How do I find the right location for my company?
August 24, 2022 | 40,00 EUR | answered by Martina Köhler
Dear tax advisor,
I am Emma Keck and I am about to start my own business. I have already created a business plan and taken all necessary steps to make my project a reality. However, I am now faced with the challenge of finding the right location for my company.
Currently, I am unsure whether I should establish my business in a big city, a suburb, or a rural area. I wonder which location is best suited to reach my target audience and operate successfully in the market. My concern is that choosing the wrong location could lead to lower revenues or that I may not gain enough customers.
I have already considered various locations, but I am unsure about the criteria I should consider when choosing a location. Additionally, I wonder how the location choice could affect my operating costs, accessibility for customers and suppliers, and tax burden.
Could you please help me find the right location for my company? What factors should I consider when choosing a location and what options are available to determine the optimal location? Thank you in advance for your assistance.
Best regards,
Emma Keck
Dear Emma Keck,
Thank you for your inquiry and your interest in my online consultation for entrepreneurs. Choosing the right location for your business is indeed an important decision that can significantly contribute to the success of your venture. I am pleased to see that you are already well-prepared and have created a business plan.
When selecting a location for your business, there are various factors that you should consider. First and foremost, you should think about which target group you want to reach and where this target group is predominantly located. Depending on the nature of your business, it may be wise to establish yourself near potential customers or in an area with high purchasing power.
Furthermore, you should analyze the competitive situation at the potential location. Is the competition already strong or is there still a market gap that you could exploit? Infrastructure, accessibility for customers and suppliers, as well as the availability of skilled workers, can also be important criteria in the location selection process.
In terms of operating costs, you should also weigh whether the rental or purchase prices for commercial properties at your business location are in proportion to your sales forecasts. Consider also any potential funding opportunities or tax benefits that certain locations may offer.
Regarding tax burden, the location of your business can have an impact on the amount of trade tax. In large cities or economically strong regions, trade tax is generally higher than in rural areas. In this case, it may be advisable to seek advice from a tax advisor to optimize the tax implications of the location choice.
To determine the optimal location for your business, I recommend conducting a location analysis. You can compare potential locations and evaluate them based on defined criteria. Additionally, you can have discussions with real estate agents, economic development agencies, or other entrepreneurs to learn more about the advantages and disadvantages of different locations.
Lastly, I would advise you to also listen to your intuition when choosing a location. The right location for your business should not only be rational but also emotionally fitting for you. I hope that my tips will help you in deciding on the optimal location for your business. If you have any further questions or require more detailed advice, I am happy to assist.
I wish you success in your entrepreneurial venture and am always available to support you with advice and assistance.
Best regards,
Martina Köhler
