-III Merger Finalized, Signals Larger Trend

Timing and Strategy Factor Into Successful Relocations

Posted January 24th 2012

www.CCIM.com

Negotiating the best lease terms is important in commercial real estate. But Juan Alcácer, an associate professor at Harvard Business School’s Strategy unit, explains why businesses also need to understand the strategic implications of expansion in the article Location, Location, Location, which appeared in the Harvard Business School Working Knowledge forum.

Before committing to relocating, businesses need to evaluate the strength of their available resources, Alcácer says. A move will require management to shift its focus from current business activities, which could slow the growth of a successful company. Another common misstep is blindly following competitors. Alcácer cites the example of companies that now regret their move to China.

Businesses also need to be aware of the signals they could be sending to competitors. Through their location selection, businesses might give competitors information about their operations or an opportunity to poach their employees. Businesses can avoid this problem by choosing a niche location, an approach successfully employed by Pixar. Although most major studios are based in the Los Angeles area, Pixar stayed in its Northern California headquarters after being acquired by Disney.