location analysis in business plan

Business Location Analysis: The Key to Strategic Decision Making

location analysis in business plan

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Location, location, location! It's a mantra we've all heard before, but how many of us truly understand its significance in the business world? This isn't just about picking any spot on the map. It's about making strategic choices that propel your business towards remarkable growth and success. Let's delve into the crucial factors to consider during business location analysis.

What is business location analysis?

Business location analysis is the process of studying and evaluating potential physical locations for business operations. It's the cornerstone of strategic planning, with a powerful influence on a company's performance, profitability, and overall success. The significance of choosing the right location cannot be overstated—it provides easy access to customers, employees, and suppliers, and can greatly enhance your brand's visibility.

Choosing the right business location is a crucial step in your company's journey. It's more than just a place—it's the setting for your story and the stage for your success.

Why do businesses use location analysis?

location analysis in business plan

Location analysis pops up as a champion in the realm of business operations, offering a strategic edge to businesses across the globe. It's more than just pinning a spot on the map – it's about designing a roadmap to successful business outcomes. It's the silent hero behind boosting your business' competitive edge, accessibility, and brand visibility.

1. Competitive Edge: Become the Market Leader

Location analysis aids in identifying the best locales to set foot in, where competition is minimal and opportunities are abundant. This is where the magic of strategic positioning comes into play.

By understanding the competition landscape, businesses can strategically place themselves in a position that sets them apart, helping them get ahead in the race.

2. Customer Accessibility: Be Where Your Customers Are

Location analysis also plays a vital role in making businesses more accessible to customers. It’s not about being in the most popular spot, but being in the right spot where customers can easily find and reach you.

  • Convenience: A location that's easy for customers to reach can significantly boost your business.
  • Visibility: Being in a spot where you’re easily seen can naturally attract more customers.

3. Brand Visibility: Shine Above the Rest

Brand visibility is about more than just being seen – it’s about being remembered. Location analysis helps position your business in an area that not only garners high foot traffic, but also aligns with your brand identity.

Whether it's a bustling city center or a serene suburb, the right location can amplify your brand’s presence, ensuring you're not just seen, but also remembered.

4. Optimizing Operational Efficiency

Location analysis optimizes business efficiency. A strategic location enhances logistics, influencing factors such as supply chain efficiency , distribution convenience, delivery speed, and employee commute. The right location streamlines operations, saving time and resources.

Beyond operations, an ideal location grants access to crucial business services like banking, legal, and marketing consultancy. It facilitates not just survival, but also growth.

Because when we think location, we think efficiency. And in business, efficiency isn't just a buzzword - it's a lifeline. So, are you ready to optimize?

Components of Effective Business Location Analysis:

location analysis in business plan

Data Collection:

Any savvy entrepreneur knows that location is key. But how do you determine the right location for your business? It starts with data collection. You'll need to gather and analyze a variety of data types to make an informed decision. Let's break it down:

  • Demographic Data: This is the first type of information you need. Who are your customers? What are their ages, income levels, and occupations? You'll want a location surrounded by your target demographic.
  • Traffic Data: How many people walk or drive by the potential location each day? More foot traffic could lead to more customers. But remember, that traffic needs to align with your target demographic.
  • Competition Data: What other businesses are in the area? Other businesses could be complementary, boosting your sales. Or they could be competitors, potentially taking away customers.
Remember, data should guide your decision, but it shouldn't make it. Use the data to inform your choices and align them with your business goals.

It's a tricky balance, but armed with the right data, you can make a choice that sets your business up for success.

2. Spatial Analysis & Visualization:

Gas Station Density in Saudi Arabia's Key Regions

When it comes to running a successful business, location is key. That's where Spatial Analysis and Visualization come into play, taking us on a deep dive into the world of Geographic Information Systems (GIS).

GIS serves as a powerful tool in the analysis and interpretation of geographic relationships, patterns, and trends. It integrates hardware, software, and data to capture, store, analyze, and interpret all forms of geographically referenced information. Essentially, it allows us to view and understand data in ways that reveal relationships, patterns, and trends in the form of maps, globes, reports, and charts.

"A Geographic Information System (GIS) helps businesses to visualize, question, analyze, and interpret data to understand relationships, patterns, and trends."
  • Mapping: GIS converts complex data into a visual format, simplifying the process of decision making. It can display demographic data, consumer behavior, and competitor locations in an easy-to-understand map.
  • Analysis: GIS analyzes the data to identify patterns and trends. It provides insights into the best locations for business expansion or the areas that are most profitable.

Incorporating GIS into your business location analysis allows you to make informed decisions based on concrete data. It's like turning on a light in a dark room, illuminating opportunities and potential challenges that were previously hidden.

Benefits of Using GISExamplesEnhanced Decision MakingChoosing the best location for a new store or officeImproved CommunicationVisualizing potential business growth areas for stakeholdersIncreased EfficiencyRouting deliveries to reduce fuel consumption and save time

As we dive deeper into the realm of location analysis, it's crucial to recognize the role of Geographic Information System (GIS). In today's tech-savvy world, GIS tools are transforming the way businesses analyze their location choices. These powerful tools offer a range of benefits, all contributing to a more informed and smart decision making.

3. Predictive Analytics:

location analysis in business plan

Imagine having a crystal ball that foretells how your business would fare in different locations before you even set foot there. That's precisely what predictive analytics offers! This remarkable blend of technology and statistical methods can help you anticipate potential performance in various locations based on historical data, customer behavior, market trends, and more.

How does it work?

  • Predictive models gather data: First, these tools collect a wealth of valuable data from various sources, such as customer databases, demographic information, and market research.
  • They analyze the data: Next, they use advanced algorithms to analyze this data, identifying patterns and trends that could impact business performance.
  • They forecast future outcomes: Based on these patterns, the models can then make predictions about how a business might perform in different locations.

Businesses can use these forecasts to guide their location-based decisions, helping them choose spots with the highest potential for success. But remember, while predictive analytics can be an incredibly valuable tool, it's not infallible. It's always important to consider other factors, such as your business goals, target audience , and competition, to make the most informed decision possible.

Ultimately, predictive analytics is like a compass guiding your business through the complex landscape of location-based decision-making. It helps you avoid the pitfalls of choosing a location based on gut feelings alone and increases your chances of setting up shop in the most favorable locations.

Real-world Applications and Success Stories:

Let's look at some real-world applications and success stories that exemplify the power of strategic business location analysis.

Case Study 1: Starbucks

Starbucks, a global coffee juggernaut, is renowned for its strategic location choices. The company uses a sophisticated location analysis system, incorporating data like traffic flow, area demographics, and nearby businesses. This strategy has been key in their worldwide growth and success. source

Case Study 2: Walmart

Walmart, a multinational retail corporation, stands as a testament to the effectiveness of location analysis. The company focuses on establishing its stores in small towns, where competition is minimal. This strategy, combined with its vast product range and competitive pricing, has led to Walmart's dominance in the retail market. source

Case Study 3: McDonald's

McDonald's, a global fast-food chain, attributes much of its success to location analysis. The company strategically places its restaurants near highway exits, busy city centers, and suburbs. This approach, paired with their quick service and popular menu, has solidified McDonald's status as a fast-food leader. source

In conclusion, these case studies highlight the immense power of location analysis in business strategy. It demonstrates how, with careful consideration and smart decision-making, businesses can leverage location to maximize brand visibility, profitability, and growth.

Challenges in Business Location Analysis:

Choosing a business location is akin to playing a high-stakes game of chess. One wrong move can spell disaster for your venture. Yet, while choosing the right location can be daunting, understanding common pitfalls can ease the process.

  • Common Pitfalls and Misconceptions: Many entrepreneurs fall prey to the misconception that a cheap location means higher profits. It's crucial to understand that a location's value is not solely determined by its cost, but also by its accessibility, demographic alignment, and potential for growth. Weigh these factors before making a decision.
  • Overcoming Data Inaccuracies: Quality data is the bedrock of informed decision-making. Ensure the data you base your choice on is accurate, up-to-date, and relevant. Misinterpreted or outdated data can lead to costly mistakes.
  • The Evolving Nature of Neighborhoods and Local Markets: Neighborhoods and markets are fluid, continually changing and evolving. A location that seems perfect today might not be the same in a few years. Always consider long-term projections and future growth trends in your analysis.
Remember: You're not just choosing a location, you're choosing a future. Make sure it's one where your business can thrive.

How xMap Can Empower Your Location Analysis?

Unlock the potential of your business with xMap , a cutting-edge platform that transforms location analysis. With a plethora of features at your disposal, xMap empowers you to make strategic, data-backed decisions about your business location. Here's how:

  • Data Visualization:

xMap's intuitive interface presents data in a visually appealing and easy-to-understand format. This enables businesses to analyze complex data sets effectively and make informed location decisions.

  • Comprehensive Database:

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With xMap, gain access to a vast database of demographic, geographic, and economic data that can be crucial in selecting the perfect location for your business.

  • Advanced Analytics:

Use the power of xMap's advanced analytics to uncover hidden patterns, trends, and insights that can significantly impact your location strategy.

With xMap, the power to choose the right location for your business is literally at your fingertips. The platform's unique combination of data richness and user-friendly design makes it an invaluable tool for businesses of all sizes.

Now, let's talk benefits. The advantages of incorporating xMap into your business strategy are manifold:

  • Increased Profitability: By providing you with actionable insights based on data, xMap aids in selecting locations that promise maximum profitability.
  • Improved Decision Making: xMap's data visualization and advanced analytics facilitate better, quicker decision-making, saving valuable time and resources.
  • Competitive Edge: With access to comprehensive data and analytics, you can stay ahead of the competition and identify untapped market opportunities.

Ready to take your business to new heights? Don't wait any longer to harness the power of location analytics with xMap. Whether you're a small startup or a well-established corporation, xMap has got you covered. Explore xMap today or get in touch for a personalized demo.

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10 Factors to Consider During Business Location Analysis (2021)

Selecting the best location for your new business is a decision that you should not take hastily.

Your first consideration in terms of comfort and cost concerns is to go on a quest to find the perfect location for your business.

In this article, we are going to shed more light on the concept of business location selection and then go deeper to discuss the terms of business location analysis and business location strategy and talk about their importance on business location selection.

Business Location Analysis: Definition and Objectives

Location refers to the choice of the region and the selection of a particular location for establishing a business or a factory.

But the choice is made only after the cost and benefits of the various alternative sites are considered.

It is a strategic decision, which can not be changed once it has been undertaken.

If the location is only changed at a considerable loss, it should be selected according to its requirements and circumstances. Every plant is a case in its own right.

A businessman will attempt to find the most suitable or ideal location.

An ideal location is one where the cost of the product is kept to a minimum, with a large market share, the least risk, and the highest social gain.

It is the location of the highest net benefit or which offers minimum unit cost of production and distribution.

Business Location Analysis Definition

Location analysis is a dynamic procedure in which entrepreneurs evaluate and compare the suitability or otherwise of alternative sites for choosing the best site for a given client. It is composed of the following:

1. Demographic Analysis

This includes the analysis of population in the region in terms of total population (in numbers), age distribution, per capita income, level of education, occupational structure, etc.

2. Trade Area Analysis

This is the analysis of the geographic area that offers the company continued clientele.

This analysis would also consider the possibility of entering the trade area from alternate locations.

3. Competitive Analysis

This analysis helps in assessing the nature, location, size, and quality of competition in a given area of trade.

