Small Business Owner Network
South Africa




Location and infrastructure

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Location and infrastructure

Is location still vitally important?

Yes location of your business can be extremely important, especially if you are in the retail market and you rely on passing trade. Other factors that will be influenced by location include: Commuting to work; proximity to your largest customer - would this be an advantage; crime - replacing your computers every few months could be an issue; company image.

Many business textbooks will focus on the importance of the location of your enterprise and in fact MacDonald's success can largely be attributed to the location their outlets occupy. So if you have the money and it is a major factor in the success of your business, then spend that little extra time and money in finding the right position. However back down on earth in our real world, we'll find that most start ups in South Africa are between 1 and 3 persons large. Additionally many businesses are in the service industry such as IT.

Any money you spend on setting up a business will in most cases never be seen again if the business fails. To make matters worse, the enthusiastic new business owner will often sign 2-5 year rental leases for their premises and are still legally bound to pay this rent even if the business fails. As we have mentioned in other sections on this site, try as much as possible to keep your start up and overhead costs down for the first year. If you can work out of your garage, from home or obtain cheap short term premises - do so. If things work out, then by all means upgrade to better premises.

Location and infrastructure

Creating a more professional appearance.

Your business is up and running and hopefully has now reached profitability. Depending on the nature of your business it may now be a good time to consider moving out of the garage and into a small office or factory. It is at this stage where you can pick and choose your location with the correct experience behind you. Over the past few months or years you have learned where your main customers are, what delivery problems you have and what type of environment would provide you with the best source of passing trade whilst still being reasonably safe and convenient.

Another reason to move into new premises is for the image of your business. This is particularly important for your larger customers who would like to do business with secure established companies who won't just shut up shop as soon as a problem comes their way. By either buying or renting business premises, this indicates to them that you are in for the long term and won't leave them in the lurch.

Choose premises that will suit your requirements and your corporate image. Don't by "cheap" run down premises if you are trying to sell a high value item or service. First have a look in your chosen area yourself, but if you have no luck contact a property broker who specialises in the area. They often have properties on their books that are not always advertised to the general public.

Location and infrastructure

Finding extra space for expansions or premises to suit your needs.


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