Location, location, location.
Finding success with a startup requires careful planning and hard work. One of the areas you can easily control is where you locate your business. Choosing the right location helps you in seeking out the absolute best employees in your area and in the number of resources available to you as a business owner. The right location can even provide networking opportunities with other tech biz owners.
Every day, 137,000 new businesses start, but a high percentage of those businesses fail. Unfortunately, information startups have the highest rate of failure at 63 percent. To have the best shot at falling in that percentage of tech startups that succeed, it's important to take advantage of every small action you can take to help ensure your success. When it comes to choosing the perfect spot for your startup, there are some specific things to consider.
1. Look for an Innovative City
Some cities make a commitment to innovation, such as adding fiber optic cables and utilizing smart city features. Such a city offers many advantages to a business with cutting edge technology needs. People expect tech companies to lead innovation. That's difficult to do if you can't get a fast enough Internet speed to conduct a live chat session with a potential client.
While your budget might not yet allow anything other than a garage office, you should invest in shared office space in a nearby city as soon as you can afford it. As your business expands, you'll need to make some tough decisions about where your headquarters go.
2. Go for the Right Demographics
Depending upon your business, you may serve a local population. You'll want to be located near people who are actually interested in what you're offering, even if you plan to expand into other areas in the future. If your business caters to post-secondary education institutions, for example, you'll want an area with a lot of universities. An in-depth study of a demographics map allows you to see who is moving into and out of an area, so try analyzing a radius around the potential location of your business.
3. Consider the Competition
Silicon Valley is well-known as an area filled with tech companies. Even though tech giants like Google and Facebook reside there, the San Francisco area may not be the best choice for your startup for a few reasons. First, time and public opinion have shown that it isn't actually the most innovative city you could choose. Second, you'll compete against huge tech giants for the best workers. A small startup simply can't offer the benefits, pay or amenities of Google.
You might not want to choose the top city in your area for technological advances either, because a lot of other tech companies will also choose this location. Instead, look for somewhere near your base that makes the top 100 list of most innovative cities. Each location has different benefits, so be sure to weigh them all.
4. Look at Nearby Schools
Your employees drive future innovation, so your ideal location should attract the smartest and most creative graduates in your area. Look at the nearby schools and what studies they specialize in. A tech school located near a city can equate to a lot of graduates with the knowledge you need. Since these graduates are entry-level employees without experience, you have a unique opportunity to snag up amazing and eager employees. As your company grows, it will be important to offer them the raises, recognition and benefits that will help keep them with you.
5. Consider Rental Costs
Spend time researching the real estate market in different areas. The cost of rental space in New York City is going to be far higher than in St. Louis, for example. While New York might offer some attractive perks, are those perks enough to offset the cost of real estate? Also, look at growth patterns in the area. Is the cost of rent rising steeply year after year, or does it remain fairly steady over time? Consider the lease lengths in the places you're looking at, and ask yourself if you can agree to be locked into the area for those lengths of time.
6. Look at Growth Potential
Obviously, your goal is business growth. If your tech company suddenly takes off and you need a larger space, is it even available? Will you have to build? If you do have to build, where will you build? Some larger cities are big on features but short on space, which also drives costs up. A local commercial real estate agent can help answer important questions once you narrow down your list of location choices.
7. Choose the Right Building
When it comes to the office building itself, there are many things you must consider. First, ask yourself if it's easy for employees and clients to access. Is there ample parking? Check out the IT infrastructure of the building. The last thing you want is a building without the proper wiring to support your networking system. Check to see if the structure is near any high-speed wiring for Internet or smart office features, and look inside the building at the number and location of electrical outlets as well.
8. Factor in Friends and Family
Even though a city nine states away might have the most amenities for the lowest cost, do you really want to relocate that far from your support system? Consider both personal and business matters when making a final decision. Perhaps space two towns over works nearly as well as the one nine states away, but also allows you to commute to the office without uprooting your life too much.
9. Weigh the Pros and Cons
Make a list of the pros and cons of each location, both professionally and personally. Keep a list of the things you simply must have for your location that you refuse to budge on. As you survey each potential building, think about whether you can add the features you need easily or if it will be simply impossible to meet your needs. Once you have a firm grasp of all the different aspects of a location, start narrowing down your choices to the top three. You'll find it is much easier to decide between three options than 30.
Picking a business location is not an easy decision, especially for tech companies that need a variety of specific features in order to function properly. However, with patience, persistence and plenty of research, you can and will find the right area and building to stamp your new brand name on.