Importance of Location in Business Success

By Published On: May 28th, 2024Categories: Managed Office4.6 min read
importance of location in business

The impact and importance of location on the success of a business

Table of Contents

  1. Introduction
  2. How Location Can Influence Your Business’ Success?
  3. Factors to Consider When Choosing a Location for Your Business
  4. Conclusion
  5. FAQs



When starting a business, it is very important to take certain factors under consideration to ensure that your business does not face a setback upon its establishment. Randomly starting a business without proper market research is something that most entrepreneurs do. This is often the main reason behind the failure of most start-ups in their early days.

When talking about the factors to consider when starting a business, the location of the business plays major importance in determining its potential success story in the future. This is because the location of a business decides a lot of factors, including the market demand, customer base, trade potential, and more which prove to be a key aspect for a business’s success.

In this article, we will know the importance of location on a business’s success, along with the important factors to consider when choosing the right location for your business.


How Location Can Influence Your Business’ Success?

The success of a business depends largely on the location where it is situated. This is due to the fact the different locations for a business offer different customer bases, laws, tax implications, and other similar factors.

Here are a few ways in which a business’s location influences its growth and overall success:

  • Competition: The location of a business determines the level of competition it is about to face. For example, setting up a new start-up at a location similar to a well-established competitor might result in a great setback for your business. On the contrary, choosing a business location that is easier to access than your competitor increases the chances of more customers getting attracted to your business.
  • Tax Implications: Different locations have different tax implications and laws. Therefore, business owners must always find a location with the least tax implication or maximum benefits to ensure that their business remains cost-effective.
  • Supply Chain Management: The warehouse location of a business is another major factor that influences its success rate. The warehouse location of a business directly influences the supply chain management of a business. A warehouse that is located at a good location will be responsible for reducing transportation costs, helping in better inventory management, and other similar factors to keep the business flourishing.
  • Customer Base: Small businesses often depend on the amount of footfall they receive. The location of such businesses also determines whether it will attract a large customer base or not. Opening a business in an ideal location with a smaller population might result in low or almost no footfall. On the contrary, similar businesses tend to flourish in societies and established markets.


Factors to Consider When Choosing a Location for Your Business

Since location contributes majorly to making a business successful, it should be chosen with utmost care. While selecting a business location, there are several factors that business owners must consider to ensure that their chosen location is best suited for their business.


Gaining a competitive edge in the market is what every business seeks. As a new start-up choosing a location near your competitor’s business might not be a good idea. Therefore, choosing a location with low or zero competitors around can be a good consideration. 

Customers and Community

Small businesses depend largely on the size of their customer base. Therefore, choosing a location that has the potential to attract customers or that should not be difficult to approach is what business owners should consider. 

Overall, the business should be easily accessible to local customers or should be situated at a location with a huge customer base already.

Growth Opportunities

Establishing a business in a saturated market can be both tough and unfavorable. Choosing a location that delivers a high growth potential in the future can be a great consideration for a business. This can include a developing society, flourishing commercial buildings, and other similar business locations.


To conclude, as a business owner, it is very important to ensure that your business is situated in the perfect location. A perfect location for a business not only ensures its success but also opens gates to potential expansion opportunities in the future.

Considering a perfect location for your business? Check out BHIVE which can be an ideal solution to set up your business at the perfect spot. With affordable rents and prime locations, your business is guaranteed to flourish with BHive.


  1. How does location decision impact a business?

The location of a business has high importance for a business. This is because the location of a business decides the trading potential of a business, its customer base, and its ability to reach a wider audience. All these factors ultimately decide whether a business will be successful or not.

  1. How can location decisions impact supply chain performance?

For a business, its warehouse location is largely responsible for impacting the supply chain performance. This is because a strategically planned location can help a business in various ways, including saving transportation costs, better inventory management, and ultimately customer satisfaction.

  1. What is a location advantage?

A location advantage refers to a perk that a business enjoys when it has been set up at the correct location. This includes cost effectiveness, a large customer base, exposure, and increased brand visibility to ensure its success.


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