A convenience store on one corner does a tremendous business, but the same type operation four blocks away goes out of business one year after opening.
Why?Many times it's location, according to Teresa Scott, president of the Downtown Chapter of the Utah Association of Certified Public Accountants, who said many business failures can be traced to the owners not learning enough vital information about the location.
In the first nine months of 1988, an estimated 45,000 businesses across the United States failed for the above reasons, said Scott. Manufacturers, for instance, should make certain the location they select has quick and easy access to transportation routes and necessary suppliers.
Retailers must be attentive to local traffic patterns, community trends and store visibility.
If you plan to purchase property for a small business, start by investigating the makeup of a few target communities. You can compare census figures to determine if a community is growing or shrinking and find out why. Census officials can also provide the area's average income, predominant occupations and median age.
Find out if nearby residents rent or own their homes and whether local property values have increased or decreased. Consider if the town has any building plans that might affect your business.
After deciding on the general area where you want your business, Scott said, the next step is selecting particular property. Make certain you obtain in-depth information about traffic patterns of the people who are possible regular customers.
Look into what was located there before. If several businesses have failed in that location, there may be some subtle reason for it, Scott said.
Once satisfied with the site, it's time to look into the building's physical condition. Is the facility large enough for future expansion? Does the property need major modification to satisfy your business needs? Examine the building as closely as you would a new home, including the age of the plumbing and wiring.
Also consider such convenience factors as parking space and proximity to major roads or public transportation.
When you're ready to lease or purchase some property, weigh all legal and financial ramifications. How high are the property taxes? Should you lease rather than purchase? Are there any special zoning regulations and are they likely to change in the future?
Will the regulations help or hinder your business? Are there any local ordinances which restrict the type of business that can exist in the building or limit the operating hours? A lawyer or certified public accountant may be able to help answer these questions, Scott said.