Business Article - Premises, What to Look For
Whether you are buying an existing business or trying to build a new one there are certain things that you need to look for. Do you ever wonder why one business is very successful while another business that sells the same type of product struggles? This is one of the many reasons that the following criteria should be met before jumping head first into a business. Research, research, and more research guarantees that your business has the best possible chance at success!
Area Profiling
It is important to find out information about the area that you are thinking about buying or starting a business in for many reasons. Demographics, pollution, local crime rate, land price checks, business rates, consumer information, attitudes, and what businesses are already existing in an area are all part of area profiling. Let’s go over all of these so that you can better understand the importance of each one and how they fit into the success of your existing or future business.
Demographics
Demographics is the focus of study on the human race or population. It covers such areas as age, nationality, religion, education, race, gender, language, marital status, socioeconomic status, life cycles, mobility, and ownership. Area demographics are very useful for the business owner in several ways.Age is important to many store owners because age dictates the possibility of a sale. Think about the average age of the people that would want your product. You can then research the ages of people in a specific city to find out where it would be best to place your business. If you have a product that is popular with the teenage population you would want to find out where the largest concentration of teenagers were located so that you could place your store near them to make sales inevitable. The same is true for a store that specializes in lingerie. You would want to find an area that is mainly populated with women ages 18 – 45 to set up your store so that you would have the best opportunity for sales.
Marital status can be helpful knowledge to business owners also because single people use certain businesses more than married people. Think about bars. When you think about a bar or drinking establishment, what do you think of? Do you think about married couples? I don’t. I think about single people going out to have a good time with other single people. The same is true for dating services, lawn care, dry cleaners, fast food restaurants, etc. This is only helpful for some business owners as some sell a product that everyone needs but the main point is that you need to think about the person that you visualize purchasing your product from every aspect. Let’s move on.
A person’s gender is useful information for certain businesses but not all and, let’s face it, neither gender is in any danger of becoming extinct. A single woman still needs tools around the house and a single man still needs a candle if the power goes out or he has a hot date. The difference is that a male does not shop in a women’s clothing store to clothe himself and the same is true for a woman. If there is a high number of single women in the area that you want to put your men’s clothing store in, rethink it. Chances are that it will not hurt your business that bad but who wants to risk it?
Socioeconomic status is probably the most important and most valuable research that any business owner can thank themselves later for utilizing. This topic covers such things as unemployment rate and salary information. Knowing these two very important criteria can boost a business’s sales to superior levels by simply using the information that is at hand. If you own an existing business in an area where the unemployment rate has gone up, you may want to consider lowering your prices a bit to stay within a more affordable range and keep the sales flow near average or you may want to move your business to a more prosperous area. The same is true for a person trying to start a business. If you research the area’s unemployment rate and median salary for the people employed first, you will save yourself a lot of grief later. No one wants to build a business in an area that is in decline for fear that the business will bankrupt. This is key information, do not hesitate in using it!
Ownership is a person’s right to any property. If a person has ownership of something, they may need to purchase something else to maintain it. Think homes. A person’s home is their castle. They want to protect it and make it comfortable for their family to live in; security systems, home improvement products, furniture. Think cars. People who have cars also have expenses related to cars; gas, tires, maintenance. Pets are even considered material in some form; they have related expenses too. Remember that almost anything of value has a need for maintenance to keep that value.
Nationality, race, religion, language, and mobility are all smaller pieces to the puzzle because most consumers fall into the main categories that we have previously discussed. This does not mean that they are not important. The important thing to remember is that you need to visualize the person that you intend to sell this product to. If you can do that, you should know what you need to research before starting or building your business.
Pollution
Pollution affects many businesses in one way or another. If a business is located near polluted lands, consumers may smell or see things that disturb them and cause them to want to go elsewhere for the merchandise that they could have purchased from your business. Pollution is also detrimental to businesses who cause it; hefty fines and expensive clean up measures cause most of these businesses to go deep into the red as soon as it is found. There are many laws that business owners must follow in order to protect both themselves and the environment around them. Research on this matter is very important. Find out the laws governing your area and abide by them.
Local Crime Rate
Local crime rate is important information when attempting to start a business. Business owners need to take this into consideration for the protection of not only their products, but for themselves and their consumers. If the crime rate is high, chances are, much of the consumer population will feel more comfortable shopping in a safer area. Business owners may also feel the need for increased and expensive security measures that may not be as necessary in a different location. This is public information and anyone can research this online for almost any city.
Land Price Checks and Business Rates
Land price checks are one way that a business owner or potential business owner can make an educated decision in placing his/her business in the right spot. If land or rent is cheap, there is a reason; do the research and find out why. This is also true for the higher priced parcels; desirable locations, better amenities, etc. Sometimes, a business owner can pick up a nice parcel for a low price if the timing is right but, as stressed before, make sure that the research dictates a good location before setting it in stone.Business rates are fees that are imposed upon businesses to help fund the services that are provided by the local authorities. Even if you maintain a website and work from home, you could be subject to business rates. The smart business owner researches their area business rate to find the necessary information in their city. This knowledge is important for tax purposes later. Remember, business rates are the same as taxes, they can be appealed if the price seems much too exorbitant.
Consumer Information
Consumer information is helpful to the business owner and especially the new business owner. This information shows who is buying what; what is hot and what is not. It aids the business owner in deciding what products they should carry and how many. If there is something that is very popular, carry it, it will sell. If there is something that is not doing so well, lower the price and cut your losses; replace it with a more popular item and increase your sales. It also alerts businesses to recalls and defects. Remember, the best way to get repeat business is by being an honest and trustworthy towards your consumers.
What Businesses Already Exist?
It is a good idea to research the area that you plan to open up shop in to find out exactly what types of businesses exist. Too many of the same business decreases the potential for success. If you sell auto parts and there are already four other auto parts dealers in the same small city, reconsider. Larger cities may be more acceptable. Also, if you decide to open up the same type of business as another, canvas the area and check out the other stores. Make sure your pricing can be competitive with theirs.
Attitudes
The consumer’s attitude and the attitude of the community that your business resides in has a lot of influence upon sales. Think about an adult shop. If your shop is not wanted in the area by the locals, they may picket your business. If they picket your business, people may be too embarrassed to come in and purchase anything. Consider the community’s attitude as a whole before making your move.
Overview
Let’s recap. The information that you were just given is extremely important when starting a business. Research is the key when trying to decide where to build/rent, what products to sell, and who to target the sales towards. If you take the time to do the research you can reap the benefits of a well planned and profitable business in the future.Now, you understand the power of area profiling. Buying or building a business in an area that can’t use it is ensuring failure for the business. By utilizing the information above, a business owner or future business owner can improve the chances for the success of their business tremendously. Proper research is one of the key strategies used by successful business owners when making decisions such as expansion or starting a chain of stores. This is the reason why these business owners are successful!