4. Traffic Analysis

To get a rough understanding of the number of potential customers passing through the proposed site during the working hours of the location, the traffic analysis is aimed at determining possible locations in terms of foot and car traffic passing through a site.

5. Site Economics

Under this section, alternative sites are analyzed in terms of establishment costs and operational costs.

Establishment costs are the costs incurred for permanent physical facilities but operational costs are incurred for running a business on a day-to-day basis, these are often called running costs.

Business Location Analysis Objectives

The location of a business needs to be determined while keeping the following targets in mind:

1. Holding Minimum Investment And Operating Costs

The primary goal of choosing a suitable location is to ensure minimal investment and lower operating costs.

This could be achieved by locating the business in a place where raw materials, labor, transportation, and power are readily, regularly, and sufficiently available.

2. To Make Sure The Business Operation Is Smooth

Another goal of the optimal location is to ensure the business operations are running smoothly.

This could be achieved if the business is located in a place where banking, communication, transportation, repair, and maintenance services are easily and regularly available.

3. To Improve Welfare Of The Employees

If the business is located where educational recreational, media and religious needs of the employees are met, they will definitely feel attached to the business and develop loyalty and commitment to it.

4. To Coordinate With The Government Policies And Regulations

Whilst selecting a location, the entrepreneur must ensure that their decision does not conflict with the policy of balanced regional development issued by the government.

Business Location Strategy Factors

Being in the right location is a crucial ingredient in the success of a business.

If a business chooses the wrong location, it may not have sufficient access to customers, workers, transportation, materials, etc.

Consequently, location often plays a significant role in the profit and overall success of a business.

A location strategy is a plan to achieve the optimal location for a company by identifying the needs and goals of the company and searching for locations with offerings that are compatible with those needs and goals.

In general, that means the company will try to maximize opportunities while minimizing costs and risks.

The location strategy of a business should adhere to its overall corporate strategy, and be part of that plan.

Therefore, if a company dreams and plans to become, for example, a global leader in fashion production, it must consider establishing plants and warehouses in regions that are consistent with its strategy and optimally positioned to serve its global clients.

Executives and managers of a company usually develop a business location strategy but companies however, may select consultants (or economic development groups) to undertake the task of developing a location strategy, or at least assist in the process, especially if they have little experience in location selection.

The standard formulation of a business location strategy includes the following factors:

  • Facilities: Planning facilities requires deciding what sort of room a organization would be required, considering its short-term and long-term objectives.
  • Feasibility: Analysis of feasibility is an assessment of the various running costs and other considerations related to the different locations.
  • Logistics: Logistics assessment is the examination of the transport choices and costs for the manufacturing and warehousing facilities in question.
  • Labor: Analysis of labor determines whether or not prospective locations can meet the labor needs of a company, given its short-term and long-term objectives.
  • Community and Site: Evaluation of the Community and site includes understanding whether or not a business and a prospective community and site would be compatible in the long term.
  • Trade Zones: Companies will want to consider the advantages that free-trade zones provide, which are closed facilities supervised by customs services where goods can be brought in without the normal customs requirement. There are some 170 free-trade zones in the United States and other countries have them too.
  • Political Risk: Companies considering expanding and spreading to other countries must take political risk into consideration when establishing a business location strategy. Because a number of countries do not have stable political environments, if companies plan long-term operations in such countries, they must be prepared for upheaval and turmoil.
  • Governmental Regulation: Companies can also face government barriers and severe constraints and regulation if they plan to expand to other countries. Therefore, when developing location plans, businesses need to investigate regulatory – as well as cultural – challenges in other countries.
  • Environmental regulation: The various environmental regulations that could affect their operations at different locations should be considered by companies. Environmental regulation can also impact the relationship of a company with the environment surrounding a prospective venue.
  • Incentives: Incentive negotiation is the process of negotiating land between a business and a group, including any incentives that the business may obtain, such as tax cuts. Incentives can play an important part in the selection of a site by a business.

Companies may also have to look at other aspects of prospective locations and communities, depending on the type of business. Based on these considerations, businesses are able to choose a site that best serves their needs and helps them develop a business location strategy and therefore achieve their objectives.

Requirements Of The Company

The initial part of developing a business location strategy is to determine what a firm will need from its locations.

These needs then serve as some of the primary criteria that a business uses to evaluate various options. Some of the basic criteria that an organization has to remember are:

  • Size: A business has to determine the size of the property or the facility it requires for its actions.
  • Traffic: If you are in the service business, your company must obtain statistics on traffic volumes or the number of pedestrians passing by a prospective location every day.
  • Population: If you are running a service or a manufacturing activity, your company needs to analyze the population of prospective locations to ensure a sufficient number of potential clients (if a service business is in discussion) or a sufficient number of qualified or trainable employees. Additionally, manufacturers also benefit from being close to their customers, because customer proximity reduces shipping time and cost and increases customer responsiveness for the company.
  • Total costs: Companies should determine the maximum total cost of a new location that they are willing to pay. Total costs include costs related to production, property, labor, taxation, services, and construction. More baffling costs, such as materials for shipping and costs of  supplies transportation and the loss of customer responsiveness should also be considered if it moves further away from the customer base.
  • Infrastructure: Businesses need to consider what their infrastructure requirements are going to be, including what modes of transport they will need and what types of telecommunications services and equipment they will require for their operations.
  • Suppliers: All businesses need to consider the types of suppliers they will need close to their locations. Additionally, having nearby suppliers can help companies lower their cost of production.

In addition to these specific criteria, businesses have to take their particular specifications of prospective locations into consideration. These requirements may be consistent with their overall corporate strategy and corporate goals, and with their specific industries.

Business Location Strategy Trends

Over the last thirty years, globalization and technology have been the greatest drivers of change in the business location selection process.

In recent decades, location activity has been very high due to technological changes, economic growth, international expansion and globalization, and corporate consolidation, mergers, and acquisitions.

Price, infrastructure, labor characteristics, policy and political problems, and the environment are the top five location considerations for global companies.

The availability and quality of labor force, the quality and reliability of utilities, the quality and reliability of transportation modes, telecommunications systems, wage rates, worker motivation, government stability records and industrial relations laws are crucial sub-factors.

Other sub-factors such as patent protection, availability of management resources and specific skills, and cost of system and integration are becoming increasingly important.

Whereas wages and the environment of industrial relations are important factors in making decisions about multinational locations, the main determinant is by far the market size of the host country.

Moreover, global economic considerations have become dominant in the business location strategy, as businesses consider the advantages offered by various locations in terms of positioning themselves on international markets and against other competitors.

In general, when companies seek new locations, they strive to keep operating and start-up costs low, and so they often choose locations to achieve these goals in collaboration with economic development groups.

Companies also now expect to move faster than in the past to new facilities so they tend to focus more on leasing facilities than buying land and building new facilities.

Plus, by leasing equipment and facilities, businesses can migrate every few years if they are required by the market.

Mapchise Technology

Technology, in particular communications technology, has not only been a catalyst of change, but also facilitated the location selection process.

Managers can get initial information via the Internet and promotional software on alternative locations.

Site selection agencies are increasingly using Geographic Information System (GIS) technology, and email has become the most powerful and popular mode of communication in the quest and through negotiation of business locations.

Location databases have allowed businesses to do their own initial screening, thereby reducing their need to rely on economic developers to provide only very basic information and position details — such as commuting habits and workforce characteristics.

This is where Mapchise comes to play. Mapchise is a platform for analytics and location management, designed to expand and manage current and prospecting locations.

The primary purpose is intended for multi-chain prospecting and management.               

Analytics Map is built on demographic analysis for prospect locations. This concept is the primary product and principal selling point of Mapchise.

It consists of three different sources of data: Demographics and Socio-demographic (still in production), Commercial Real Estate, and Residential Property. Socio-demographic is a categorization of different age groups, race, and income.

The main features of this product include:    

  • Commercial Real Estate Data (Data is for all of US)
  • Competitor analysis                                                               
  • Customized target demographic reports to clients needs                                                    
  • Socio-demographic data                                                                   
  • Real estate data
  • Traffic and regional market analysis                                                             
  • Territory zoning to prevent canabolization                                                                
  • Different layers customized to clients target demographic   

Why Choose Mapchise?

  • It provides all the data you need to open a location easily. The data is also proprietary so it won’t be found online for free.
  • Task management system is designed and built for multi-chain stores and ease of use by corporate and store management.
  • Fully Customizable analytics system designed for the users target market and target demographic, the map and data are built around users provided target market. After answering a few simple demographic questions, the map is fully customized to users’ input.
  • Competition Analysis on the map
  • Task management system is incorporated into the map for easier management of all locations tasks

How To Find The Best Location For Your Business?

Every business owner has to figure out how the location will (or will not) contribute to the success of a business — and select a spot according to it.

Although when you are looking for a space to house your business, there are many issues to consider, make sure you ask yourself these four important questions:

  • Is location significant to the success of your business?

What kind of location would be best for your business?

How much rent you can afford to pay.

  • Is the location you have in my mind appropriate for what you want to do there?

Is Location Significant To The Success Of Your Business?

The classic “location, location, location” advice for some businesses is right on the mark— location can bring the difference between feast or famine into reality.

But location may be far less important for other businesses than finding affordable rental space.

In fact, for some businesses, the location is almost irrelevant: service businesses that do all their work at the locations of their customers (such as roofers and plumbers) and businesses that have little public contact (such as mail order companies, Internet-based businesses, and wholesalers).

Picking a low-cost spot in an out-of-the-way location might be a benefit because these types of businesses can pass on rent savings to their clients and their profit margin.

The key to choosing a profitable location is to evaluate the factors that will increase the amount of customers for your company. Ask yourself questions such as:

  • Will customers be walking to your location?
  • Will customers drive and, if yes, where will they park around your area?
  • If you locate near other similar businesses, will you receive more customers?
  • Will the reputation of the neighborhood or even of a specific building help you attract more customers?

Bear in mind that different types of businesses draw clients in different ways.

Foot traffic versus car traffic is one of the main distinctions.

For example, if you are opening an urban coffee shop, you can expect your customer volume to be the highest if there is plenty of pedestrian traffic nearby during the hours you plan to keep your business open.

On the other hand, the most suitable locale for an auto repair shop is a well-traveled street where many drivers will see the shop, and are able to easily pull into the lot.

Note also that it would be of benefit to your business to be around similar businesses that already attract the same type of customers you are planning attract.

For example, a women’s clothing store will certainly profit from being close to other clothing shops because many people who shop for clothes prefer to spend at least a few hours in a given location.

In the end, the perfect location for any business is a very individual matter. Spend some time finding out the consumer preferences you would like to draw to your business, and then pick the most suitable location that meets all your needs.

Chances are that you will eventually rent out instead of buying a space for your business.

Most small businesses do not posses the funds to purchase real estate, and in any case it is not necessarily a smart idea to saddle the company with high interest payments.

When looking for a commercial space to lease, one obvious and important concern is finding a location that you can afford.

When preparing your financials (as part of your business plan), you would have calculated how much rent your company will be able to pay on a monthly basis, considering its expected sales and other expenses.

How to assess the average rent in any area?

Agents and brokers are excellent sources of rental cost knowledge in different neighbourhoods.

They will generally give you an average figure for the cost of commercial space per square foot per year in a given area. If you have this number, you can compare it to other spaces you are considering to rent.

