Home Business Ideas Factors To Consider when Choosing a Business Location in Nigeria

Factors To Consider when Choosing a Business Location in Nigeria


There are factors to consider when choosing a business location? But when considering these factors, questions like: How can one conduct a business location analysis? What are the importance of location to a successful business, come up to the mind.


Ironically, Choosing a small business location is an issue most entrepreneurs carryout without blinking an eye. Many entrepreneurs are believed to overlook this trend believing that in order to reduce expenditure, one can willingly settle for a cheap location. Others believe that location doesn’t matter provided the product is right.

However, one most understand that getting a good location is very essential to the success of your business but this can prove quite challenging because not all entrepreneurs has a good business site.

If trying to trend into the process of starting a business and getting a good location is proving quite a challenge for you, below are 10 useful factors you must concur to before choosing a business location.


Factors to Consider before Choosing a Business Location

1. Availability of raw materials

Entrepreneurs who wishes to run a manufacturing or production business, proximity or availability of raw materials is a factor to be considered when choosing a business location. This is a factor that can kill the profit of any business, as lack of transportation to where those raw materials are being acquired and bad road to where those materials are been bought could dent the growth of the business

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2. Proximity to market

This is another key factor to consider when choosing a business location for business because it stands as a strong link between your customers and the business location. At the end of the day, your customers has to be provided with the product. Remember that for your business to succeed, you must make it easy for customers to find your product.

3. Availability of basic infrastructure

When choosing a small business location, basic infrastructure can affect your choice of small business location if the are not available at the area where your business is suited. Amenities and infrastructure such as water supply, power supply, good road, communication network and security are things every business should not lack when locating your business.

4. Economic principles

The economic principles or system of a particular region may also affect your decision and choice of business location. Some economy favor capitalists and others are driven by socialism; where the government controls all businesses like states like Lagos, Rivers, Bayelsa etc. Other sub-factors to consider are government’s policy, fiscal and monetary policy, exchange rates, taxes, levies and duties.

5. Demographics

Demographics as a factor can have a big influence on your choice of business location. If your type of product or service your business offers and the gender of the customers will play a key role in your choice of small business location. For example :

If a entrepreneur is into the business of sanitary pad. That means your demographics should be made up of women or females as the case may be, so your best bet of location should be within an area covered with a large number of females in order to boost the demand rate of the product.

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6. Psycho-graphics

The mindset of your customers or the area of a particular region is also a factor that should not be over looked when choosing a location for your small business. For example; if you site your business in a region where tribalism exists, then there will be an issue because the comfort of the business will be dented as those occupying that area will tend to make it uncomfortable for your business to thrive.

7. Industrial zone/areas

Some entrepreneurs may decide to site their business in industrial areas due to the fact that infrastructures and amenities are already on ground. Industrial areas are areas curved out specifically for commercial purposes especially manufacturing firms.

These areas are sometimes given special attention such as good road network, constant power supply, etc. In some certain regions, heavy duty manufacturers are forced by the government to site their companies in these industrial areas.Some entrepreneurs believe that whenever they are in an industrial zone, competition will come as many customers will have more freedom to choose from different products.

8. Export processing

Locating your business in an export processing freedom may be a smart choice for you especially if are an exporter. Locating your business in such regions means a reduction in transportation cost, faster inspection and clearance of your products by custom officials, it is also worthy to know that this export zone should be crime free, especially from hoodlums and 419.

9. Free trade zones

International trade zones and trade fair centers are also good places to site your business locations because it is accessible and mostly attracts a wide range of publicity from different country.

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10. Distributive channel(final chain)

This factor comes last in the list because, this channel of distribution tends to be the chain of every successful business of any kind.Then it’s wise to put your distributive channel into consideration when choosing a location for your small business.The products must be channel down to the final target, (the customers). The more you make it easier for your distributors to access your products, the better for your business.

Finally, when choosing a location for your small business, the following factors listed above can be a platform in decision making. Nowadays, most businesses die today because of their inability to make the right choices in choosing a business location for a small business because they overlook these factors.



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