How Your Business' Physical Location Could be Hurting the Bottom Line
In the age of everything being virtual or “in the cloud", many businesses have forgotten the importance of location. Debate, of course, exists as to whether location even still matters. For some industries, it might not be as important, i.e. information technology; while other business may survive or fold based on locality.
Why Is Location Important?
Every business has customers and vendors. Vendors need to have easy access to deliver goods or services. For example, a manufacturing business need parts delivered. If the business is located in an area that's hard to access – like a mountain dirt road – then it will either be impossible for the vendor to deliver the needed parts, or they may charge more for this service, costing the business money.
If a business has customers, there are logistics to consider. How close is the business to the “hub of commerce"? Data from the New Census Bureau showed that Americans are increasingly moving out of suburbs to cities, making cities once again the centers of business. This means that businesses need to be located near their customers, especially if the business is expecting a lot of foot traffic.
Businesses also need to consider if parking is available. Many customers will go somewhere else if it's too hard to find parking. Crime in the area also needs to be considered. Customers may frequent other neighborhoods because it's safer and/or more convenient.
Finally, having a business in a city center also gives the perception that the business is successful – that the business can afford a “good" location. In many instances, consumers make decisions strictly based on perception.
The Rent Problem
Just as consumers prefer these locations, so do other businesses. This not only means more competition, but it typically means higher rent. Many small businesses choose a location outside of these high-rent areas since they often can't afford to pay thousands of dollars per month. Yet, this farther out location can actually be hurting the bottom line since it means fewer sales and less potential of new customers finding the business.
Benefits of a Virtual Office
Many businesses can benefit from a virtual office space – even if it's just an address. As mentioned earlier, consumers typically believe that businesses that can make it in the “big city" are more successful than businesses in the suburbs. Virtual office spaces allow businesses to use the address as their own address and even receive mail and packages there.
Another benefit of virtual offices is actually having a place to have meetings with clients. These offices have the look and feel of real offices, including a reception area, meeting rooms with white boards and even break rooms. As clients walk through the space, they'll get the impression that the business is legit.
Virtual offices eliminate the need to buy office equipment, including desks, computers and other amenities. This keeps capital costs down, and staff can take advantage of working remotely.
The major value of virtual office spaces is that businesses get all the benefits of having a “physical" address in a good location at a fraction of the cost of actually renting a brick-and-mortar space. Good neighborhoods can cost small businesses a small fortune. Virtual offices provide a cost-saving alternative.
Location is still important despite the rise of telecommuting and virtualization. Virtual offices, however, help businesses improve their image without all the extra expenses.