If you have not already done so, check out the average rental costs in your area to make sure that the amount you have budgeted for rent makes sense, considering the cost of commercial space in your area, and how important your location is to your business.

For instance, if you decide that location is very important to the success of your business, make sure your budget would allow you to rent a good space given the average cost of space in your area.

If not, then your business plan may need to be reworked.

Is The Location You Have In My Mind Appropriate For What You Want To Do There?

The biggest consideration when choosing a business location is sometimes not where it is but what it is.

The building facilities must be suitable for (or adaptable to) your business. For instance, if you intend to open a coffeehouse, you need a place with limited kitchen facilities, at least.

Unless you are able to convince the landlord to put in the necessary equipment — plumbing, electrical work, and the rest — it is highly unlikely that it will be worth it to lay out the cash to do it yourself.

In short, if a building lacks something substantial that is essential for your business, you should probably look for something else.

Communications Wiring

Another consideration that is important for many businesses these days is having access to modern phone and other data lines that are required by the business.

When considering a particular space, ask the agent or the landlord for communications wiring details, such as whether the space is connected to a fiber optic network or wired for DSL or T1 line (high-volume Internet connections).

Even try to find out who the landlord sold the rights to the risers (wire conduits) in the building. A commercial landlord can not be involved in exclusive contracts with a single provider of telecommunications, such as MCI or AT&T.

It could however be expensive to bring in another provider of your choice.

Electricity and Air Conditioning

Besides high-tech communications wiring, when choosing a business space, do not overlook plain-old electrical power as an important consideration.

Make sure that every room you are looking at has enough power for your needs, both in terms of space outlets and the capacity of the circuits.

If you are going to be operating machinery or other electricity-hungry equipment, find out how much energy the circuits can tolerate from the landlord, and if a generator is available during power outages.

Moreover, if you are going to keep sensitive computer equipment in your office, ask the landlord how many hours of air conditioning will be included in the terms of your lease, and if necessary negotiate longer hours.

Another growing requirement for many businesses is sufficient car parking.

If a significant percentage of your customers come to your establishment by car and there is not enough parking at your chosen spot, looking elsewhere is probably the best alternative.

In addition, the city planning or zoning board can not allow you to function in a space with inadequate parking.

Zoning Rules

At last, the location that you choose for your business needs to be legally acceptable for whatever you plan to execute there.

A certain spot may be good for business, but you are asking for trouble if it is not zoned for what you are planning to do.

You must never sign a lease without being sure that you will be allowed to operate what you are planning in that space.

Your city planning or zoning board will determine what activities are allowed at a given location.

If your zoning board is having a problem with any of your business activities and you are not willing to work out a way to accommodate your company, you may need to find another space for your business.

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Business Location Analysis: Definition, Objectives, Factors

Business Location Analysis: Definition, Objectives, Factors

Location refers to the choice of region and the selection of a particular site for setting up a business or factory.

But the choice is made only after considering the cost and benefits of different alternative sites. It is a strategic decision that cannot be changed once taken.

If at all changed only at considerable loss, the location should be selected as per its requirements and circumstances. Each plant is a case in itself.

A business person should try to attempt at the optimum or ideal location. An ideal location is one where the cost of the product is kept to a minimum, with a large market share, the least risk, and the maximum social gain.

It is the place of maximum net advantage or which gives the lowest unit cost of production and distribution, for achieving this objective, this purpose.

What is Business Location Analysis?

Location analysis is a dynamic process where entrepreneur analyses and compares the appropriateness or otherwise of alternative sites to select the best site for a given enterprise.

It consists of the following:

Business Location Analysis

Demographic Analysis

It involves the study of population in the area in terms of total population (in no.), age composition, per capita income, educational level, occupational structure, etc.

Trade Area Analysis

It is an analysis of the geographic area that provides continued clientele to the firm. He would also see the feasibility of accessing the trade area from alternative sites.

Competitive Analysis

It helps to judge the nature, location, size, and quality of competition in a given trade area.

Traffic Analysis

To have a rough idea about the number of potential customers passing by the proposed site during the working hours of the shop, the traffic analysis aims at judging the alternative sites in terms of pedestrian and vehicular traffic passing a site.

Site Economics

Alternative sites are evaluated in terms of establishment costs and operational costs under this.

Costs of the establishment are the cost incurred for permanent physical facilities. Still, operational costs are incurred for running a business on day to day basis, they are also called as running costs.

Objectives of Business Location Analysis

Objectives of Business Location

The location of a business must be decided to keep in mind the following objectives:

To hold minimum investment and operational cost

The foremost objective in selecting an ideal location is to ensure minimum investment and lower operational costs.

This could be achieved if the business is located in a place where raw materials, labor, transport, and power are easily, regularly, and sufficiently available.

To ensure the smooth operation of the business.

Another objective of the ideal location is to ensure the smooth operation of the business.

This could be achieved if the business is located in a place where the services of banking , communication , transport, repairs, and maintenance are available easily and regularly.

To promote employee welfare.

If the business is located where the educational recreational, medical, and religious needs of employees are met, they will certainly feel attached to the enterprise. They would develop loyalty and commitment to it.

To co-ordinate with Government Policies.

The entrepreneur , while selecting a location, must ensure that his decision does not conflict with the government policy of balanced regional development.

Factors to be Considered in Selecting a Business Location

Factors to be Considered in Selecting a Business Location

Selecting the ideal business location is guided by four main factors, namely:

Nature and Type of Business

The nature and type of your business is the single greatest determinant of where the business should be located. Businesses that rely on walk-in customers from the public are the most affected, the main ones being in the service industry.

If your business relies heavily on walk-in clients as opposed to businesses that prospect, then location is everything. Getting your location wrong can spell doom for your business.

In the restaurant business, for example, there are three “main” rules when setting up. These are “LOCATION, LOCATION, and LOCATION.”

This example underscores the importance of a great location for restaurants.

A study of McDonald’s reveals this to be true. Senior management at MacDonald’s will tell you that they are burger salespeople, but their business is real estate.

Therefore, businesses such as restaurants, supermarkets, liquor stores, Ice cream parlors, and the like must be located in easily accessible areas with high levels of human traffic.

In contrast, businesses such as law firms, accountants, software firms, and so forth, which do not rely on high levels of human traffic, can be located in posh offices within office blocks.

The amount of money you can afford to obtain premises must, of course, come into play. Most first time entrepreneurs will be renting due to budget constraints.

Always try and secure premises that provide the best value for your money, considering the nature of business.

Space required

Certain types of businesses require very large amounts of space.

For example, car dealerships and car rentals require a large space to park their vehicles. This may mean looking for an out of cheap town location.

Special facilities needed

Certain types of businesses require special facilities to carry out their business effectively. For example, IT companies have some very special mechanical, electrical, plumbing, and fire suppression requirements.

Server rooms and computer areas need dedicated cooling units. These must be taken into consideration before settling on a business location.

At one point, we may want to determine the size of the business . This helps in knowing whether it’s growing or not.

Also, you ascertain it to plan its various requirements. If you know the size of your firm , then you’re able to determine its efficiency. Any enterprise is the ether; small , medium or large size .

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Tips on Choosing the Right Location for Your Business

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Table of Contents

Choosing a location is one of the most important aspects of starting a brick-and-mortar business and ensuring its long-term success. Location is particularly crucial for retail stores and restaurants that rely on foot traffic, accessibility, atmosphere and the right clientele. 

We’ll share how to analyze your requirements and options to choose a space where your employees, customers and business will thrive.

How to choose the right business location

When you’re starting a business , selecting the right location can be the difference between success and disappointment. If you’ve already completed your business plan and chosen an awesome business name , take the following steps before signing a commercial lease or buying commercial real estate : 

  • Set a budget for your business location: Pinpoint how much of your business budget you can spend on a commercial lease or building purchase. You don’t want to fall in love with a location you can’t afford.
  • Outline your business’s specific needs: Your business type and industry will inform your location’s specific needs. For example, if you’re starting a restaurant , your needs will be very different from a sales office that requires an office layout with ample conference room space and private offices. Will your parking area need to accommodate many employees and customers? List your requirements to avoid wasting time evaluating properties that won’t fit the bill.
  • Determine crucial tax implications: Consider any prospective area’s state and local tax implications. Depending on your industry, it may be wise to seek a location inside or outside a specific zone or municipality to enjoy tax benefits.
  • Research government incentives: Federal and state incentives for small businesses exist in some industries. Choosing a specific location may qualify you for certain incentives. If so, it behooves you to focus your location search on a specific area or business-friendly state . 
  • Research your target audience: Where do your customers live and work? It’s crucial to choose a location your target market can easily access or frequently visit. Understanding your customer base will inform your location decision. If you’re partial to a specific area but aren’t sure if it’s a match for your target audience, thoroughly research the area’s demographics to gain a clear picture of product or service demand and disposable income levels. 
  • Research an area’s specifics: If you’ve found an area in your budget that’s amenable to your target audience, dig deeper. For example, understanding the area’s zoning laws is crucial. Look at zoning maps so you understand what business activities are allowed. If you’re a retail store or restaurant, considering commercial zoning proximity to residential areas can be essential to ensure direct access to foot traffic. Make it your business to know an area inside and out.
  • Plot competitors’ locations: If you want to move forward in a specific area, perform a competitive analysis to assess the competition’s presence and gauge demand for your offerings. You don’t want to move in next door or across the street from a fierce business rival. However, you may not be able to avoid the competition entirely. Understanding your situation is key. 
  • Analyze individual properties: Once you’ve settled on an ideal area and found individual properties to consider, start comparing their pros and cons. Vet specific properties’ qualities, including office or building size, furniture, parking lot size, amenities, lease terms and more. Is the actual building or space somewhere your team and customers will enjoy spending time?

Factors to consider when selecting a business location

Before signing on the dotted line, numerous additional factors will influence your business location decision. Some may not apply to your specific industry, while some will be crucial determinants.

Consider the following factors before making your business location decision.

What other businesses are nearby?

Beyond understanding where your competitors are, it’s crucial to consider other nearby businesses. Specific business types may complement your offerings, especially if you’re a retail location or restaurant. You may share customers with similar demographics or your neighbors may be excellent allies. 

For example, choosing an office location near a deli and a dry cleaner can provide conveniences for your employees. If you’re a florist, nearby proximity to a baker may lead to customer overlap. Collaborating with other businesses in your location is a bonus that can help create a prosperous economic environment for all.

Does the location provide good foot traffic? 

Excellent foot traffic can be the crown jewel for specific small businesses, including retailers and restaurants. Foot traffic can boost the success of your local marketing strategies and help your business grow. Assess your chosen location’s foot traffic by visiting the area at various times to see how the crowds ebb and flow. Will your business benefit from the foot traffic level? If you’re weighing several great business locations, foot traffic may become a deciding factor. 

Is the location convenient for vendors and suppliers? 

If your business relies on frequent inventory infusions, proximity to your vendors and suppliers can be critical. An inconvenient location may lead to frequent delays and unhappy customers who can’t get the items they want. 

Is your location accessible to employees and customers?

Customers and employees must be able to access your location ― particularly if you’re operating a retail brick-and-mortar store. Evaluate any potential location’s on-site parking and accessibility to highways and major roads. 

How crucial is your business location?

This may seem like an obvious question but consider how the location will impact your business. A retail store’s location may be much more critical than a company’s office headquarters. Consider your customers and employees and how the business’s location will impact them. If the specific location doesn’t matter as much, you can place more importance on things like building amenities and affordability. 

