Why it’s important that small businesses choose the right location for their business


In the current climate the world finds itself in, there has been a lot written about businesses starting and being run from kitchen tables as the world continues to battle the Covid-19 pandemic. While this is still the case, and it may take longer for businesses set up over the last year to move into an office, or manufacturing spaces than it has done in the past, being aware of decisions around this area is still important. 

With this in mind, we decided to put together an article looking at some of the key reasons why it’s important that small businesses choose the right location to set up. 



Any successful business leader will tell you that one of the most important reasons they are successful is their staff. So often, it’s the people you employ that make a business, and the location of your business can play a crucial role in your ability to attract employees. 

In some industries, employees can find themselves choosing between job opportunities because they are in high demand. When this is the case, businesses need to be as attractive to employees as possible. While offering a competitive salary plays a key role in this, the other aspects of working for the business also plays a key role in convincing potential employees to come and work for you. 

The location of your business is one such aspect. Small business owner David Robinson of Robinson of England told us that one of the reasons he chose to base his business in the North East of England was because “the quality of life you can offer your employees is vital”. This includes the cost of living, local social life and also transportation options. By choosing an area of the country that offers a high quality of life, you will be able to offer more to potential employees than just a competitive salary and an excellent work environment. 


Running costs 

Another vital element for any business is the running costs which come with their operation. This can be as simple as the cost of rent for a shop all the way up to production and manufacturing costs for industrial businesses. The key thing for businesses to remember is that these costs can vary with location. 

Not only can business properties be more expensive in some locations, but wages can also vary. If we compare London to other parts of the UK, the cost of owning or renting a business property is higher. Furthermore, because the general cost of living in London is higher, the wages you need to pay staff are also higher. All of these costs need to be compensated for in your prices to clients. 

Depending on the nature of your business, if you do not rely on footfall customers, and operate more online, then choosing a location that has lower running costs could be more beneficial in the long-term success of your business.  



It’s unusual to find a business area with absolutely no competition anymore. Even if your business is the only one producing a particular product or offering a specific service, there are likely other businesses that could compete with you and offer something similar. 

Location can play an important role in how much competition you face. For this reason, it’s essential to do extensive market research to identify exactly who that competition will be. If you believe you can offer a service or product that your local competition can’t, then you may choose to position your business in the same location as theirs. However, there are also benefits of establishing a business in an area where you are a sole provider and then expand outwards. 


Overall, location is a really important factor in a business’s success. For any new small business starting up, it’s crucial to remember that getting the right location may not happen immediately, and there may be pros and cons of a location that you do not realise until your business is up and running there for a while. It’s important not to get discouraged and remember that there are always alternative locations for your business that you can explore which may offer more benefits and help your business succeed. 

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