How Poor Location Strategy could affect a Business

One vital key for business growth is the right location. Poor positioning of a business will not attract the target market thus, it is imperative and of utmost necessity to properly locate your business or company. Choosing the wrong location has been the undoing of many small-scale businesses. This explains why selecting a good business location requires so home work and background study.

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A common approach to location decisions is to start from the big picture and systematically work one's way to a specific choice. This may entail selecting a state, then a town, and finally a location within the town. At each level of choice, one should be guided by the availability of conditions that would facilitate the attainment, on a sustainable basis, of the objectives of the business.

Many small-scale businesses do not give much thought to the choice of state or town in which to locate their businesses. They tend to take those as given. That notwithstanding, the entrepreneur would do well to reflect on some necessary parameters for choosing a good location.

Such parameters to be considered include; proximity to the source of raw material or finished goods as the case may be, accessibility to target market, local attitude to the kind of business proposed, state of current competition, availability and cost of relevant infrastructure, vibrancy of the general economic activity in the chosen area as well as the availability of functional or trainable manpower for the type of business in question.

With the application of regional science and spatial analysis, optimal choices can be made with respect to business location and logistics. However, the choice process used by a small-scale business does not need to be that elaborate. What matters is that the entrepreneur does not overlook its importance.

The choice of a specific site for business depends also on the type of business envisaged. While a wholesale business might place emphasis on the availability of space and good transportation system, a manufacturer might be more concerned with closeness to and cost of inputs. The retailer on the other hand places great premium on the size and quality of his target population as well as the accessibility of his location to that population.

He is also concerned with the extent to which location enhances or impairs the visibility of his business to current and potential customers. And, in some businesses, parking space consideration is given prominence. Whichever is the case, the entrepreneur is advised to carefully analyze the probable effect of a chosen location on the success of his business before making the final decision.