Will your business receive ongoing shipments of goods?

If you’re working in the industrial sector or running a business that receives large supplies of goods, it’s best to choose a location with warehouse storage space and easy delivery options for clients and customers. A business that specializes in shipping and holding goods needs specific structural amenities, such as loading docks.

Will you conduct meetings at your business site?

Consider how your clients will utilize your location. If you meet with customers regularly, you need an accessible location with reception areas, waiting rooms and conference rooms. If no clients ever visit, you may instead prioritize things like a robust business phone system and technical infrastructure. 

Will your customers and employees need dedicated parking?

Consider your company’s size when choosing a business location. Your employees will likely have to drive to your location. If that’s the case, is parking available? Similarly, if you’re meeting regularly with clients and customers, you need convenient parking options for them. Sometimes, the most important aspect of a business location is its free, convenient and accessible parking options.

Why your business’s location is important

Your location is critical to your business’s success for many reasons: 

  • Visibility: Depending on your chosen location, you might make your company more (or less) visible to its target demographic, directly impacting your revenue. 
  • Customer connections: Additionally, operating a business in a convenient location can help you connect with more customers and develop lasting relationships with them.
  • Employee satisfaction: Despite the rise of remote work, many businesses have in-office employees who must spend a great deal of time at the office. A convenient site with an excellent atmosphere and location can help keep employees happy. 
  • Professionalism: Your business location will speak to clients. A professional, attractive location can improve your reputation and how customers see you. However, a shoddier office in an inconvenient location won’t do you any favors. 

According to Statista , in-store and brick-and-mortar retail accounts for 85 percent of total retail sales, demonstrating the importance of foot traffic. If your retail store is in an inconvenient or inaccessible location, you could be missing out on a huge chunk of potential sales.

Getting the most out of your business location

Whether your business deals with customers or is more of an employee-centric office environment, your business location matters. It’s crucial to thoroughly assess how location impacts your operations and choose somewhere that meets your specific business needs. 

Depending on your business type, your location should be inviting and professional, creating a positive association for customers and employees alike.

Matt D’Angelo contributed to this article.


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location analysis in business plan

Location Analysis: Three Questions to Ask

location analysis in business plan

Get data for any location

Location analytics built on spatial data can help find your next business location, but it's only when it's combined with other data that you can understand your customers, manage supply chain issues better, and make your next investment smarter.

First question: Do you need a location analytics solution? Or are you looking for specific data like foot traffic data or points of interest?

location analysis

What people mean when they refer to  “location analysis” or “location intelligence” can cover a lot of ground. Let’s take a look at how they’re typically defined:

Location Analysis: Location analysis, also called site selection,  is the process of collecting and analyzing data on specific locations to ensure its suitability for a company’s specific objectives or planned usage. In other words — “Does this specific site we’re considering have the potential to successfully meet our needs?”

Location Intelligence: On the other hand, Location Intelligence is the practice and processes of gleaning insights by layering and visualizing geospatial data sources with other data sources in order to drive better-informed business decisions.

Geospatial Data: Geospatial data are the specific types of geospatial data that can inform and shape both location analysis and location intelligence. These data types are incredibly varied and can include foot traffic data, points of interest, historical census data, and much, much more.

So the first question really is — which solution is right for you?

Location Analysis

Location Intelligence

Geospatial Data

You’re planning to expand your existing business and need to find the best possible sites for your new locations.

You’re looking for an edge in business planning across expansion, marketing and sales, production or shipping logistics, and more — and want to combine location data with your business intelligence efforts.

You have a location analysis or location intelligence solution in place and want to make sure you’re using the best available data in those processes.

You need to have a better understanding of local or regional regulations and zoning in your expected expansion area to plan and budget appropriately.

You need real-time intelligence on foot traffic, consumer behavior in a region, or migration patterns to better understand your customers’ needs.

Unexpected results indicate something was missed in previous location intelligence efforts and you need additional inputs to find the reasons why.

You’re starting a new business and need a better understanding of where your business would be most successful.

You’re building customer profiles for a specific region and need to ensure your understanding is as deep as possible.

Regional, cultural, or technological changes have altered consumer behaviors and additional data is required to see how that impacts your business.

These use cases are far from exhaustive — but by understanding your needs, you can determine which type of solution is right for you, helping narrow down your search early on. If you're not sure, schedule a meeting with Unacast and we'll be happy to help walk you through things.

Ready to Get Started?

Book a meeting with a location data expert now.

Second question: What other data sources do you want to work with?

Unacast routinely works with consultants , software companies , investors , insurers and others that want aggregated location data to supplement their own data streams (e.g. demographic data, transaction data). In this case, clearly defining how location data is expected to interact with and add to the output of the combined data stream is essential.

The use cases for finance , insurance , real estate , telcos and supply chain logistics are all very different. Dealing with a location data provider with experience servicing the unique needs of your own industry is important. Otherwise, you’ll likely overspend on a kludgey data set that's tough to ingest and even harder to use.

location analytics

While the demographic data requirement (age, education, income etc.) is most pronounced in retail site selection use cases, it is becoming very common for the insurance industry and real estate investment industry to want some level of insight into the demographic makeup of a given region or consumer profile.

Likewise, when combined with a company’s transactional or customer data, location intelligence and human mobility data can paint a portrait of movement, intent, and consumer action. Further fused with the accurate demographic data mentioned above, this often reveals hidden insights.

So maybe a better question to ask is what data types are available and how are they typically used?


Typical Uses

Points of Interest Data

Points of interest (POI) data includes a wide variety of specific, non-residential physical locations such as businesses, government buildings, landmarks, and more. It typically includes data like street addresses, phone numbers and connections to companies.

Retail, Real Estate, Supply Chain, Forecasting, Site Selection / Location Analysis, Site Performance

Property Data

Property data is concerned with the actual physical boundaries of locations such as property lines and the shapes of buildings. It can also include smaller divisions such as individual apartments, offices, or shops within larger buildings.

Real Estate, Insurance, Site Selection / Location Analysis, Site Performance

Mobility Data

Mobility data is data about when and where people move. It’s aggregated from multiple sources — including GPS information from individual devices. Because mobility data sources are so granular, this data is anonymized and often cleaned using machine learning to provide not only a more stable dataset, but in order to provide ethically-sourced data that maintains privacy.

Retail, Financial Services, Telco, Real Estate, Site Selection / Location Analysis, Site Performance

Transaction Data

Building on mobility data, transaction data anonymously catalogs how people are spending their money by aggregating credit card based retail and ATM transactions.

Retail, Commercial Real Estate, Site Selection / Location Analysis, Site Performance

Demographic Data

Focused on specific population details, demographic information is often sourced from census data and can include things like age, gender, income, housing costs, and more.

Retail, Insurance, Real Estate, Financial Services, Telcos, Site Selection / Location Analysis, Site Performance

Address Data

Critical to accurate location intelligence, this data can be provided in the form of street addresses or coordinates.

Boundary Data

Boundary data is similar to property data — just at a larger scale and including multiple properties, addresses, and points of interest. This data can cover everything from country borders to specific counties, school districts, and zip codes.

Insurance, Supply Chain, Real Estate, Site Selection / Location Analysis

Environmental Data

Environmental data is concerned with naturally occurring events — climate and inclement weather, elevation, animal migration patterns, tides, and more.

Insurance, Real Estate, Site Selection / Location Analysis

Street Data

More than just a map of the streets, this data often includes traffic information and the causes of that traffic.

Retail, Supply Chain, Real Estate, Site Selection / Location Analysis, Site Performance

Imagery Data

Imagery data includes aerial and satellite imagery to provide photographic representations of locations.

Third question: Are you more interested in geospatial data as a tool of competitive intelligence?

site selection

Location analysis for site selection is important, but it's only a single part of a broader location intelligence effort. Location data can be used throughout the enterprise, to help manage the supply chain, keep an eye on the competition , improve business processes, or conduct a growth analysis.

In one supply chain use case, a leading paper goods supplier studied how the exodus from offices affected their need to deliver goods. They discovered which products — and when and where they needed to move them — had drastically changed in downtown business areas.

In one very cool use case Unacast examined, a major retailer conducted a detailed competitive intelligence process to find out where their target market currently shops and how they move between different brand locations and then used this data to find their ideal location.

Business processes can be improved by location analysis in a variety of ways.

For instance, by understanding when customers shop by analyzing  foot traffic, you can more efficiently schedule your staff. By understanding how your host community or facility is growing, you can plan your own growth more intelligently. By understanding who else your customers visit , you can inform key marketing relationships and tactics.

The point is, the business applications for location analysis are as broad as the datasets at your disposal. Narrowing down to what matters for your specific use case is part of the art of location data science.

A few words about site economics and logistics

It’s important to consider the total costs of a potential site for your business. Even if the location seems perfect, several factors can impact its economic feasibility, causing the business to be unsuccessful. You probably know them well, but here are a few basics to consider:

  • Do you want to buy, build, or rent space?
  • What renovations are required before you use the space?
  • Who is responsible for maintenance and repairs going forward?
  • How close is the site to distribution centers and your suppliers?
  • How will your staff get to and from work?
  • Ditto for customers getting to and from your location?
  • Is your host community growing?
  • If so, how are demographics shifting?
  • How does that affect your potential workforce?
  • What does it mean for localized foot traffic patterns around nearby points of interest?

Frequently asked questions about location analytics

What does location analysis include.

A location analysis should include the following elements:

  • Demographic analysis: Understanding population data, such as age, income, and lifestyle, can determine if your target market is present in the area and if your products or services will be in demand.
  • Market analysis: Understanding the local competition, market saturation, and market trends.
  • Site analysis: Evaluating the physical characteristics of a potential location, including access, visibility, and foot traffic.
  • Accessibility analysis: Analyzing transportation and connectivity, such as proximity to highways, public transportation, and pedestrian access, can help determine the accessibility of the location for customers and employees.
  • Economic analysis: Understanding the local economic conditions, such as unemployment rate, per capita income, and real estate market, can help determine the economic viability of a location.
  • Environmental analysis: Evaluating environmental factors, such as natural hazards, environmental risks, and sustainability, can help determine potential risks.
  • Geographic information systems (GIS) analysis: Utilizing GIS technology and geospatial data, such as human mobility data and demographic data, can help you make an informed decision about your potential investment.

What is the importance of location analysis?

Location analysis helps businesses make informed decisions about selecting their ideal physical locations, which can have a significant impact on their success. It also helps businesses make better decisions more quickly in the future. Some of the key benefits of location analysis include:

  • Intelligent site selection: A thorough location analysis helps businesses make the best possible choice for their business in determining a new location.
  • Better market understanding: Location analysis requires companies to gain a comprehensive understanding of the local market and determine the potential demand for their products or services.
  • Increased efficiency: By analyzing transportation and other accessibility factors, businesses can determine the best locations to optimize for foot traffic, efficient operations, supply chain, and distribution.
  • Reduced risk: Location analysis can help mitigate potential environmental and economic risks.

What is location analysis in the context of a business plan?

As discussed above, location analysis is the process of gathering and analyzing data in order to analyze a site, or multiple sites, for a potential business location. A location analysis is part of a comprehensive business plan that includes examination of the physical, economic, and demographic characteristics of a potential location. The purpose is to determine the viability of a particular location for the business and to provide information that will inform strategic decisions.

What are the different location analysis methods?

How you approach your location analysis depends on your needs, but several common methodologies include:

Analysis Type

Demographic analysis

This analysis uncovers details about the population and can include things like age, gender, income, housing costs, and more.

