They say that the three most important considerations in business is location, location, location. If you’re starting a new business that operates primarily offline, location is still critical. But is it critical for online businesses, too? Yes, but in a different way. Online location is akin to having the right URL and the right keywords and the right text-based advertising (like Google AdWords).
So, in two slightly different ways, location is still an important part of doing business. A business plan has two purposes and will serve one or both: One purpose is to raise additional capital and the other purpose is to simply outline in detail how you can succeed in your business (- operating like a user’s manual). Essentially, you will want to answer two questions: “Why here?” and “How can I succeed here?” You will need both of these questions answered for both purposes.
Why here, for the bricks and mortar location, will be the physical address (or addresses) where your business will take place. For the online address, you will want to talk about your host and your website- whatever you didn’t talk about in the marketing plan (since there is some cross-over subject matter). When outlining “why here” you will want to talk about these things.
- The elements that attracted you to this location.
- The process you went through to identify this location as the location of choice; in other words, how you narrowed it down from the entire city to the specific location, or from the vast range of URLs to the specific URL you’re going to use.
- Demographic analysis of the people in the area. Be sure to focus in on the make-up of your target market. If you market to women aged 18- 35, you may want to talk about what the overall demographic makeup is in your area and (in greater detail) the demographics of the areas women who are aged 18 – 35.
- Traffic patterns (For example: Time of day – are there rush hours when you’ll be busier?)
- Refer to your marketing plan section where you might talk about how your signage will receive greater exposure at certain times or how your advertising appropriately targets your market.
- Competition in the area.
How can I succeed here?
This is the section that many will want to read, especially since many business plans do not include this. (Rather, they simply give the data, above, without taking this next step of analyzing the data for maximum success).
- Challenges you will overcome. For example, is it difficult to make a left turn across traffic to get to your store? Do people have to “feed the meter”? Those could substantially reduce your target market.
- What your competitors are doing and what you will do differently. (Of course, you probably already did quite a bit of this in the marketing plan section, but this has a slightly different focus and you may want to reference some of those ideas).
- Outline best case scenario and contingency plans, referencing your marketing plan against your demographics.
- Find competitors in the same area, or in an area of similar demographics, and identify what they’re doing to be successful.