Getting Started with a Small Business
Choosing a location and acquiring equipment
Whether you are starting or moving a small business, the choice of location needs to be carefully researched. The impacts of a business's location are far-reaching and sometimes unexpected. Finding the right one can save you money on taxes or attract the types of clients and employees that are ideal for your company. Consider the following points when selecting your business location to ensure that you make the best choice for your business.
Evaluate Your Needs
The United States Small Business A
dministration (SBA) recommends that you determine the needs of your business in the following areas:
Image: Does the location reflect the reputation that you want to cultivate for your business?
Competition: Do businesses in the surrounding area compete with your business, or are they complementary? For example, opening a bakery next to a cheese shop can help increase your customer base.
Local labor market: Do the locals match your potential employee criteria, and if not, will the types of employees you want have a favorable commute?
Growth potential: Giving your business space to grow into ensures that you won't require a difficult move or renovation in order to take advantage of growth opportunities.
Supplier proximity: Examine how easily suppliers would be able to find your location and make deliveries.
Safety: Make sure your employees and clients feel safe, particularly during evening and weekend hours.
Zoning regulations: Contact your local planning agency to ensure that your business fits into the zoning regulations of your desired area.
Evaluate Your Finances
Once you have a clear picture of your needs and logistics, considering the financial impacts of each potential location can help save your business money. The SBA cautions business owners to keep an eye out for the following things that can either harm or bolster your finances.
Hidden costs: Have a clear picture of what a space needs for your business to run efficiently from the get-go, so hidden costs such as upgrading bathrooms or IT infrastructure don't push the upper limits of your budget.
Minimum wage: Check the minimum wage for each state at http://www.dol.gov/whd/minwage/america.htm. Note that many are above the federal minimum.
Taxes: The SBA suggests that you seek out favorable income, property and sales taxes, especially if potential locations straddle state lines.
Government economic incentives: The government has set up incentives for small businesses, which may depend on location.
According to Erica Swallow, Forbes contributor, there are a few things that make a location feel business friendly. The proximity to programs that offer networking and other types of small-business training can have a huge impact on the business friendliness of an area. Considering what type of training you would want for your business ahead of time will help you determine if it exists conveniently in your area. The SBA offers some of this training, so its website is a good place to start looking (SBA.gov). Swallow also suggests that you determine how easy it will be to raise money in a given locale, including the proximity to relatives or friends who wish to invest and notes, "If ... loans are a need, though, an entrepreneur must analyze the local lending industry, including whether banks are issuing loans and what the interest rates are like in that area." The SBA also offers demographic data, found at http://www.sba.gov/content/demographics, to help you determine the business-friendliness of an area.
Determine How to Acquire Equipment
Once a location has been chosen, attention shifts toward supplying the space in a cost-efficient manner. Comparing online and local deals for equipment is the most obvious way to save money, but it is important to consider all avenues, including government surplus and leasing. The SBA has put together a directory of the different ways of purchasing government surplus, at http://www.sba.gov/content/buying-government-surplus. Many surplus items are sold through online auctions, making it easier than ever to take advantage of these discounts. Leasing offers the advantages of saving the time and hassle of obtaining a loan to cover high purchase costs, letting you test products before purchasing, and can potentially confer tax and maintenance savings.
You may also be interested in...