Market analysis

This analysis looks at the competitor landscape from a geospatial point of view — helping know the distance between your proposed location(s) and competitor locations, residential areas, and even commuter routes and spaces.

Foot traffic analysis

This mobility-based analysis is concerned with how consumers move through a region or even specific property, like a mall, and helps inform.

Accessibility analysis

Accessibility analysis better helps you understand the mobility between not only where your customers and workforce live and your proposed sites, but also how a site impacts supply chain logistics as well.

Economic analysis

Understanding the current economic growth or downtrend in a specific area and future projects for changes to that growth or lack thereof help you make more strategic decisions during site selection.

Environmental analysis

Focusing on historical environmental data and current trends including climate and inclement weather, elevation, animal migration patterns, tides, etc., this analysis can impact multiple aspects of your business such as insurability, supply chain logistics, and seasonal changes in consumer behavior.

What is the purpose of a location strategy?

The purpose of a location strategy is to ensure that a business is located in the best possible place to maximize its chances of success.

Don't just ask questions about location analysis, get the answers you need. Schedule a meeting now with one of our friendly location data experts, or request a data sample to get started.

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How to Choose the Right Business Location 10 Factors You Should Know

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Ayush Jalan

  • December 12, 2023

How to Choose the Right Business Location 10 Factors You Should Know

Choosing a business location is one of the key decisions you’ll have to make as an entrepreneur. Doing so shouldn’t be based on a personal whim, but rather on a detailed understanding of your needs and limits. To do this, you need to understand how you can choose the right location.

In this article, we’ll see how to pick the right location for your business, and the factors that influence your decision.

Why is it important to choose the right business location?

You’ll need to make a strategic decision regarding the state, city, and neighborhood where your business will be located in order to select the right taxes, zoning laws, and regulations. It also affects the factors that influence your operations, profitability, scalability, expenses, etc.

A well-planned location can help you increase your market share , reduce labor and raw material costs, minimize risk, and take advantage of local laws and policies.

“The precept that location is key to the success of a business applies to art, and even to life itself: we thrive or wither depending on how nourishing our environment is.” – Yann Martel

How to pick the right location for your business

Picking the right business location depends greatly on what you want that location to do for you.

How to pick right location

Asking the following question can be a great start to conducting your location analysis:

  • What is the size of your future shop or office?
  • What are your infrastructure requirements? Are you looking for a place to set up shop or to build your own office?
  • What’s your budget to set up the new location?
  • Do you need to be closer to a particular supplier for raw materials?

Depending on your business, your requirements will vary. Once you’ve identified your company needs, look at the factors that affect your business location to get a better idea of your options.

Factors influencing business location

Several factors determine how your business functions and sustains itself. These are some of them you should consider before picking your business location:

1. Proximity to target customers

Find where you target audience is

In most cases, it pays to be in a location where there’s a high demand for your product. However, depending on your business type, you can decide whether you need to be near your target customers.

For instance, if you’re planning to start a restaurant , it might be more profitable to be in an urban locality where people eat out frequently. Conversely, if you plan on starting a manufacturing business , being close to your target customers might not be a priority.

Regardless of your business type, your proximity to your customers becomes more significant if:

  • Your product life cycle is short
  • Your transportation cost is high
  • Your products are fragile
  • Your products require after-sales services

2. Competitors’ location

Picking a location closer to a competitor can impact your business in many ways. Done wisely, it can even turn out to be a good strategy.

If your products have a competitive advantage , setting up a shop near your competitors can work in your favor. Not only can you capture their market share, but also provide your customers with a sense of choice.

Here are the benefits of setting up your business near a competitor:

  • Healthy competition will fuel innovation.
  • You can leverage your competitors’ marketing strategies for your benefit. Since they have already pulled in customers to the area, you don’t have to spend a lot on advertising yourself.
  • Being close to your competitors allows you to strategize better and understand what works and what doesn’t in the market.
  • If you happen to build a good relationship with your competitor, you can even collaborate with them.

If you’re afraid that your competitors’ offerings may outperform yours, you may choose other locations that will place you in the center of the market.

3. Talent acquisition

Find a right Talent

It’s not just customers and suppliers you need to worry about when picking a location; you also need to consider your recruitment needs.

If you plan to build a team, you need to check the following:

  • Are there enough talented workers in the area you can hire?
  • Does the location have good transportation and other facilities?
  • Will the location help boost your staff’s productivity?
  • How far is the location from the nearest residential area?
  • Will you be reimbursing your staff’s travel expenses?

4. Operating and other costs

The location of your business will greatly influence the expenses you will have to incur.

Some of those expenses to look out for are:

  • Transportation of raw materials
  • Product delivery
  • Inventory costs
  • Parking fees
  • Labor costs
  • Electricity costs
  • Water costs

Try cutting your taxes

There are a variety of taxes you would have to pay once you’ve set up your business. These vary depending on state and location. Moreover, some areas favor particular industries, creating favorable tax conditions. So, it’s essential to consider the same before deciding on the location of your business.

A few of the commonly levied taxes on businesses are:

  • Property tax
  • Corporate tax

6. Government incentives

Find a Government Incentive program

Most young entrepreneurs are constantly on the lookout for funding and support. The good news is that some local and state governments do offer help. This can be in the form of financial incentives, business grants , low-interest loans, tax relaxations, and other benefits.

Make sure to research these before you lock your decision.

Some websites where you can find relevant info are:

  • U.S. Chamber of Commerce
  • U.S. Small Business Administration
  • USA Government

7. Government laws and policies

Converse to the last point, there could be several government laws and policies that may restrict or negatively impact your business activities. Make sure to consider these before finalizing your business location.

Some of the aspects you should look into are:

  • Licenses and permits
  • Labor and employment laws
  • Trade barriers
  • Building codes
  • Environmental regulations
  • Advertising regulations

8. Local zoning ordinances

Local authorities have fixed rules and regulations regarding land usage—these laws are called zoning ordinances. Check if your plans of using and modifying the property comply with local laws to avoid running into problems later down the line.

Some locations have laws that deny permits for specific industries or restrict certain business activities. So, verify with the local municipal corporations or similar authorities to ensure you’re allowed to do business in that location.

9. Local community

Local community

While opening your business, it’s crucial to consider the impact of the local community on your business.

Asking the below questions might help you to choose the right business location:

  • Is the community welcoming of small businesses?
  • Does your business benefit the community in any way?
  • Are the local values compatible with your company’s values?
  • Will you be able to foster long-term relationships with the community ?

10. Safety and security

Feeling safe and conducting your business without any disturbances is critical.

Inquire about the following while looking for a location:

  • Is the crime rate in the area high?
  • How well is the policing system enforced?
  • Is there a danger of theft or burglary? Will your inventory be secure?
  • Is it a safe place for you and your employees?
  • Will you need to upgrade the property to safeguard your business?

Choose the right location for your business

Choose the right location for your business

Going through a myriad of business location ideas can often cause decision fatigue due to the irreversibility of the action. However, you can increase your chances of success by evaluating your options via extensive research.

Examine the above factors to analyze your compatibility with your desired location and identify potential fits to check if it’s viable. Make sure to take your time to avoid making the wrong investment. You can even consider hiring an advisor to choose the right business location.

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location analysis in business plan

Ayush is a writer with an academic background in business and marketing. Being a tech-enthusiast, he likes to keep a sharp eye on the latest tech gadgets and innovations. When he's not working, you can find him writing poetry, gaming, playing the ukulele, catching up with friends, and indulging in creative philosophies.

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How to choose a business location

How to Choose the Best Location for Your Small Business

Your business location is a big deal. Whether you’re it’s your first time around or you’re opening a second location , choosing a business location is not a decision you should make on a whim. Your choice can impact your business’s chance of survival.

Why is location important when starting a business?

Choosing a location for business is all about setting your business up for success. You shouldn’t just choose the trendiest building or the cheapest listing. You need to put careful thought into where you want to establish your business. After all, your business location isn’t something you can easily change.

Your business location sets the tone for your business. It adds to what customers think of your business. The business location determines how well you will do. Choosing a location is not a task you should take lightly.

Factors to consider in your business location analysis

There are many factors to consider when finding a business location. You can make a better buying decision by asking yourself questions about your needs and finances.

Below are several business location factors and questions you should ponder as you’re choosing a location for your business.

Things to Consider When Choosing a Business Location Infographic

How much can you afford?

Before you start looking for a business location, you need to create a business budget for your impending expenditure. Your budget is one of the most important business location factors because you’re probably not flush with cash as a new business. How much can you afford to spend on your business location?

Remember, the monthly rent or lease payment is not the total cost of the location. There are other costs to the property.

Find out if you need to pay taxes when you buy a commercial building in your area. Also, think about the cost of property taxes. How much you spend on taxes will depend on your location and whether you buy outright or rent.

Your business location strategy should also consider the average cost of utilities. Older buildings might cost more to heat and cool. You might be able to ask the previous owner how much utilities cost each month.

There might be hidden costs to the building. You might need to do a renovation or install upgrades. For example, you might need to add insulation or run communications cables. You’ll also have to decorate the interior to fit your style and brand. The extent of the necessary building improvements will depend on the building’s age and previous use.

What type of space do you need?

Determine what you plan to use the business location for. Will you only use it as retail space? Do you need a workshop or office? Do you need a storage area or warehouse? Do you need a kitchen or room for specialty equipment?

Knowing what type of building you need will help you decide if prospective buildings are a good fit.

What is your style?

Your business’s brand and visual style can help you rule out certain small business locations. Your brand and your building should be cohesive.

For example, if your business sells vintage superhero memorabilia, a colonial style building with chandeliers might be a mismatch for your brand.

You might be able to decorate the building to suit your brand, but your lease could prevent you from making some changes.

What other businesses are nearby?

Before you buy or rent a building, check out the surrounding neighborhood.

Part of your business location strategy should be based on the amount of competition in the area. If there is a lot of competition, there might not be enough customers for you. Or, you might be able to secure the customers the competition cannot accommodate. If there is no competition, you won’t have customers stolen from you. A lack of competition might also indicate there aren’t customers in the area. It is important for you to do a market analysis to learn about your customers and competing businesses in the area.

Also, find out what businesses are near your prospective location. Will the other business draw in customers that will visit your business, too? Your business might be mismatched with the already existing businesses.

For example, if you are starting a vegan restaurant, buying a building next to a butcher shop would be an odd choice. You probably can’t attract many customers who are visiting the butcher shop next door.

Can you grow with the location?

Consider the potential growth of your company when choosing a location for a business. A small space might be cheaper, but the size might limit your business in the future. As your business prospers, you might need more space. For example, you might need more production space to make more products. Or, you might need a bigger retail area to accommodate more customers.

Think about how the space can grow or adjust with you. Are you able to rearrange the layout? Can you expand the building? If the space can’t grow as you do, you might find your business cramped in a small space in the future.

How easy is the location to access?

Factor in how easy it is for people to get to your business.

First, think about your customers. Do your target customers live nearby? If not, you might not get much traffic into your store. Find out how often your desired customers are in the area.

Consider how easy it is for customers to reach the business location. Does public transportation run near it? Is there a parking lot? Are there parking meters? How far do customers have to walk?

Once customers are in the area, how easy is it for them to find your business? If your business is away from the main shopping area or tucked behind other businesses, your customers might not be able to find you.

