As a small business owner, you could be spending up to 50 hours a week in your office, so finding the right area to establish your company is essential. And while factors like style and size are certainly important when selecting premises, the location itself could be your most crucial consideration. In fact, 84% of businesses specifically single location out as a primary concern when searching for office space.
The particular place you choose to base your company has the potential to impact everything, from costs to customer convenience—elements that could make a significant difference to the success of your startup.
A good location boosts company reputation
Appearance is everything when launching a new business, and your location could certainly affect how you’re perceived by others. Small business addresses matter because being based in an area associated with your particular industry means customers and clients will be more likely to see you as legitimate and profitable. For example, tech-based startups could consider settling down in London’s Silicon Roundabout, whereas an aerospace enterprise would be well suited to Derby, home to over 700 aerospace companies, including industry leaders.
Positioning yourself alongside some of the best organizations in your field not only makes your company look credible but also means you’ll be in a position to mingle with others working in your industry. Networking brings about a huge number of benefits for small business owners and could help you leave a lasting impression. An added bonus to your reputation is if your peers spread the word about your business, whether by recommendations or collaborations with clients.
The right location influences business costs
You need to be financially savvy when you first establish a company, and your chosen location could have a huge impact on its total costs. For example, as the UK capital, London seems like the place to be, but it comes at a high price. The cost of renting an office in the capital is set to rise by around £2.50 per square foot, per annum, by 2021. In some areas of the city, this cost increase could reach highs of £5 per square foot, so it may be more cost-effective to consider somewhere like Manchester, another vibrant area that is cheaper and on track to become a top global city. Better yet, you could choose Newcastle, Leeds, or Cardiff—the three least expensive cities to rent prime office space in, according to a recent data.
Your business’s location will also determine how much you pay your staff, as labour costs vary greatly across the UK. The average weekly wage in London is £727, whereas this drops to £413 for employees in Southend, just over 40 miles away. It’s incredibly important to account for all of these expenses before committing to a particular place, while not simply choosing the cheapest option. If you make the wrong decision, you could be facing additional costs to relocate again.
Your office’s location impacts employees and customers
You’ll need to carefully consider all the people involved with your business when it comes to deciding a location. For example, you ideally want to avoid having your employees make a long commute to work every day, as this could end up adding to their costs, and perhaps cause them to reconsider their role. Furthermore, the effects of long commutes have also been associated with decreased wellbeing and lower productivity. And if your business isn’t convenient for your target employees to reach, you may end up with a workforce that is very different from what you originally had in mind.
Similarly, think about how your customers and clients will be most likely to engage with your business—particularly if you’re opening a more public-facing business like a shop, restaurant, or agency, with more frequent face-to-face interaction. This means considering how they’d get to your business itself. If they’re likely to drive, there must be parking available. On the other hand, if you expect them to use public transport, it’s vital you’re reachable by train or bus services.
Local reputation is also something to bear in mind. For example, if you’re hoping to attract business from wealthy customers, your company should be located in a more prestigious area, where that clientele is more likely to shop around.
