You must also plan, in advance, many matters concerning the business which you propose to start or take over. Once you know what the business is going to do, you must decide how and where you will achieve the objectives, (if you decide to buy or take over an existing business as a ‘going concern’, such decisions may already have been taken for you). Such decisions may concern what types of goods you are going to sell, or make and sell (i.e. will they be ‘staple’ goods, which everybody needs to buy in order to live a normal, healthy life, such as bread, rice, eggs, clothing, furniture, etc., or will they be ‘luxury’ goods, which are not essentials but which add to the comfort of those who purchase them, such as radios, televisions sets, other electrical appliances, etc.). Are you going to sell expensive items, or more modestly priced items? The same applies to services provided by craftsmen and artisans; will a person concentrate on small jobs or try to obtain large contracts? Will ‘personal service’ be given or will employees do some or all of the work?
‘Where’ is another matter of importance.
Some small business can be operated from home, space permitting, such as those concerned with book-keeping, gardening, electrical contracting, and many more occupations. Some businesses may need rented premises, ranging from workshops to small offices, shops, restaurants, etc. In some cases business premises must be located in busy streets or other thoroughfares, often at ground level, as much, if not all, customers will come from passers-by, attracted by items displayed in windows.
Other businesses can be located in quieter areas and on upper storeys of buildings. Obviously, if you are hoping to sell expensive items, then your business should be located in an area frequented by those with sufficient money to afford to buy what is for sale; conversely, if more modestly priced items are being offered for sale, the business should be located in an area where there will be customers with modest incomes. If you are hoping to sell and/or service, say, office equipment, then the business needs to be located in or near an area where there are many office complexes.
The ‘where’ may also be dictated by the potential market for the goods or services to be sold, as already intimated in the last paragraph. There is no value in locating a small business in an area where there are few, if any, people in the vicinity who are potential customers for what is to be offered for sale. Location may also be affected by existing or potential competitive businesses, selling the same goods or services which you propose to sell or provide. You might well have to struggle hard to compete with, and even to survive against, already established competitive businesses. Where possible it is best to locate a new business in an area in which there is a good potential market (customers) for the goods or services you intend to sell, but which is not already adequately served.
All the above matters may have to be investigated – researched – before a decision is reached. Often a compromise will be necessary because, for example, the rents in the area in which you wish to locate your business may be too high for you to afford, or because suitable premises are simply not available at the time you want them.
Continued in the following post…