Also, figure out how easy it is for customers to get into the business. How handicap accessible is the location? The best business locations will be highly accessible and convenient for your target customer.

Second, think about how you will get supplies and deliveries. Can delivery people easily move items into your business? If you get large shipments on pallets, is there an entrance that can accommodate trucks? The right location for a business has to work for vendors and suppliers.

What is the neighborhood like?

Find out what the surrounding neighborhood is like. Investigate the crime rate and common crimes in the area. You want to be sure you and your customers will be safe. Also, you want to make sure your merchandise and building won’t be harmed.

What are the zoning rules?

Before you purchase a location for business, find out how it is zoned. Local zoning regulations might limit how you can use small business locations. Zoning rules might restrict what buildings can be used for commercial purposes, hours of operation, noise levels, signage types, and chemical usage.

Make sure the building’s zoning designation matches your business’s needs. If it doesn’t, you should probably keep looking for a business location.

How to choose a business location

Finding a business location can be tricky, especially if you don’t know where to start looking. Here are some places that might be able to help you:

  • Your local chamber of commerce
  • A commercial real estate agency
  • Online real estate listings
  • Local small business groups
  • Rental and sale signs in your area

You might need to use a combination to find a place to plant your business. Remember to consider the previous business location factors to narrow down your search.

These views are made solely by the author.

Kaylee DeWitt

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What is Location Analytics?

  • On Oct 21, 2021

Location Analytics

Is your business getting every insight it can from your data? If you’re like most businesses relying solely on charts, graphs, and tables for analysis, the answer is “no.”

Hidden in your data is a massive opportunity: location data. Tap into your location data the right way, a process known as location analytics, and you gain an immediate edge over your competition.

Location analytics utilizes your business’ data to deliver deeper insights than traditional analysis ever could—and when conducted through a fluent GIS mapping software like Maptive, faster and more comprehensive than you ever thought possible.

In this post, you’ll learn how to deploy location analytics with Maptive to access complete, intelligent business insights—before your competition catches on.

Location analytics, also known as geoanalytics, applies location data to traditional analysis to gain deeper, more valuable insights.

Often implemented by large enterprises with multiple locations, location analytics visualizes layers of actionable data and insights through mapping software .

What is Location Analytics Used For?

Location analytics is used primarily for strategic purposes. The practice extracts insights and context other methods can’t, making it ideal for companies that require substantial business intelligence to make critical decisions .

What Are the Benefits of Location Data Analytics?

  • Evaluate the performance of individual locations, territories, and districts
  • Execute a thorough competitor analysis
  • Unlock insights and opportunities concealed by traditional business analysis
  • Place new locations for maximum growth
  • Maximize profitability by optimizing routes, streamlining supply chains, and eliminating poor-performing locations
  • Make better decisions with data-backed analysis at the macro-and micro-level
  • Transform business data into intuitive maps for interactive data visualization

What Types of Businesses May Benefit from Location Analytics?

Any organization with multiple locations or geographically dispersed customers may benefit from location analytics. While use cases are specific to each industry, the sheer concentration of valuable information in geoanalytics data makes location analytics an asset for virtually every department.

  • Sales teams can identify target markets, manage territories better , and track performance across a range of metrics
  • Delivery teams can track deliveries, optimize routes, and make adjustments in real-time
  • Marketing departments can track peak purchasing times, customer behavior and tailor their efforts to a specific location’s demographics

How Do Different Businesses Use Location Analytics?

The benefits of location analytics extend to any organization—business or otherwise. For example:

  • Logistics companies and wholesale distributors, for example, can increase efficiency and eliminate overhead by optimizing their routes and coordinating their teams with data-backed insights.
  • Retailers can discover prime locations for new stores, efficiently manage inventory, and accurately predict customer behavior.
  • Service-based companies, like ridesharing and food delivery services, can improve customer satisfaction, increase revenue, and improve coordination and coverage with the real-time insights gained from location analytics.
  • Real estate agencies and developers alike can identify target markets and opportunities with heat maps .
  • Government agencies and public services, including schools, libraries, hospitals, and police departments, can accurately place locations to best serve their communities.

Necessary Capabilities for Location Analytics

There’s no doubt about it: adding location data to your business’ analysis adds a dimension that’s greater than the sum of its parts. However, that doesn’t imply that all location analysis tools are created equal. In fact, it’s quite the opposite.

To get the most out of your location analytics, certain capabilities are non-negotiable.

Combined with its intuitive interface, full-customization, and enterprise-level mapping technology—powered by Google Maps, Maptive integrates each of these key capabilities, and more, into a robust location analytics software. Try Maptive for free today .

Heat Mapping

Beautifully visualize your sales and population density data to uncover geographic insights. Businesses trust Maptive’s heat-mapping tool to track top-performing markets, identify opportunities, and much more .

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View Marker Data

Get concise breakdowns of each location’s critical data with Maptive’s pie chart clusters and markers tool. This tool plots your locations as easy-to-interpret pie charts to process large volumes of data quickly.

Location Analytics

Powerful Boundary Features

Maptive’s Geographic Boundary Territory tool makes it easy to define, divide, and color-code your business’ territories—by county, state, zip code, and more—for more efficient regional location analysis. You can even create custom boundaries with the Polygon Territory Tool.

location analysis in business plan

Demographics & US Census Data

Boost your marketing and decision-making with demographic insights provided by the U.S. Census. Maptive lets you access population data straight from the software, including population density, age, median household income, race, education, and more.

Demographics Data Mapping

Custom Grouping Capability

Transform your data into data-rich markers. Maptive’s Group Markers by Color Tool color-codes your locations for simplified sorting. At the same time, the Multiple Grouping Tool turbocharges your markers—allowing you to adjust by size, color, and more—for even more insightful mapping.

Map Markers

Fully Customizable Maps

Maptive sets itself apart from the pack with its fully customizable and configurable interactive maps—including the ability to upload custom branded assets, save specific views and zoom levels, and take complete creative control over your presentation-ready maps.

Utilizing Maptive for location analytics is the ultimate competitive advantage, leveraging data you already have into a comprehensive, complete, and fully custom interactive map in a matter of minutes. Want to receive deeper business insights faster than your competition can keep up? Start your free, no-risk, 10 day trial of Maptive today .

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Building a location-savvy community

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Businesses play a vital role in society, from leading innovation to driving commerce and creating jobs that contribute long-term value within organizations and across communities. Location affects every business decision, and location intelligence informs these decisions with answers to key questions including, Where are markets shifting? Where are the best customers? Where are operations at risk? Where are products and services delivered? In a constantly changing world, GIS technology provides greater business intelligence for more successful, resilient organizations that can withstand the most severe disruptions and thrive to better serve their stakeholders.

Quantifying the impact of spatial business advantage

Have you evaluated how location software can impact your business growth and increase resilience? Location technology is transforming how the most competitive organizations use spatial business intelligence to reveal insights and patterns that drive faster, more precise decision-making. When coupled with business intelligence tools, location is the common thread connecting businesses to their customers, operations, and sustainability. Business strategists can understand why business happens where it does and predict where it will happen next.

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High-tech companies, logistics and distribution, manufacturing, real estate, forrester opportunity snapshot.

Understanding customers in a geographic context provides insights about shopping patterns, purchasing behaviors, and more. This Esri-commissioned report explores some of the barriers companies face and how they can overcome them by harnessing the full potential of location technology to reach customers and drive sales.

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Focus areas

Esri technology is used in all areas of business worldwide. Here are some of the major focus areas based on global challenges.

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Advanced customer analytics as markets adjust

Businesses have more customer data than ever. Location intelligence is key to unlocking sales data and creating hyperlocal customer segmentation. Gain insight into the values and habits shaping customer behavior. GIS uncovers patterns in what, where, and why customers buy.

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Dynamic territory rebalancing as demands shift

Businesses are faced with shifting market demands and must be able to quickly assess and reset sales boundaries that directly align with the highest market potential. Location analytics with GIS improves territory visualization, scenario planning, and territory adjustments.

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Assessing portfolio risk during uncertain times

Every business risk is tied to location. It's critical to understand the connection between geography and threats to minimize business disruptions. GIS helps firms assess the cumulative exposure within their assets, policies, real estate, and investments in a single view.

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Spatially analyzing racial inequities to drive change

Use maps and spatial analysis to apply a racial equity lens. Reveal and understand inequities within a business by location and roles. GIS can help identify areas of concern and barriers to equality for informed and equitable decision-making.

Cross industry initiatives

Market development, risk management, business continuity, digital supply network, racial equity gis hub.

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How to Write a Market Analysis for a Business Plan

Dan Marticio

Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money .

A lot of preparation goes into starting a business before you can open your doors to the public or launch your online store. One of your first steps should be to write a business plan . A business plan will serve as your roadmap when building your business.

Within your business plan, there’s an important section you should pay careful attention to: your market analysis. Your market analysis helps you understand your target market and how you can thrive within it.

Simply put, your market analysis shows that you’ve done your research. It also contributes to your marketing strategy by defining your target customer and researching their buying habits. Overall, a market analysis will yield invaluable data if you have limited knowledge about your market, the market has fierce competition, and if you require a business loan. In this guide, we'll explore how to conduct your own market analysis.

How to conduct a market analysis: A step-by-step guide

In your market analysis, you can expect to cover the following:

Industry outlook

Target market

Market value


Barriers to entry

Let’s dive into an in-depth look into each section:

Step 1: Define your objective

Before you begin your market analysis, it’s important to define your objective for writing a market analysis. Are you writing it for internal purposes or for external purposes?

If you were doing a market analysis for internal purposes, you might be brainstorming new products to launch or adjusting your marketing tactics. An example of an external purpose might be that you need a market analysis to get approved for a business loan .

The comprehensiveness of your market analysis will depend on your objective. If you’re preparing for a new product launch, you might focus more heavily on researching the competition. A market analysis for a loan approval would require heavy data and research into market size and growth, share potential, and pricing.

Step 2: Provide an industry outlook

An industry outlook is a general direction of where your industry is heading. Lenders want to know whether you’re targeting a growing industry or declining industry. For example, if you’re looking to sell VCRs in 2020, it’s unlikely that your business will succeed.

Starting your market analysis with an industry outlook offers a preliminary view of the market and what to expect in your market analysis. When writing this section, you'll want to include:

Market size

Are you chasing big markets or are you targeting very niche markets? If you’re targeting a niche market, are there enough customers to support your business and buy your product?

Product life cycle

If you develop a product, what will its life cycle look like? Lenders want an overview of how your product will come into fruition after it’s developed and launched. In this section, you can discuss your product’s:

Research and development

Projected growth

How do you see your company performing over time? Calculating your year-over-year growth will help you and lenders see how your business has grown thus far. Calculating your projected growth shows how your business will fare in future projected market conditions.

Step 3: Determine your target market

This section of your market analysis is dedicated to your potential customer. Who is your ideal target customer? How can you cater your product to serve them specifically?

Don’t make the mistake of wanting to sell your product to everybody. Your target customer should be specific. For example, if you’re selling mittens, you wouldn’t want to market to warmer climates like Hawaii. You should target customers who live in colder regions. The more nuanced your target market is, the more information you’ll have to inform your business and marketing strategy.

With that in mind, your target market section should include the following points:


This is where you leave nothing to mystery about your ideal customer. You want to know every aspect of your customer so you can best serve them. Dedicate time to researching the following demographics:

Income level

Create a customer persona

Creating a customer persona can help you better understand your customer. It can be easier to market to a person than data on paper. You can give this persona a name, background, and job. Mold this persona into your target customer.

