Think HBR

Why is location important to your business?

Steve Dick
Raine & Horne Commercial
Your real estate agent will tell you location location location but what really is location? The location decisions look like this;
Customers, staff and the need to be seen or not?
Some businesses do not want to be found they prefer to be in the back blocks. This is especially so in industrial areas where walk-in customers are more of a nuisance and sometimes a hazard.
Tunnel Vision - Even when a business is located on a main road the exposure generated can be limited by tunnel vision of the passing traffic and then there is the difficulty of access. People tend to see what is different when travelling the same road each day. No doubt you’ll start in your new premises with a bang.
New signage, new marketing and all of a sudden new enquiry - SUCCESS! However unless you are prepared to work the position you’ll quickly learn your presence on the main road will be lost as people become accustomed to your signage. A well known Hire Company used a politically incorrect mannequin on top a scissor lift. Every time they changed her clothes their hire rate for the week would spike before settling down until her next change.
Transport Costs - In an instance some years ago a well known snack Food Company was looking for a new premises and the perfect existing building couldn’t be found. After designing a building around their specific needs four options were provided.
They (the company) disappeared for a month while they investigated each location and the effect it had on their major business cost – their fleet of delivery trucks. In the end they chose the most expensive building because in their overall business model this position was more profitable to their bottom line despite costing 66% more in rent.
Staff Costs - In other instances, especially when skilled labour is in short supply, locating your business in a convenient position for staff can save a lot of stress and keep your business staffed. An example of this we had a major manufacturer who was looking to locate in the region. The choice came down to Rutherford or Tomago as the site for the plant to be built. Tomago won as it was deemed to be closer to the majority of staff. In this circumstance the mere act of driving past Tomago and travelling to Rutherford twice a day would potentially cost their staff 21.7 waking days a year away from their families (that’s 3 weeks in a car). It was also the equivalent of driving from Tomago to Perth back to Tomago and then to Adelaide. The decision to go to Tomago was based on their staff, the distribution of their product meant they could be anywhere in the state.
What zoning do you need?
Zonings ain’t zonings - let’s be clear on that and your usage will determine what type of zoning will be acceptable. Even then you may be an appropriate use within the Local Council Local Environmental Plan (LEP) however their Development Approval (DA) process will cause delays making life so difficult that you may be forced to abandon the move.
The stories are many and horrendous when companies decide to go down the DA path. It’s always our recommendation that you use a town planner to advise whether the location is suitable and to have them lodge the application on your behalf.
It is advisable for owners of property to obtain from Council each and every DA ever approved on the property as this will help future application argue whether a new DA needs to be lodged.
If the property is suitable you may need to lodge a change of use DA (let your planner do this) e.g. if it’s been approved for a warehouse and you need to manufacture this will require a change of use. Even these can take 4 months and some as long as 9 months. What landlord will wait that long for your business to start paying rent? Not many.
In the end work out what is most important to you when it comes to location.
1. Zoning is paramount – Get a planner to speak with council.
2. Do you run a fleet?
3. Do you welcome – Walk-ins?
4. Do you need exposure? If so you’ll need to work it.
5. Forget about your needs. How convenient is it for your staff?
For further information contact Steve Dick on 0425 302 771, email or visit
Steven Dick Steven Dick
has had a varied background with experiences in geotechnical engineering to hospitality and catering. He also represented at NBL Level Basketball. His expertise, experience and analytical skills have seen him involved with a number of companies at board level. He has also attained the highest level of recognition in the LJ Hooker and Raine & Horne Commercial Organisations.