Setting up shop: key factors to consider when choosing a business location in the US


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The U.S. has been long touted as the land of opportunities where those brave enough to take chances and chase their dreams can achieve anything they put their mind to, regardless of where they come from, as long as they work hard and persevere. The mirage of the American dream and the promise of a better life has attracted people from all across the world to the United States and gave rise to a daring class of entrepreneurs, many of whom have managed to build successful business empires that still stand today.

And although the lure of entrepreneurship in America might have faded a bit over time, mostly due to the socio-economic discrepancies and the widening gap between the rich and the poor, the U.S. remains the destination of choice for many professionals with entrepreneurial aspirations.

While starting a business in any part of the world is a bold move given the risks and challenges that come with the job, it is particularly difficult to make it in an environment where every industry and niche is overcrowded and therefore characterized by ruthless competition. So, if you want to expand your existing business on American soil or build a company from scratch here, you need to be thoroughly prepared for what's about to come.


Why business location matters

The first thing you have to decide on when starting a business, apart from the nature of the activity you intend to perform, is where you're going to set up shop. This is going to have a huge impact on the future of your company, so you can't just throw a dart at the map and go wherever it lands. But how exactly does location impact a business?

For starters, a proper location ensures higher foot traffic which is just a fancy way of saying that you're more likely to gain greater exposure and attract a larger number of customers, thus increasing your bottom line. For example, a business located near a busy area is going to get more visitors than one that's hidden in a remote or hard-to-access spot.

It's also possible to cut down on operating expenses and increase efficiency by being smart about the business location you choose. This can mean paying less for rent, having access to a wider pool of talent or cheaper labor, finding the right suppliers in your area and so on.

Location matters when it comes to making an impact on your target audience as well. Being properly positioned makes it easier for you to reach your target audience and for them to reach you, so you can build a strong foundation of business growth. For instance, luxury brands know that high-end goods serve as an investment for wealthy individuals, so they position themselves strategically in places where they can access these types of customers.

Last but not least, there's a connection between business location and the way the public perceives a company. Customers tend to favor businesses that are located in more desirable areas, so that can contribute to a positive brand image.


How to choose the right location for your business

Deciding where to set up shop is a task that requires quite a bit of time and effort as there are several aspects one needs to factor in when vetting different business locations.


Geographic location

he U.S. is vast, with economic conditions and opportunities varying widely from one region to another, and numerous business hubs scattered across the country. This means there are plenty of places that can serve as fertile grounds for businesses, potentially increasing your chances of success, and just as many that you should probably steer clear of.

Since conditions change over time, there are constant studies on the topic, so you might want to consult the latest statistics in this regard. According to Forbes Advisor, Indiana, Colorado and North Dakota rank as the three best states to start a business in 2023, based on 18 key metrics from across five categories, with New York falling at the opposite end of the spectrum.


Market research

Even if you already have years of business experience in a different part of the world, it doesn't mean the strategies and methods you've used in one place will work in all others. So, when you're planning to open a business in a new location, market research is a must. It's important to know who your target audience is and get to know what customers are like in that particular area, including their needs and expectations from a business like yours. This will help you adjust your offering to meet their specific requirements.


Running expenses

Location has a significant impact on business running costs, which vary from state to state and even within the state. That's why it's necessary to take into account all the common expenses of operating a business from rent and utilities to formation fees, the minimum state wage and even the incidence of natural disasters in the area.


Local laws and regulations

Another aspect you need to keep in mind when selecting a business location is the laws and regulations in each state. The U.S. may be just one big country, but being formed as a federal republic means that apart from the federal laws that apply to everyone, there are also state and local laws that apply to the people who live and work in every particular state. Therefore, you need to get acquainted with local laws and regulations, especially when it comes to taxes, as they will have direct implications on your bottom line.



Your proximity to competitors can either hamper or help your business. There's a fine line between the two, so you have to analyze the local market and see how the rest of the players could influence your company's trajectory in the long run. And since in business you should always keep your eyes on the future, you need to think about the growth opportunities that are present in the locations you're investigating.

In the end, determining the right location for your business requires quite a balancing act. There are many boxes that a location must check in order to be deemed suitable for a company, so it's not going to be easy to find what you're looking for. But it's just as true that taking the time to choose a good spot for your business is definitely worth the effort.



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