What are your customer’s pain points? How do these pain points influence how they buy products? What matters most to them? Why do they choose one brand over another?

Research and supporting material

Information without data are just claims. To add credibility to your market analysis, you need to include data. Some methods for collecting data include:

Target group surveys

Focus groups

Reading reviews

Feedback surveys

You can also consult resources online. For example, the U.S. Census Bureau can help you find demographics in calculating your market share. The U.S. Department of Commerce and the U.S. Small Business Administration also offer general data that can help you research your target industry.

Step 4: Calculate market value

You can use either top-down analysis or bottom-up analysis to calculate an estimate of your market value.

A top-down analysis tends to be the easier option of the two. It requires for you to calculate the entire market and then estimate how much of a share you expect your business to get. For example, let’s assume your target market consists of 100,000 people. If you’re optimistic and manage to get 1% of that market, you can expect to make 1,000 sales.

A bottom-up analysis is more data-driven and requires more research. You calculate the individual factors of your business and then estimate how high you can scale them to arrive at a projected market share. Some factors to consider when doing a bottom-up analysis include:

Where products are sold

Who your competition is

The price per unit

How many consumers you expect to reach

The average amount a customer would buy over time

While a bottom-up analysis requires more data than a top-down analysis, you can usually arrive at a more accurate calculation.

Step 5: Get to know your competition

Before you start a business, you need to research the level of competition within your market. Are there certain companies getting the lion’s share of the market? How can you position yourself to stand out from the competition?

There are two types of competitors that you should be aware of: direct competitors and indirect competitors.

Direct competitors are other businesses who sell the same product as you. If you and the company across town both sell apples, you are direct competitors.

An indirect competitor sells a different but similar product to yours. If that company across town sells oranges instead, they are an indirect competitor. Apples and oranges are different but they still target a similar market: people who eat fruits.

Also, here are some questions you want to answer when writing this section of your market analysis:

What are your competitor’s strengths?

What are your competitor’s weaknesses?

How can you cover your competitor’s weaknesses in your own business?

How can you solve the same problems better or differently than your competitors?

How can you leverage technology to better serve your customers?

How big of a threat are your competitors if you open your business?

Step 6: Identify your barriers

Writing a market analysis can help you identify some glaring barriers to starting your business. Researching these barriers will help you avoid any costly legal or business mistakes down the line. Some entry barriers to address in your marketing analysis include:

Technology: How rapid is technology advancing and can it render your product obsolete within the next five years?

Branding: You need to establish your brand identity to stand out in a saturated market.

Cost of entry: Startup costs, like renting a space and hiring employees, are expensive. Also, specialty equipment often comes with hefty price tags. (Consider researching equipment financing to help finance these purchases.)

Location: You need to secure a prime location if you’re opening a physical store.

Competition: A market with fierce competition can be a steep uphill battle (like attempting to go toe-to-toe with Apple or Amazon).

Step 7: Know the regulations

When starting a business, it’s your responsibility to research governmental and state business regulations within your market. Some regulations to keep in mind include (but aren’t limited to):

Employment and labor laws


Environmental regulations

If you’re a newer entrepreneur and this is your first business, this part can be daunting so you might want to consult with a business attorney. A legal professional will help you identify the legal requirements specific to your business. You can also check online legal help sites like LegalZoom or Rocket Lawyer.

Tips when writing your market analysis

We wouldn’t be surprised if you feel overwhelmed by the sheer volume of information needed in a market analysis. Keep in mind, though, this research is key to launching a successful business. You don’t want to cut corners, but here are a few tips to help you out when writing your market analysis:

Use visual aids

Nobody likes 30 pages of nothing but text. Using visual aids can break up those text blocks, making your market analysis more visually appealing. When discussing statistics and metrics, charts and graphs will help you better communicate your data.

Include a summary

If you’ve ever read an article from an academic journal, you’ll notice that writers include an abstract that offers the reader a preview.

Use this same tactic when writing your market analysis. It will prime the reader of your market highlights before they dive into the hard data.

Get to the point

It’s better to keep your market analysis concise than to stuff it with fluff and repetition. You’ll want to present your data, analyze it, and then tie it back into how your business can thrive within your target market.

Revisit your market analysis regularly

Markets are always changing and it's important that your business changes with your target market. Revisiting your market analysis ensures that your business operations align with changing market conditions. The best businesses are the ones that can adapt.

Why should you write a market analysis?

Your market analysis helps you look at factors within your market to determine if it’s a good fit for your business model. A market analysis will help you:

1. Learn how to analyze the market need

Markets are always shifting and it’s a good idea to identify current and projected market conditions. These trends will help you understand the size of your market and whether there are paying customers waiting for you. Doing a market analysis helps you confirm that your target market is a lucrative market.

2. Learn about your customers

The best way to serve your customer is to understand them. A market analysis will examine your customer’s buying habits, pain points, and desires. This information will aid you in developing a business that addresses those points.

3. Get approved for a business loan

Starting a business, especially if it’s your first one, requires startup funding. A good first step is to apply for a business loan with your bank or other financial institution.

A thorough market analysis shows that you’re professional, prepared, and worth the investment from lenders. This preparation inspires confidence within the lender that you can build a business and repay the loan.

4. Beat the competition

Your research will offer valuable insight and certain advantages that the competition might not have. For example, thoroughly understanding your customer’s pain points and desires will help you develop a superior product or service than your competitors. If your business is already up and running, an updated market analysis can upgrade your marketing strategy or help you launch a new product.

Final thoughts

There is a saying that the first step to cutting down a tree is to sharpen an axe. In other words, preparation is the key to success. In business, preparation increases the chances that your business will succeed, even in a competitive market.

The market analysis section of your business plan separates the entrepreneurs who have done their homework from those who haven’t. Now that you’ve learned how to write a market analysis, it’s time for you to sharpen your axe and grow a successful business. And keep in mind, if you need help crafting your business plan, you can always turn to business plan software or a free template to help you stay organized.

This article originally appeared on JustBusiness, a subsidiary of NerdWallet.

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Choosing the best business location through a systematic location analysis.

Office building, production plant or bake shop – choosing the right location for your start-up or established business is of incredible economic importance. But there are many other factors that must also be considered. You can be on the safe side with the help of a location analysis: Find the ideal location for any business by evaluating specially selected location factors. We are here to introduce you to the location analysis process and show you which location factors you must pay close attention to. Take advantage of our location analysis service which also includes an evaluation and location recommendation.


There are some new businesses whose success is not hugely impacted by location. But then again there are others that have to close their doors due to a poor location choice. There is a reason why the address of the location and an explanation of the location choice are considered mandatory information when creating a business plan. But as a founder, how can you tell if the location choice is of special importance to your business and when does it make sense to conduct a location analysis? The type of business you are looking to start determines if the location is a relevant factor to your businesses’ success. If it is, it would make sense to conduct a thorough location analysis. Is your venture a sales center, such as a restaurant, a hairdresser or a retail store? In that case the number of walk-in customers may be of significant importance to you. That means the location can make or break your business, so an analysis is strongly recommended. Should you, however, plan to open an office for example, other factors come into play. For example, the availability of high-speed internet or additional services and amenities that you will need to have access to, such as a receptionist, meeting rooms or phone service may outweigh the location question because it is not as much of a priority in this case. Whether you are looking to open a new sales center, an office or a production plant, keep in mind that there are conditions, or so-called location factors, that are crucial to the success of your business. These factors vary greatly based on the nature of your business. Location analysis is widely considered the ideal tool to find the most promising location.


We recommend that all new business founders analyze the corresponding market prior to conducting a location analysis. There are two essential factors that they must pay close attention to when analyzing a market: Identifying the target audience and the competition. Analyzing your target audience means asking about your main customer’s traits and characteristics. Who is the target audience? How old is my average client? What income does he or she have? Where do my customers live? If you can answer these questions, then you have a good idea of what your target audience is all about. Gathering this basic information really helps with asking this next round of questions: at which locations can my target audience be reached particularly well? Where does my target group like to go shopping? Is a shopping mall or shopping center a good fit for my business? Or does it make more sense to choose a location near a train station? Based on the results of the location analysis we provide you with a good overview on which locations provide the best exposure to your specific target customers. Evaluating the competition for each potential location is crucial because every location offers limited sales potential. The stronger the competition, the more the sales are divided between the different competitors. Therefore it is strongly recommended to conduct a competition analysis and eliminate all locations from your list with a high number of competitors nearby.


The retail industry is without a doubt the most dependent on a good location. The following location factors are crucially important for retail businesses such as bakeries, butchers, grocery stores, clothing stores, shoe stores and electronics stores:


The bigger a community or a city, the bigger its impact area. A bakery is not reliant on a large impact area, however, to an electronics store the impact area is of great importance. The impact area is a crucial location factor in any location analysis because it gives you an idea about the approximate number of customers in the area.


Spending power is a term that describes the average income of customers in the area. It is significantly higher in some areas than in others. This is also reflected in the prices.


Many retail businesses count on walk-in customers who are making impulse purchases. They are typically not part of their regular customer base. A good method to compare walk-in customers of two separate locations is to count and compare them on the same afternoon.


Essential retail location factors are good public transportation accessibility and parking availability. You can research online, contact the transit authorities or check out the situation on-site.


If the number of competitors in the immediate neighborhood is high, then the only way to stand out is a special unique selling point (USP). Too much competition often ends in relentless price wars and declining sales. An obligatory competitive analysis should therefore be conducted


A location may become more attractive to customers when there are other retail stores nearby that compliment your business. When choosing a location make sure that there are other retailers in the close proximity. Some competition may even add to the appeal of the location and have a positive impact on sales.

The rent amount for a retail location is driven by how attractive a location might be. If you are expecting many customers and high sales at your location, the rent amount may be higher than it would be for other locations with less sales potential. The decision to choose a high-end A-location or a B-location depends on the business owner’s financial situation.

Besides spending power, impact location and competition there are some additional location factors that a location analysis for a manufacturing businesses must look at:


Manufacturing businesses usually produce some type of goods. In order to make these, raw materials or components from external suppliers are required. It is necessary to check whether all required suppliers are located near the selected location. In addition, the goods often have to be stored, which is another important factor for location analysis (large warehouse).


An equally important factor in location analysis is the average level of purchase prices of raw materials and the amount of transport costs up to the location.


Production companies often get large quantities of raw materials delivered. For this purpose it is important that the traffic routes from the supplier to the warehouse can be accessed even by large trucks so that the location is easily and quickly reachable at all times.


The direct proximity to the customer can be a deciding factor for production plants. This is something that should be considered during a location analysis.


Some manufacturing businesses produce a lot of hazardous waste, a lot of noise or harmful fumes. Therefore not every location allows every type of manufacturing!


Depending on the number of location factors and location choices the evaluation of a location can be a process that costs a lot of effort. However, despite of the fact that it is very time-consuming: a location analysis must be handled very thoroughly, because incorrect evaluation results may lead to choosing the wrong location. – which has the potential ability to doom a business before it has even really opened its doors. Therefore it is of crucial importance for the future success of your business to be mindful when selecting the relevant location factors and evaluate accurate and valuable data only.

