Tips on choosing a location for your Business

When starting a business , the location should be among the top priorities, because the success of any business in the country is about 40% determined by its location.


There are many things to consider when choosing a location for your business venture, whether setting up an office or a shop for the first time, or looking to expand into new areas.

Further research shows, as the experts confirm that majority of Nigerian entrepreneurs do not achieve their expected goals in terms of profit because of wrong location of business.


Finding a location for your business is about more than just choosing a building.


This has to do with the ease customers get in contact with the business. This could be the road condition or pattern, nearness to the major routes, or the consideration of immediate environment.

Parking space, visibility for easy identification of business premises, traffic flow etc. Consider a situation where a customer spends up to an hour to get to your business premises, when 15 minutes can land him at your competitors business place to conduct similar transaction, as it happen in most Nigerian cities such as Lagos. Such a customer can only return to do business with you on special or personal grounds.

Business Rates

Cash is king! Cash flow is critical as it determines the viable ability for a business to survive and pay its bills. Therefore, it is important to research the average Business Rates including rent, utility bills and taxes in the area to ensure you can afford the premises. Simple hidden costs such as deposits and whether you need to pay to park need to be known before committing to a location. Estimating the living cost of the location will prevent a commitment outside your means.


Your proximity to other competing businesses could be crucial to your success. Could they provide a benefit to your business or cause a hindrance? Establishing which competitors are in your area and their offering could help guarantee you choose the right location for your business. If there is too much competition then it may be a warning sign to expand your horizons to a new location. 

However, there are some businesses you have to site close to competitors, though you will face fierce competition. Example of such businesses is restaurants and college canteens usually concentrated in a particular area.

Type of Business

You have to put the type of business you are setting up into consideration before you choose a location. The type of location that works for a manufacturing business might not work for a service oriented business.

Researchers maintain that manufacturing business located near supply source of raw material is bound to succeed, while on the other hand a service business can only succeed if located near the consumers.

Proximity to customers

If you want to open a stationery store, you don’t leave a university community and site your business in a rural area where farmers live; you have to locate the business where students stay.

A restaurant located near offices, companies, factories markets etc has more success potential, than similar business located in residential areas.

Therefore, when you are thinking business, think a location that suits your target audience.

Availability of Utilities

Availability of basic infrastructure can affect your choice of small business location. Amenities and infrastructure such as water supply, power supply, good road network and security are things to consider when locating your business. Utilities such as internet services etc. are very significant for the success of a business. Most customers patronize businesses mainly to utilize their utility facilities such as the Wifi.

Industrial Clusters / areas

Some entrepreneurs may decide to site their business in industrial areas or clusters due to the infrastructure and amenities already on ground. Industrial areas are areas mapped out specifically for commercial purposes especially manufacturing firms.

These areas are sometimes given special attention such as good road network, constant power supply, etc. In some certain regions, heavy duty manufacturers are forced by the government to site their companies in these industrial areas.


When you are in the process of finding a location for your business, think about who the location is going to be important to. 

You? The space has to work for you, or it won’t work-if this one doesn’t feel right, time to find another location for your business. Remember, you’re the one who has to work there every day.

Your customers? It also has to work for your customers, or it won’t work. No customers = no business.

Your employees? This issue may not be as critical at first, especially if you don’t have any employees yet. But the ability to attract and keep good employees will be affected by your location.

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