Choosing A Location For Your Business: Why Is It Important?

Operating a business from an obscure place is like booking a funeral hall for a happy occasion. The location of the company makes all the differenc...

  • Choosing A Location For Your Business: Why Is It Important?
    Lethabo Moodley Image Lethabo Moodley

    Choosing A Location For Your Business: Why Is It Important?

    • Tuesday 28th of January 2020
    • Startup

    Operating a business from an obscure place is like booking a funeral hall for a happy occasion. The location of the company makes all the difference because it represents the physical presence of the brand. Although a lot of organisations are being run digitally these days, the need for a brick and mortar store cannot be understated. An address lends authenticity to the business and helps customers visualise an image which is not vague or anonymous.

    E-commerce businesses too require an office to run their operations, accommodate the employees, stock the inventory, etc. Thus if you are looking for a promising business for sale in South Africa, then you must pay heed to its physical positioning in the market. The choice of the ideal spot is dependent on a variety of factors ranging from the budget of the owner to accessibility, amenities, space, etc. Here is what should be considered while choosing a location for your business.

    Why Is The Location Important?

    The place from where you operate your business gives a face to your brand name. The success of your venture is heavily dependent on it as you need a steady flow of customers to your doorstep. Retail shops, restaurants, salons, etc., need consistent foot-traffic which can be accomplished by positioning your unit at the centre of all the activity. Let us see how it impacts a business:

    A Busy Location Enhances Visibility

    If the area chosen for the placement of the business is unheard of and is not visited by the target audience, then it will not get any attention from them. So you need to find a place which is not a secluded region in a remote area. Instead, it should be a prominent destination which has high-passing foot traffic and parking facility. It should have other businesses in the vicinity to give a professional feel to the premises.

    If a business is strategically placed, it will automatically grab all the eyeballs, which will increase the visibility of the brand. For example, if you are operating in Cape Town or Pretoria, it will send out a message of successful operations as these are considered as high-growth zones. Thus you must be positioned in a growing business hub which will expand in the future.

    Easy Accessibility Improves Growth Potential

    The connectivity of the office with the surrounding areas is of utmost significance. It allows the business owner to find the best employees. Your team will not have to be concerned about transportation or travelling long distances to reach the office. It is also easier for the suppliers to bring the stock and get it delivered on time which will prove beneficial in enhancing productivity.

    The investors should be able to view long-term value in the venture, and a significant part of it depends on the location. Moreover, the customers will also find it convenient to visit a store or unit which is well-connected with all forms of transport. Your business can flourish if all these people find it easy to drive or commute to the address.

    Proximity To Competition Can Be Advantageous

    When you are looking for a location, you will have to consider the presence of competition in the area. It is good to have a few similar businesses in the vicinity as it ensures an established customer base for the product or service. However, you must be sure that the market is not saturated and can accommodate a few more businesses.

    Healthy competition encourages entrepreneurs to keep innovating and offering more advanced services. Also, customers have the habit of comparing product features and prices. So if you are in proximity and have a unique selling proposition for your customers, then you can generate huge profits. Complementary businesses are also a positive sign for your venture.

    Space and Style Requirements Create an Impression

    The needs of the business determine the space considerations. You must have a farsighted floor plan which can accommodate your team comfortably. You should choose a place which has ample space for a kitchen, washrooms, lounge area, reception, meeting rooms, etc. If it is a retail shop, you need to have designated storage space and the display area, cash counters, washrooms, etc.

    Besides space, the style of the building also makes an impact on the image of the business. If you lease an old Victorian building and your business is a happening contemporary bar, then the two will seem like a mismatch and confuse the target audience. So make sure you pick the location accordingly.

    Expenses Related To Business Premises Are Crucial

    While running a business, the entrepreneur has to keep unnecessary expenditure under check. Also, the place you rent out has to fit into your budget. So you cannot opt for the highest bid or the poshest building in an affluent area. You have to think practically and consider the viability of operating a business in the chosen location with your financial projections.

    Don’t forget to include the expenses related to the rent, security deposit, utilities, maintenance and taxes in the region. Neglecting such expenses is one of the common business challenges faced by every small business. However, this doesn’t mean that you go for the cheapest listed location as it will increase the cost of advertising and marketing to create visibility. You should know how much you can afford and make an informed decision.

    Zoning Law Restrictions

    The moment you put your finger on a property or wish-list it, you must know how it is zoned. There are certain zoning laws in South Africa that do not allow the establishment of a pet shop or a bottle store in zoning for shopping centres. Similarly, the office areas do not allow the usage of the location for starting shopping malls.

    There are zoning laws for industrial areas and rezoning of residential properties as well. So you must be aware of them and make sure that you are not entering any restricted zone. You must also talk to the local council and determine future infrastructure development in the region.


    Comfortable space, lower costs, easy access and a lot of other factors add up to create a tactical business location. If you are planning to purchase a business for sale in South Africa, then you must have a clear understanding of all these elements to find a suitable property.

  • Author Info Lethabo Moodley

    A business expert, Lethabo Moodley is a management consultant who has been working across domains since 2005. His rich experience includes a Masters degree in business administration from the prestigious Gordon Institute of Business Science and Doctor of Business Leadership degree from Unisa Graduate School of Business Leadership. He has been actively working as a consultant with the biggest firms in South Africa and his contribution in the growth of these organisations is considered invaluable. He has saved a lot of small businesses from going bankrupt and has renewed the lost success streak of the big fish in the market. Business2Sell is delighted to have him onboard for his insightful blogs.