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Watch CBS News

Jury in Trump trial gets inside look into payments to Michael Cohen

  • https://www.cbsnews.com/live-updates/trump-trial-week-4-witnesses-testimony/ link copied

By Graham Kates , Taurean Small

Updated on: May 6, 2024 / 7:55 PM EDT / CBS News

Jurors in former President Donald Trump's criminal trial in New York heard testimony Monday about how the business records at the center of the case were crafted, with attorneys questioning two Trump Organization employees about their involvement in payments to Michael Cohen.

Trump is charged with 34 counts of falsification of business records and has pleaded not guilty. Each of those counts corresponds to a record that stemmed from a series of monthly payments to Cohen in 2017.

Prosecutors say the funds — $35,000 a month — were meant to reimburse Cohen for the $130,000 he paid adult film star Stormy Daniels before the 2016 election, plus a bonus and enough money to cover taxes. In exchange, Daniels agreed to remain quiet about an alleged sexual encounter with Trump from years earlier, which he denies. 

Two witnesses involved in the payments to Cohen told jurors on Monday about how they were handled internally. Jeffrey McConney, the longtime controller for the Trump Organization, recalled how the chief financial officer of the company directed him to pay Cohen in monthly installments, beginning in February 2017. 

At first, the checks were issued from a trust that was set up to manage Trump's assets while he was in office. They eventually came from Trump's personal account, a change that meant his signature was required.

Deborah Tarasoff, an accountant at the Trump Organization, told jurors about how she handled invoices from Cohen and got the checks signed. "We would send them to the White House for him to sign," Tarasoff said, referring to Trump. The payments were documented in ledger entries.

Earlier in the day, Judge Juan Merchan held Trump in contempt of court for violating his gag order in the case for the 10th time. Merchan fined Trump $1,000 and warned that he could face jail time for future infractions.

Here's how the day in court unfolded, as it happened:

Judge finds Trump in contempt for 10th time, warns of jail for more gag order violations

Judge Juan Merchan addresses the court during former President Donald Trump's criminal trial in New York on Monday, May 6, 2024.

Addressing the court, Judge Juan Merchan said he was finding Trump in contempt of court for the 10th time, and imposing another $1,000 fine, for violating the gag order limiting what Trump can say about those involved in the case. The judge warned that the penalty would be harsher if Trump continues to violate the order.

"It appears that the $1,000 fines are not serving as a deterrent, therefore, going forward, this court will have to consider a jail sanction if it is recommended," Merchan said.

In his  written order , Merchan said Trump violated the order in an interview he gave on April 22. "That jury was picked so fast — 95% Democrats. The area's mostly all Democrat," Trump said on Real America's Voice. "It's a very unfair situation, that I can tell you."

Trump, Merchan wrote, "not only called into question the integrity, and therefore the legitimacy of these proceedings, but again raised the specter of fear for the safety of the jurors and of their loved ones."

Merchan said three other instances raised by prosecutors, including two about Cohen, didn't violate the order.

"Mr. Trump, the last thing I want to do is put you in jail. You are a former president of the United States and possibly the next one as well," Merchan said on the bench, acknowledging that "to take that step would be disruptive to the proceedings." 

He said he worries about court officers and Secret Service agents tasked with protecting the former president.

"I worry about them, and about what would go into executing such a sanction," Merchan said. "The magnitude of such a decision is not lost on me."

"At the end of the day I have a job to do, and part of that job is protecting the dignity of" the proceedings and the criminal justice system, Merchan said, adding that the gag order violations "constitute a direct attack on the rule of law. I cannot allow that to continue."

  • https://www.cbsnews.com/live-updates/trump-trial-week-4-witnesses-testimony/#post-update-022c0d4e link copied

Former Trump Organization controller Jeffrey McConney called to the stand

A man who for decades served as one of the Trump Organization's top executives was called to testify Monday.

Jeffrey McConney, the company's retired controller, is no stranger to the stand. He testified at the Trump Organization's 2022 criminal trial, where the company was found guilty of 17 felony counts related to tax fraud. He was both a defendant and a witness called by New York Attorney General Letitia James in the company's civil fraud trial, in which Trump and others were found liable for hundreds of millions of dollars in ill-gotten gains.

McConney is expected to testify about the mechanics of payments and financial decisions at the company. Prosecutors have indicated he instructed an employee to log payments to Cohen as payments for ongoing legal services, as opposed to reimbursements for Cohen's wire to Daniels.

  • https://www.cbsnews.com/live-updates/trump-trial-week-4-witnesses-testimony/#post-update-363e7b0d link copied

Trump in court with a larger-than-normal entourage

An unusually large group of aides and lawyers is accompanying Trump in court today.  

Eric Trump is here for the second time since proceedings began. He's sitting next to Alina Habba, who previously represented the first witness of the day, Jeffrey McConney, in the civil fraud matter. She has not typically attended this trial.

Alan Garten, the Trump Organization's chief legal officer, is also here.

Trump aides Boris Epshteyn and Jason Miller are in court, as well. That's not unusual.

One person not in attendance: Manhattan District Attorney Alvin Bragg, who often forgoes attendance at these proceedings while doing the work of running one of the country's largest prosecutor's offices.

  • https://www.cbsnews.com/live-updates/trump-trial-week-4-witnesses-testimony/#post-update-451679e8 link copied

"Wire monthly from DJT": McConney describes instructions to reimburse Cohen

Prosecutor Matthew Colangelo questions Jeffrey McConney during former President Donald Trump's criminal trial on Monday, May 6, 2024.

As much as this trial is about salacious headlines and tabloid drama, it's also about accounting.

McConney explained how Cohen's $130,000 wire to Daniels' attorney in October 2016 led to a series of 12 monthly payments to Cohen of $35,000, for a total of $420,000.

McConney recounted a conversation with former Trump Organization chief financial officer Allen Weisselberg in January 2017, around the time that Trump assumed the presidency.

McConney said Weisselberg walked in with a notepad and said he needed to discuss payments to be made to Cohen.

"He kind of threw the pad at me and said, 'Take this down,'" McConney said, adding that he was also given a copy of a Cohen bank statement showing his $130,000 wire to Daniels' lawyer. Jurors were shown McConney's notes from that day, which appeared beneath "Trump" letterhead.

The notes showed a series of scrawled math, with a base pay of $180,000 — for the Daniels wire, plus $50,000 he had paid to a technology services firm — doubled to $360,000.

McConney said the doubling was a practice called "grossing up," in which the company increased certain payments to executives to offset a potential 50% tax rate.

Added to the $360,000 was a $60,000 bonus, which McConney mistakenly listed as $50,000 before correcting the total. McConney said Cohen had complained about having not received a large enough bonus at the end of 2016, and this was meant to remedy that.

The notes included calculations, mirrored by those written by Weisselberg on Cohen's statements : $420,000 divided by 12 equals monthly payments of $35,000.

Handwritten notes from Jeffrey McConney showing the math behind payments to Michael Cohen, as shown at former President Donald Trump's trial in New York on Monday, May 6, 2024.

Finally, near the bottom, McConney wrote a note he said meant that the payments were supposed to come from Trump's personal bank account: "Wire monthly from DJT."

Despite that instruction, the first few checks were sent from a trust set up to hold Trump's assets while he was in office. Its trustees were Weisselberg and Trump's two adult sons.

But in late March of that year, they made the decision to have payments going forward come straight from Trump's personal account. That meant the only person who could sign for them was the president of the United States, McConney said.

"At some point we had to start getting the checks to the White House for President Trump to sign," McConney said. "It was a whole new process for us."

  • https://www.cbsnews.com/live-updates/trump-trial-week-4-witnesses-testimony/#post-update-4c0eede2 link copied

Prosecution concludes direct examination of McConney

Prosecutor Matthew Colangelo finished his direct examination of McConney by going through Trump's 2018 Office of Government Ethics filing. 

It includes a note that Trump paid Cohen in 2017, for services rendered in 2016. The form listed the amount as between $100,000 and $250,000, far below the $420,000 Cohen received in 2017.

  • https://www.cbsnews.com/live-updates/trump-trial-week-4-witnesses-testimony/#post-update-38d2aa6c link copied

Trump attorney argues payments to Cohen were for legal services

On cross-examination, Trump attorney Emil Bove portrayed the documentation of payments to Cohen as for genuine ongoing legal services — as opposed to reimbursements for his payment to Stormy Daniels.

He noted that Allen Weisselberg, the Trump Organization CFO, never specifically said what the payments were for, or what he meant when he told McConney to "gross up" the payment.

The invoices and ledger entries reflect that the payments were made under a "retainer agreement." Prosecutors have said no such agreement existed.

"Retainer agreements can be verbal, right?" Bove asked. McConney agreed.

Prosecutor Matthew Colanegelo asked whether, after leaving the Trump Organization, McConney learned "that there were matters Mr. Weisselberg kept you in the dark about."

"Yes," McConney said.

  • https://www.cbsnews.com/live-updates/trump-trial-week-4-witnesses-testimony/#post-update-0d0677a7 link copied

Prosecutors call Deborah Tarasoff, Trump Organization employee who prepared checks for Cohen

Prosecutor Christopher Conroy questions Deborah Tarasoff during the trial of former President Donald Trump on Monday, May 6, 2024.

After a break for lunch, prosecutors introduced their next witness: Deborah Tarasoff, an accounts payable supervisor at the Trump Organization.

Emails show McConney forwarded Cohen's first invoice to Tarasoff in February 2017 and instructed her: "Please pay from the Trust. Post to legal expenses. Put 'retainer for the months of January and February 2017' in the description."

Prosecutors have said McConney did this with all of Cohen's invoices, and Tarasoff recorded each as a legal expense. She then prepared the checks that were used to pay Cohen.

  • https://www.cbsnews.com/live-updates/trump-trial-week-4-witnesses-testimony/#post-update-d92c50b2 link copied

Jury shown checks to Cohen signed by Trump and his sons

Tarasoff, who said she began working for the Trump Organization in 2000, described how invoices are handled at the company and her role in the process.

"I get approved bills. I enter them into the system, and I cut the checks. And mail them out," she said, noting that she does not have decision-making authority over what invoices get approved and generally follows others' instructions. 

Tarasoff said that various Trump Organization executives first approve invoices, depending on the amount. She said that beginning in 2015, Allen Weisselberg, the CFO, could only sign off on invoices below $10,000. If the invoice was approved, Tarasoff would then cut the check, along with a backup copy, and bring it to the appropriate executive for their signature. 

Only Trump could sign checks drawing upon his personal account. She said that is still the case today. Tarasoff also said Trump would sometimes decline to sign, sending the check back to her with "Void" written in black Sharpie along the back.

Beginning in February 2017, Cohen sent invoices seeking his $35,000 monthly payments. Cohen's first two checks, representing three monthly payments, came from the account for Trump's trust, which did not require his signature. The first was signed by Eric Trump and Allen Weisselberg, both of whom were trustees. Weisselberg and Donald Trump Jr., also a trustee, signed the second check.

The remaining nine monthly payments came from Trump's personal account. Those checks required Trump's signature.

"We would send them to the White House for him to sign," Tarasoff said, adding they were shipped via FedEx. 

The jury was shown checks to Cohen signed by Trump while he was president, as well as the checks signed by his sons on behalf of Trump's trust. Trump's signature was written in his trademark Sharpie.

  • https://www.cbsnews.com/live-updates/trump-trial-week-4-witnesses-testimony/#post-update-5acdf25c link copied

Graham Kates is an investigative reporter covering criminal justice, privacy issues and information security for CBS News Digital. Contact Graham at [email protected] or [email protected]


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