Do your research before putting down roots
Starting a Business? Do your Homework on Where to Put it
This is one of the biggest questions facing prospective business owners, and rightly so. The often-heard phrase, "location, location, location," isn't just empty rhetoric from the real-estate industry. You must find the best possible location to enable your business to succeed.
To get your answer, you must also be able to answer these questions: Who are your customers likely to be? How many are there, and where are they likely to come from? How much do they now spend on average per week or per year on what you are preparing to sell them?
Finding out about customers is your first order of business - because if there aren't enough customers willing to buy what you are selling, the time to find out is before you get the business started. You'd be surprised at the number of people who say they intend to invest half a million pounds or more in a new business, yet don't have a couple of thousand or even a few hundred pounds for a little research.
Location Research Simplified
For a local business, the research need not be a big, expensive proposition. It simply requires creating a demographic report for the area where you'd like to set up your business. Because of zoning restrictions or limited available commercial sites, there may be a relatively small set of places in any community where you can locate a business.
The best place to locate may not be immediately obvious. But demographic information on each possible location will quickly tell you which one is better than others, as long as you have an idea who your customers are likely to be. You may find it useful to visualise your research about each potential site, by displaying your research data in map form. Desktop mapping software puts this capability in reach of most small-business people. No special knowledge or computer hardware is required - only good data on your current or prospective customers' demographic and geographic attributes.
Get it in Writing: the Marketing Plan
A marketing plan that includes a demographic report on the site that you have picked from all the possible ones (and the reasons you picked it) is essential when you're starting a business. Take the time to write down all the things you learn about customers, potential competitors, and the place where you plan to start your business. You'll not only impress any financial backers you might have, but you'll find this report very useful once the business starts rolling. Any pre-launch demographic reports will also serve you well as you develop your advertising strategies. Your report on the location you have picked should include a description of exactly who you expect to become customers and how much, on average, each of them is expected to spend.
Think attributes, not needs. A description of the potential customers needs to be framed in terms of their demographic attributes, not in terms of their needs. Saying that your customers will be, for example, people who go out to dinner or people who buy expensive clothes won't help much when it comes to spending your marketing pennies wisely.
But saying that your prospective customers are, for example, married couples with children or homeowners with big homes will enable you to get an estimate of how many are in the area you plan to serve. This will enable you to better focus your marketing efforts. Most questions about future customers can be answered by getting a demographic profile of the community you plan to serve.