Choosing a new business location is rarely as simple as finding an available site in the right town.
A location may have strong footfall but the wrong customer profile. Another might offer attractive property costs but poor accessibility. And an area that appears underserved could turn out to have limited demand.
Whether you’re opening a new store, expanding a network or comparing potential sites, looking at several factors together can give you a much clearer picture of the opportunity and the risks involved.
Here are five important factors to consider.
1. Demographics and local demand
Understanding the people within a potential catchment is an important starting point. Population size alone doesn’t tell you whether there is sufficient demand for your business. Age, household composition, income, affluence, employment and consumer characteristics can all affect the suitability of an area.
The relevant factors will depend on the business. A premium retailer, healthcare provider and fast-food restaurant might all consider the same location, but each will be looking for very different characteristics within the surrounding population.
Mapping demographic and consumer data helps you compare catchments and identify areas that most closely match your target audience.
2. Competitor presence
The presence of competitors isn’t necessarily a reason to avoid an area. In some markets, a cluster of similar businesses can indicate strong existing demand. In others, additional competition could make it considerably harder for a new location to gain sufficient market share.
The important question is what competitor presence tells you about the opportunity.
Mapping competitor locations alongside population, customer and market data can reveal where competition is concentrated, where there may be gaps in provision and whether apparently attractive areas are already well served. For businesses with an existing network, the same analysis can also help assess whether a new location could affect the performance of nearby sites.
3. Commercial viability
A promising market still has to make commercial sense. Property costs, business rates, operating expenses and the size or type of premises available can vary considerably between locations. But cheaper doesn’t automatically mean better.
A more expensive site may offer access to a considerably stronger catchment, greater customer demand or better visibility. Equally, a seemingly attractive high-footfall location may not generate enough additional business to justify its cost. Comparing commercial considerations alongside measures of market potential provides a more realistic assessment of whether a location can support the business case.
4. Accessibility and movement
How easily customers, employees and suppliers can reach a location can have a significant effect on its performance. Depending on the business, this could mean proximity to major roads, public transport, parking, pedestrian routes or transport hubs. But accessibility isn’t simply about what appears on a map.
Understanding how people actually move through an area can reveal when locations are busiest, where visitors are travelling from and how movement patterns change throughout the day, week or year. Two sites a short distance apart can therefore offer very different opportunities.
Combining accessibility with footfall and movement data provides a much clearer picture of how a potential location fits into people’s everyday journeys.
5. Workforce availability
Customers aren’t the only people a business needs to consider when assessing a new location. For businesses requiring significant numbers of employees or particular skills, access to an appropriate workforce can be an important part of the decision.
Demographic, employment and travel data can help organisations understand the potential labour pool surrounding different locations and how easily employees could travel to a proposed site. This becomes particularly important when comparing locations for larger facilities, specialist operations or businesses that may struggle to recruit in certain areas.
Looking at the whole location
Each of these factors can tell you something useful. The real value comes from understanding how they interact. An area may contain exactly the right demographic profile but already be heavily served by competitors. Another may have strong customer potential but poor accessibility. A third might initially appear less attractive but offer a better balance of demand, competition and commercial viability. That’s why location decisions shouldn’t be based on a single dataset or measure.
Location Intelligence brings different sources of evidence together so potential locations can be compared consistently, helping businesses understand the opportunities, identify potential risks and build a stronger business case for investment.
Periscope® combines demographic, consumer, competitor, movement and location data to help businesses evaluate potential sites and make more informed decisions about where to grow.
See how Periscope® can help you compare locations and identify stronger opportunities for growth.
