Choosing the right business location

Choosing where to locate your business and what type of premise it will operate from are core decisions that can contribute to your business success.

To help you make these decisions, you will need to conduct some research and planning. We have checklists below that can help you with your research and to decide on potential sites.

The most suitable location and type of premises for your business may change over time. Consider whether the location and premise will be suitable for your business needs in 1, 3 or even 5 years, by asking yourself these questions.

  • Do you need to invest in physical premises or will your business be primarily online (supported from a home office)?
  • Will the size of the premises be suitable if your business expands or downsizes?
  • Will the location remain suitable if your business evolves or you change the products and services it provides?
  • Will your business be accessible for you and your customers? Is it likely to remain this way?
  • Are there any risks associated with the premises or location now and in the future (e.g. possibility of natural disasters)?
  • What zoning, new development and council regulations will your business operations and location(s) need to comply with?

Considerations for different premises types

When looking for a business premise that will be suitable for you, you should assess your business characteristics to determine the type of premise you need and consider the advantages and disadvantages of each option below.

  • Advantages

    • There is often a variety of sizes and different locations to choose from.
    • There are options for leasing part or all of a building depending on your business needs.
    • Often the warehouse district is close to freight and transport routes.
    • It may be located with other similar businesses that provide complementary services (e.g. equipment servicing and trades).

    Disadvantages

    • It may be located away from central business districts.
    • It can be expensive to fit out.
    • Often it can come with high up-front and maintenance costs.
    • It may require investment in security systems and services.

    Example businesses that might suit a warehouse

    A warehouse might suit:

    • suppliers needing access to freight routes (e.g. major roads, wharves, airports)
    • manufacturers needing a lot of space for equipment and products
    • businesses that make noise.

    Read about buying or leasing industrial land.

  • Advantages

    • Enables global access to customers 24 hours a day.
    • Removes costs of leasing or purchasing premises.
    • Gives you greater flexibility.
    • Can operate from anywhere with a good internet connection.

    Disadvantages

    • You need a consistent and reliable internet connection.
    • It may come with risks associated with security and privacy.
    • You will need a high level of knowledge and skill to operate it.

    Example businesses that may suit an online business

    Online businesses are suitable for a wide range of businesses, including:

    • information technology
    • retail
    • customer support.

  • Advantages

    • It can be cheaper than other premise options.
    • It is more convenient.
    • It gives you greater flexibility.
    • Time will be saved on commuting.
    • Your overheads are lower.
    • You could have some tax advantages.
    • It is easy to set up.

    Disadvantages

    • Space and size may be limited.
    • It can cause disruptions to family or other household members.
    • The location may not suit clients, suppliers or couriers.
    • Noise, signage, light and smell can affect neighbours.
    • It may negatively affect work-life balance with easy accessibility leading to long working hours.
    • There may be a lack of parking or privacy.
    • You may need specific council permits (e.g. for signage).
    • The sale of the home property could attract capital gains tax.

    Example businesses that may suit a home office

    A home office may suit:

    • small manufacturers
    • artisans
    • consultants
    • online retailers
    • freelance contractors.

    Read about starting a home business.

  • Advantages

    • It can come with longer leases.
    • There are varied locations including those close to central business districts.
    • You can have many choices of premises of different sizes and locations.

    Disadvantages

    • It may not support an expanding business.
    • It can come with high fit-out costs.
    • Building maintenance fees can be expensive.

    Example businesses that might suit an office or retail premise

    Office or retail premises may suit:

    • professional services intending to stay for a long time and are unlikely to expand
    • small retail shop unlikely to expand
    • businesses requiring easy access for car and foot traffic
    • business owners who cannot work from home and require a professional office space.

    Read more about:

  • Advantages

    • Short-term contracts are available.
    • Different office sizes are available to suit different business needs.
    • You can work from various locations with many providers across Queensland and globally.

    Disadvantages

    • The facilities are shared.
    • It can be expensive.
    • There is a lack of privacy and stability for clients.

    Example businesses that might suit a serviced office

    Businesses that might suit a serviced office include:

    • those requiring a head office in a central business district with other operational sites in cheaper locations
    • professional services intending to stay short term
    • early-stage businesses intending to lease short-term office solutions as they grow their business
    • sole traders requiring occasional office space for client meetings.

  • Advantages

    • It's a low-cost solution for business premises.
    • There is no need for long-term contracts or leasing.
    • There is access to collaboration and advice from other workers.
    • You have increased information sharing.
    • You have access to prototyping equipment.

