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Choosing the Perfect Commercial Location
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May 7, 2023
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Location is often the number one factor in a business’s success or failure.

To avoid common mistakes small business owners make when choosing their location, complete a copy of this checklist for every location you’re considering.

Some of the factors to consider are:

1. Demographics

  • Use resources such as American FactFinder, The Census Bureau, the landlord of the location, and your local economic development department to find out if the area has enough target customers to support your business. Note the following:
    • Daytime population
    • Total population
    • Pedestrian traffic
    • Vehicle traffic

2. Co-Tenancy

  • Who are the anchor tenants? 
  • Who are the other tenants?
  • What are the pros and cons of the location’s tenant mix? 

3. Size & Shape of Location

  • What is the square footage of the location?
  • What is the shape of the space? 
  • Are there columns or other impediments inside the location?
  • Is the location:
    • In-line 
    • Freestanding building
    • Corner/end-cap location

4. Infrastructure

  • What year was the space built? What year was it most recently upgraded? 
  • Does it have adequate:
    • Heating, ventilation & cooling (HVAC)
    • Plumbing/Restroom facilities
    • Gas
    • Internet/WiFi
    • Electrical wiring
  • Does it meet current building codes? If not, what is needed to bring it up to code? 
  • Is it ADA compliant?
  • If not, what is needed to bring it into compliance?

5. Signage & Visibility

  • How visible is the space from within the center, for pedestrians, and for passing traffic?
  • Are there any restrictions on signage (size, color, illumination, etc.)? 

6. Parking

  • Who are your closest co-tenants? How might they affect parking?
  • Is there storefront parking (if needed)? How many spaces? Can spaces be dedicated to your store? 
  • Is parking free or paid?  If paid, what are parking rates? 
  • Is there easy access for deliveries (if needed)? 

7. Competition

  • How far away are your competitors, both inside and outside the shopping center? Go online and map out their locations within a 20-mile radius.

8. Cost

  • Is the landlord offering a triple net lease or a gross lease?
  • How often can the rent increase and how much?
  • What additional costs are you responsible for, and what is the average yearly cost for each?
    • Trash removal
    • Utilities
    • Janitorial
    • Common area maintenance
    • Security
    • Property insurance
    • Property taxes

Download the checklist to see all 12 factors you should consider when choosing your commercial location.

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Funded, in part, through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.

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