Trade Area Analysis

I have never realized that a lot of people would be asking me questions regarding finding the right location for their business. I have always thought that choosing the ideal location is easy as ABC. However, I have received queries through my email how to choose the right location for their businesses. They have emailed me asking if I can give concrete examples or tips on how to pick a spot for their business.

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Since I don't want to answer all the emails individually, I have decided that I will write about this and post it my blog in the next couple of days. I am also going to put illustrations or clear examples which will better serve people on how to pick the right location for their shops.

Just to start this lesson, I would like to tell our reader that choosing the right location for your shop all boils down to how well you know your target market. The first rule on choosing the ideal location is making sure that your shop is near your target market. You might be located near the place they hang-out or they frequently go to.

I want to also reiterate that there are several things you need to focus on and look at. These things are accessibility, barriers to entry, presence of competition among others. You can check it in my previous blogs.

Lastly, I will make this lesson into an e-book which you can download and use as a guide when you are going to expand your business. This e-book will be free of charge. I only pray that you share it with others in the hope that this will drive businesses to grow. We need more businessmen and entrepreneurs to move this country forward.

Thank you very much for all your emails and feedback.

Make Your Business Accessible

When choosing a location for your business, accessibility should be the first thing you should consider. Your customers should be able to go to your shop quite easily.

There is no use in putting up a business in a cheap location with a parking lot if your customers need to drive an hour to get to your shop. There is also little value in putting your shop in a high-traffic location if you are selling to a small niche - the rent will just eat up whatever you will earn.

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Getting the ideal location for your business is a delicate balance between making your shop accessible to your clients and making sure that rental payments will not eat into your profits. The most ideal and best locations for businesses are also the ones that have the highest rents. So be very careful in evaluating where you put your business.

Most business people like putting their shops in malls. Understandably, malls offer high volume of traffic for those who want to rent a space. Malls also provide parking spaces. They are also accessible via public transport. If you are a business-owner, setting a shop inside a mall would make good business sense, except for the rent. The rents inside malls are quite astronomical and sometimes even forces some of the businesses to close shop.

If you have a very high profit margin, say for example you are selling jewelry; or you are attracting lots of customers, think of McDonald's, then renting in a mall won't be a problem. You can easily cover the rent with your profit margins or the number of customers that buy your products.

However, if your profit margin is not that high or don't get that many customer, it is best that you avoid setting-up shop inside malls until you are certain you can pay the rent.

Choosing the right location for your business means you have to understand where your customers are mainly coming from and how they will visit your store.

Different kinds of products or services need different kinds of locations. You cannot evaluate a site based how a fast food company evaluates a given location if you are a furniture company. Those who are buying from McDonald's might not be the same people who are buying Ikea products.

When you choose how accessible you want your store to be ask yourself these questions; are you customers traveling by car? Will they be using public transport? Can they walk to your store?

Customers who are using cars need parking spaces. If you are a stand-alone shop, you should be able to provide your customers a parking space they can park their cars on. If you are a jewelry store, it would make no sense to let your customers park one block away from your store. You will just provide opportunities for thieves to rob your clients.

If your customers are using public transport, then make sure that they can easily go to their next destination when they leave your store. This just means, your store should be near bus stops or terminals. It would be no use to rent a place with a very large parking space. You will just be wasting your money.


Getting to know your customer is the key to finding the ideal location for your store. Find out how they will be going to store. Talk to them if possible. Get into their mind.

In the end, you want your shop to be easily accessible to your customers. You want them to get into your shop and buy your products. Make it convenient to visit your place and they will keep coming back.

How To Choose The Best Location For Your Growing Business

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One of the most difficult things an entrepreneur has to go through is choosing the right location for their business. Anyone will tell you that a location can make or break a business. A business in a very good location can grow faster than a business in a not-so good location. Meanwhile, a business who is not accessible or cannot be seen by people will eventually close. It doesn't matter if the business is good.

Any entrepreneur who wants to grow and expand his business must be able to identify the ideal location for his business. The ideal location for your business is where your primary consumers can easily go to your store;whether they have cars or not, and buy your products, you don't have any competitors within the area and the rent is so affordable.

But in most cases, I see badly placed businesses. The businesses-owner decided to put-up the shop there because the rent is affordable and that is the only place available. Most of the time, the decision to open the store on a badly placed location will result in the business not taking off.

These are the factors you need to look-out when choosing the ideal location for your business:

• Accessibility - your shop should be accessible to your target market. They should be able to find your location immediately. If your customers have cars, do you have a parking lot? If your customers will be going to your place using public transport, will they have no trouble finding a taxi or a cab?
• Barrier to entry - a construction going on in-front of your place will make people twice before they enter your store. Make sure that your entrance is free from obstruction and can be clearly seen by your customers.
• Foot traffic - choose a location where the foot traffic the quite high. A high foot traffic will enable you to have a higher capture rate (the number of customers who will go in your store versus those who are just passing by). 
• Traffic generators - these are things, events and other businesses that gives the reasons why your target consumers are in the area.
• Presence of competitors - you will have a greater chance of attracting customers when you don't have competitors in the area. 

I will be discussing each of these factors in my next few blogs. I will also cite some examples on how these factors contribute to the success of your business.

I will share with you some stories and anecdotes regarding my experiences in choosing locations for a food business. I used to work in the fast food industry and we have developed a system that helps you determine where to put your shop.