1. Your Customers
Customer traffic must be considered and parking availability is important if the customers must come to you. If you are thinking about a particular location for a retail operation take a careful look at the stores around your prospective location. Do they seem prosperous and well kept. What economic level do they serve and does it match your product line.
2 .Business Neighbors
If your business will be a service make sure that the location is compatible with the activity in which you will be engaged. A dance studio over a beauty parlor doesn’t work. Twenty five kids learning a tap dance routine above 10 women getting their hair ready for a Saturday night on the town is not a situation geared for growth of the beauty parlor. Take time to analyze the location and your business neighbors carefully.
3. Tax Issues
Check tax rates, business registration costs, inspection and permit requirements if any construction alterations are needed. The government of a business location is extremely important. Sales tax rates in the location can be a large factor to overcome if an adjacent town or state has a lower or no sales tax. This is the case is more areas than you might expect.
4. Sales Tax Example
As an example of sales tax disadvantage, retailers on the Pennsylvania side of the border with Delaware can attest to this problem . Delaware has no sales tax and Pennsylvania has a significant tax rate. You can easily see that anywhere within 10 miles of that border in Pennsylvania is not a place to sell appliances, electronic devices or furniture that can be carted in the back of an SUV. Be alert to the fact that in some states Individual towns often are able to add to the state sales tax. Check to be sure that your location is not at a disadvantage compared to an adjacent town. The local business tax rates are easily found on line and should be factored into the decision making process.
If you are going to require employees in your start up effort, check to see if your potential site is in a town with a wage tax. This is an especially egregious anti business tax and is a clear indication of a town that really isn’t encouraging small business start ups. I at one time had an operation in a city with a wage tax. People with skills were reluctant come into the city to work for me and have 6% of their wages paid to the city simply to work within it’s borders.
Starting a business is exciting and takes hard work to succeed. Try to locate in an environment that works with your effort to help you reach the goals you are seeking.
You can get a handle on business taxes at the Tax Foundation site which has all kinds of charts and information to answer your questions.
The dance studio example is an actual situation that I witnessed drive a beauty parlor out of business.