Location plays a big role in how successful a business can be. A great spot makes it easy for customers to visit and ensures smooth access for suppliers, vendors, and employees.
On the flip side, a not-so-strategic location can lead to delays in deliveries, longer commutes for staff, and fewer customers showing up because it’s just hard to reach. All of this can slow down operations, eat into profits, and drive up costs.
That’s why it’s important for businesses to plan their location strategy carefully and pick the best spot to help the business grow in the long run.
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What is Location Strategy?
A location strategy is how a business decides where to set up its offices, branches, or workspaces. It involves looking at things such as costs, available land or buildings, and how easy it is for employees to get there.
Another important part is checking if there are enough potential workers in the area. If the business can’t find the right people locally, they’ll need to hire from outside, which can be a bit of a headache.
Recruiting from outside not only takes longer but also adds extra costs, such as moving expenses, housing, and allowances for those who relocate.
Why Location Strategy is Important
Location strategy is generally implemented by businesses when they plan to expand or consolidate.
When expanding, businesses use this approach to pick the perfect new location for growth. They focus on things like market potential, accessibility, and the availability of local resources to make sure the location supports their goals.
For consolidation, especially with remote work becoming more common, location strategy helps businesses decide which offices to keep. The goal is to cut back on physical spaces while still having one or two key hubs in strategic areas.
These hubs should be close to skilled talent, making it easier to attract and retain employees without the need for multiple costly office locations.
Key Factors to Consider When Choosing a Business Location
Now that we know what a location strategy is and why it’s important, let’s talk about the key factors to keep in mind when choosing the right spot for your business.
Geographic Distance
These days, many employees work remotely and can be anywhere, but having an office still matters as the hub for business operations. One thing you don’t want to overlook is choosing an office in the same time zone.
When everyone’s in the same time zone, it makes working together much easier. Teams can communicate and collaborate without worrying about time differences, making everything run more smoothly.
Access to Skilled Talent
Another important thing to think about when choosing a location is whether you can find the right people for the job. As mentioned earlier, having skilled talent nearby is a big deal.
If a business opens a new office, factory, or branch in an area but can’t find the workers it needs locally, it’ll have to hire from outside the area.
This can drive up costs because you’ll need to cover things like moving expenses, housing, and transportation for the new hires.
Availability of Amenities
When a business is thinking about expanding or moving to a new location, it’s important to look at what amenities are available in the area. This includes things like shopping centers, easy access to public transportation, housing options for employees, and places for entertainment and relaxation to help maintain a good work-life balance.
Having these amenities nearby not only makes daily life easier for employees but also boosts comfort and productivity. A location with all the right facilities helps employees meet their needs more easily, which can lead to higher satisfaction and better employee retention.
Create a Winning Location Strategy Using LOKASI Intelligence
In today’s competitive business world, doing thorough research before deciding on a location strategy is crucial, whether you’re opening a new branch or relocating a factory or office. Choosing the right spot can boost operational efficiency, productivity, and create long-term growth opportunities.
To help with this, businesses can use LOKASI Intelligence. LOKASI is a geospatial platform with location intelligence tech, offering a wide range of data, like demographics, foot traffic, socio-economic details, and points of interest.
With LOKASI Intelligence, businesses can get location recommendations for expansion or relocation and dive deeper into the analysis to find the best spot. This approach saves time, cuts costs, and reduces effort.
Want to learn more about how LOKASI Intelligence can help your business? Contact us at [email protected] or via WhatsApp at 087779077750.
FAQs
What is an example of a location strategy?
An example of an effective location strategy is when a business plans to open a new office in an area with easy access to important facilities. For instance, choosing a location close to public transportation, shopping centers, entertainment venues, and more.
How to Enhance Your Location Strategy?
Businesses can improve their location strategy by using location intelligence technology. This technology helps businesses analyze data more effectively and create location strategies that enhance operational efficiency and support long-term growth.
Why is location strategy important?
Location strategy is crucial because the right location can significantly impact the future success of a business. By choosing a strategic location, businesses can gain better access to opportunities like a larger market, easier accessibility, and the ability to attract talent and resources.