How to Choose a Business Location: The Ultimate Guide

Updated on January 31, 2020
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Choosing a business location is not something that can be done on a whim—it’s a crucial step in starting a business. First things first, the business location you choose will depend on the type of business you operate. Business parks, shopping malls, strip malls, professional buildings, and others are all designed to meet the specific needs of various businesses. If you’re expanding from online-only to online and brick-and-mortar, for example, your needs will be much different than if you’re an accountant looking to grow your firm and bring in new clients.

It takes planning and research and a willingness to thoroughly vet all of your options. With these helpful tips, you can identify the best place to locate your expanding business.

Decide on a Business Location Type

Here are five common types of business locations, but more creative options, like co-working spaces, are popping up all the time. Be on alert for these and other location types that would meet your specific needs.

Home-Based Business

If you work from home but need more space, you might consider moving to a new home or adding on to your existing home.

Retail Business

Don’t limit yourself to downtown storefronts and strip malls. You can also find retail space in airports, free-standing buildings, and special event kiosks.

Mobile Business 

It used to be that the only businesses that moved around were circuses and festival vendors. But today with mobile card readers, your restaurant can add a roaming food truck location and your used book store can open a new pop-up shop near the beach.

Commercial Business Space 

Commercial business spaces offer flexibility for even more growth down the road, but are typically best for businesses that don’t rely on heavy consumer traffic.

Industrial Site

If you operate a manufacturing or distribution business, you’ll have special needs and will likely have limited choices when it comes to opening a new location. Industrial sites are needed for companies that require large amounts of warehousing space, for companies that need access to major transportation routes, or for companies that may produce pollutants as part of the manufacturing process.

In almost every case, where you can locate your business will be dictated by local zoning ordinances in your community. Don’t sign on the dotted line until you’re sure it’s legal for you to operate your business in your desired location.

business location

Make a List of Your Basic Business Location Needs

In addition to overall building type and zoning regulations, there are a few finer points you need to consider. Add any of these that apply to your checklist:

  • A location that is consistent with your business’s brand. In other words, you probably wouldn’t want to plant your new office supply location right in the middle of a high-end, boutique shopping district.
  • A location that makes it easy for you to connect with your vendors and suppliers. Which location makes it easier and cheaper for you to get the raw goods you need to operate?
  • A safe location. This is especially important for businesses with inventory that may be at a higher risk for burglary and theft.
  • A location that’s not saturated by your competition. If at all possible, you’ll want to expand to a location where the other businesses on the block are complementary.
  • A location with sufficient parking. Will your customers be willing to pay for parking? Or do you need a location that provides adequate parking spaces for employees and customers?

Make Sure the Business Location Is Within Your Budget

Of course, one of your major priorities will be finding a location that fits within your company’s budget. However, that’s not all you need to examine when it comes to money. There often other location-specific costs to consider beyond the purchase price or monthly rent. Almost every location has different hidden costs that you need to account for: taxes, renovations, utility upgrades, minimum wage requirements, and economic incentives. Even mobile business need to consider the cost of permits and vehicle licensing when choosing a new business location.

Considering all the above will help you make a well-educated choice for your next business location. Before committing to anything, be sure to speak with other business owners in the area to make sure they’re happy with the location. Although you can never predict if a new location will be successful, you can do as much research as possible beforehand to ensure it is the best available fit for your growing business.


Sally Lauckner

Sally Lauckner is the editorial director at Fundera and the editor-in-chief of the Fundera Ledger. She has over a decade of experience in print and online journalism. Previously she was the senior editor at SmartAsset—a Y Combinator-backed fintech startup that provides personal finance advice. There she edited articles and data reports on topics including taxes, mortgages, banking, credit cards, investing, insurance, and retirement planning. She has also held various editorial roles at, Huffington Post, and Glamour magazine. Her work has also appeared in Marie Claire, Teen Vogue, and Cosmopolitan magazines. Sally has a master's degree in journalism from New York University and a bachelor's degree in English and history from Columbia University.  Email:
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