Fred Latsko Explains Why Location is Everything When Opening and Operating a Business
While location may be declining in importance ever so slightly on the home real estate front, with size now supplanting location among homebuyers according to a recent survey conducted by Barclays Mortgages, it remains absolutely vital to ensuring the success of a business.
A multitude of factors play a role in determining the success or failure of a customer-facing business and many of those factors are heavily dependent on location according to Fred Latsko, the CEO of Latsko Interests, which has more than two decades of experience in property development and management.
Fred S. Latsko breaks down several of the primary reasons why location is so important and how it will either support or sink a business.
Location Determines the Majority of a Business’ Customer Base
Most of the company’s customers will come from the local area. While the radius will be wider or smaller depending on several other factors, it’s without question that there is a finite radius, which could be as little as a few miles for some businesses.
Given that, companies must carefully choose areas that have the proper demographics to support them, which could include everything from their ages, income levels, and interests, down to finer details such as their level of car ownership or social media engagement.
Location Determines the Amount of Competition
The amount of competition a business faces plays a major role in its success, of which location is the single biggest determinant. In the right location, a company may not have a direct competitor for miles in any direction, giving them a veritable monopoly. In the wrong location, competitors could be just up the street, poaching customers at every turn.
Location Determines Visibility and Accessibility
Having less competition around is ideal, but as Fred Latsko points out, there could be several reasons why some areas are underserved and appear to be golden opportunities. Those opportunities could, in fact, be fool’s gold, without the visibility or accessibility needed to drive customer acquisition and retention.
Visibility – How visible a business is solely by virtue of its location. Being located on the corner of a major intersection tends to confer the greatest visibility, while pedestrian and vehicle traffic is sure to suffer if a business is hidden away down a sleepy side street.
Accessibility – The ease with which people, including customers and couriers (which could affect delivery costs), can reach your business. Accessibility relies heavily on local transportation infrastructure, including proximity to highways and the availability of nearby bus routes, subways, bike paths, and/or train lines, as well as parking spaces. Accessibility could also impact a company’s ability to recruit employees.
Location Determines Security and Safety
Lastly is security, which Fred Latsko believes is an underappreciated aspect of choosing a business location. A more secure location with fewer incidents of nearby crime could reduce insurance premiums for a business, saving it money. At the same time, being situated in a safer area will likewise convince more customers to make the journey out to that location for a little does of carefree shopping.