Your first business is as precious as your first child. And even though you are excited, you take each step carefully so that you don’t mess up. That’s why there is so much planning for all decisions regarding your first business. However, deciding the location base is one of the first business factors that, despite being necessary, sometimes gets forgotten in the beginning.
You have to remember that your dream project is not the virtual gold cup that you can win irrespective of your location. But, if chosen wisely, your business location could be your success factor.
Here are eight points to consider while choosing the location for the base of your first business.
Solutions & delivery
The operation of your first business is a crucial factor. The product type, production, and delivery may have specific requirements that you can only meet in a metropolis. Hence, listing your first business production requirements is essential before looking for a place.
For example, if you are about to deliver digital services, a small town or metropolis will not make a difference. However, if it’s a clothing brand, you would want to be close to the weavers, tailors, delivery agents, and audience, making a metropolis ideal.
Effect of local audience demography
Since most consider selling products online as the best first business to start, the demography of local audiences becomes unimportant. However, the same is not true for retail businesses. In that case, the locality becomes the number one priority because the audience demography would decide if your first business would succeed.
While choosing a location, you must ensure that the local audience demography matches your target audience. They should be willing to purchase your product by paying the price you are offering. Another thing you need to be careful about is that the local people should not have a problem with your services, even if you are not selling them. If any of your practice doesn’t align with the mentality and beliefs of your local audience, your first business may end up failing.
Competition
Competition may be a bad thing to many; it has a lot of advantages too when you have a first business model. Existing competition gets you an established place where your target audience is already aware and educated about your offerings. In such a scenario, good offers are more than enough to attract sales.
Alternatively, you may also aim to introduce a certain type of offering available in a metropolis to a small town with an untapped market. How you choose to face and benefit from the competition of your first business will help you decide your location base.
First business loans
Most people depend on loans to establish their first business setup and create a cash-roll. While the location has nothing to do with a loan approval officially, the willingness and attitude of financial institutions may differ from place to place.
Sometimes, it might be easier to get first business loans in a metropolis since banks are used to and willing to give business loans in big cities. However, at times the same may backfire because of too many applicants. Furthermore, metropolises could be better for getting first business grants since you can participate in several events without traveling much to get exposure.
Benefits from other businesses
Can your first business benefit from other businesses? If yes, then what kind and how?
Knowing your target audience and their potential location nearby is a smart move. Many first business solutions come from needs in a potential market. For example, building shops near hospitals & schools, tea, coffee stalls, food trucks in office areas, hospitals, shopping centers, and stationery shops near schools. The kind of businesses you can benefit from and where you would find them should tell you if a metropolis or small town would fit you.
Infrastructure
Since metropolises are business hubs, you get excellent infrastructure and services on different budgets.
For example, you can rent a cabin for a day for your first business deal or rent a few tables for your small team without having to worry about the utilities, cleanliness, etc. Options for office spaces are many and of different types and budgets, which is not available in small towns. The infrastructure requirements of your first business should tell you which location would be appropriate for you.
Cost utilities, rent rates, deposits
One of the most important considerations for your first business becomes your budget. You cannot do anything by going beyond it, and hence it serves as a limitation. Since the pricing of everything varies in a small town from metropolises, price comparison becomes a must for your first business. The comparison should include the price of everything like raw materials, production cost, team salary, travel cost, delivery, rent rates, deposits, electricity, etc.
Team
Another important factor affecting your location choice for the first business is team quality and availability. Since some businesses can run remotely, some cannot. You may need some people to help you offline as well.
Depending on your first business requirements, you must quickly learn where to find the right candidates. In general, metropolises serve to be better for hiring since most professionals move from small towns to get jobs in the big cities.
Verdict: small Town Vs. metropolis
The answer changes for everyone, depending on your first business plan.
You must understand all your requirements, plans, goals, operations, etc., and compare available solutions before making a decision. All the above points play a vital role in deciding whether you should be based in or out of a metropolis, which indicates that having just one reason is not enough. You need to think of everything and make a pros and cons list to weigh your options.
So, what weighed more in your small town vs. metropolis comparison for your first business? Comment below!
Edward is enthusiastic about assisting businesses, especially local firms, in developing a more personal online relationship with their consumers and prospects. While trading and market research is his strong USP, his expertise in finance works like an added charm to his credentials! He is a finance genius!