    Disadvantages

    • There is no privacy.
    • It's often short-term leasing only.
    • There is a lack of stability.

    Example businesses that might suit a co-working space

    Businesses that might suit co-working space include:

    • innovative teams working collaboratively on a project
    • sole traders wishing to share information and network
    • businesses who don't need to serve customers from their premises
    • businesses just starting out that do not want to commit to a long-term lease.

Researching the location

When you have chosen the type of premise, you will need to research the prospective location to ensure that it is suitable for your business.

Consider your target market, competitors and complementary businesses when asking yourself the following questions.

Considerations
Notes
  • Will you be too close to businesses offering similar products and services? If so, how will this affect your business?
  • Learn about researching competitors.
  • Could any nearby businesses contribute to the running of your business and help you meet your goals?

Investigate the lease

Leases are contracts that outline all the terms and conditions that are associated with occupying a certain premise, including:

  • how long you will occupy
  • the notice period you must provide before exiting
  • renewal options and terms
  • details of any fit-out that is permitted and activities required to 'make good' (e.g. return everything back to the original conditions before you vacate)
  • details of all outgoing costs over and above rent (e.g. waste or water costs)
  • processes for dealing with disputes.

If you are planning to lease a business premise, you will need to investigate the lease terms and conditions carefully before you agree to them. You should consult with a trusted mentor, friend or business adviser for advice.

Consider the following options and their advantages and disadvantages, and what types of business they are suitable for.

Short-term renting or pop-up store

Advantages

  • It allows you to try out the location before committing to a longer-term lease.
  • There are no fixed long-term contract and associated costs.

Disadvantages

  • There is no long-term security.
  • There could be increased costs associated with moving if the location is unsuitable or if the lease is not renewed.

Example businesses that a short-term lease or pop-up store would suit

This premise option will suit:

  • any business that is uncertain about their market or long-term cash flow
  • seasonal businesses such as Christmas markets or those involved with specific events
  • businesses that require a short-term solution for sales (e.g. retail overflow or stocktake sales).

Long-term leasing

Advantages

  • Enables longer-term strategic planning.
  • Can help a business brand become established.
  • Gives consistency for customers.
  • You have some negotiation power with the landlord (e.g. rent-free periods, landlord contributions to partial or full fit-outs).

Disadvantages

  • It can be costly.
  • There could be disruption to trade when refurbishments are required to keep the premises in good condition.
  • There may be costs associated with breaking the lease if a business outgrows the premises before the lease expires.
  • There may be costs associated with make-good clauses in the lease when existing.
  • More established businesses are less likely to outgrow the premise within the lease period.

Example businesses that long-term leasing would suit

This option will suit businesses:

  • with a longer-term (3–5 year) plan
  • that have a secure cash flow and steady growth projections.

Buying a business premises

Advantages

  • It gives the business more control over the fit-out and building improvements than a leasing option.
  • The business can sublease to help with business costs.
  • The business will have an appreciating asset.
  • It can give a level of consistency in outgoing costs.

Disadvantages

  • Buying business premises can involve substantial upfront and ongoing costs (e.g. fit-out, mortgage repayments, maintenance and property costs).
  • There is a risk of losing money if you sell the premises for less than you purchased it for.

Example businesses that buying a business premises would suit

This option is suitable for businesses:

  • requiring a long-term location
  • needing to show liquidity on their balance sheet.

Learn more about:

Business premises checklist

Using a checklist is a practical way to compare business premises and helps you choose the site that best suits your business.

Once you have scored and compared all your prospective premises, you can create a shortlist. If no premises scores highly on your checklist, it may be time to consider another area.

You can customise this checklist to include information specific to your business.

Using the checklist

  • Complete and print out a checklist for each business premises you are considering.
  • List items that are important to your business and give each item a weighting. For example, a weighting of 1 means the item is not essential, while 5 means the item is essential to your business.
  • Grade each item—for example, a grading of 1 means the item is not satisfactory, a 5 means it is passable and a 10 means it is excellent.
  • When you type your entries into the checklist below, it will multiply the weighting by the grading to give a weighted score for each item.
  • Add your business-specific details to the 'Other' section and score them.
  • Click Print checklist to print a copy for your records.
Checklist item
Weighting
1–5
Grading
1–10
Score
Total:
{{calculateTotalScore()}}

Also consider...