2.3. Company & Management

2.3.5. Site selcetion

The location of a company must be determined from the customer's point of view. The location is optimal when customers can reach the company easily and quickly. The choice of location is about proximity to customers and accessibility, it is about transport connections. This can be, for example, a special location in the centre of a city or in a preferred place in a district. Precise market and consumer knowledge is crucial for the location question. The location analysis is part of the market analysis. In order to find the right location for one's own company, location factors should be defined that are relevant for one's own company.

In the following, individual location factors and their potential are discussed in more detail:

Type of business: The type of business determines the location. In the case of a retail shop, a restaurant or a shop, the importance of location is immediately obvious. The choice of location arises in different ways depending on the type of business and the industry. Businesses serving a residential area have to define different criteria than businesses that want to sell their products or services in an entire city or internationally in domestic and export markets.
For an internet shop, the physical location is relatively unimportant. However, if the latter wants to sell goods on a large scale, the company location becomes a central issue from a logistics perspective. The packaging and shipping costs could easily exceed the value of the goods to be sold.
Market and customer potential: The location should be based on the market and customer potential Proximity to the sales market offers logistical advantages. These must be determined. Market data must be collected. This is provided by statistical offices such as population registration offices, state and federal offices.
power: Purchasing power is an indicator used in consumer research Information and data are provided by the Statistical Yearbook of the Federal Republic of Germany or the Gesellschaft für Konsumgüterforschung GfK, Nuremberg. Each city, each district has a certain purchasing power, which is defined by the population structure, commercial settlements, etc.
Competitors: The determination of the location must be made dependent on the competitors This requires a competitor analysis.
Location: The traffic situation must be taken into account in view of the mobility of customers Parking spaces are extremely important for individual traffic. The connection of local public transport must be examined.

A high density of passers-by, such as in city centre locations, pedestrian zones and arcades This is associated with correspondingly higher shop or office rents.

The company must weigh up whether a prime location or another location is better. The proximity of shops in other sectors with high customer frequency, doctors' surgeries or banks argues for a more favourable location. Shops with complementary offers in the vicinity can bring synergy effects. The existence of consumer markets, specialist markets or hypermarkets in the catchment area has a negative or positive effect depending on the nature of the own product range.

Workforce: With an increasing shortage of skilled workers, the question of the right employees in the company is becoming more and more important. The regional or even supra-regional labour potential can become significant for a particular company. An essential factor here is which qualifications are available on the labour market and which the company needs.
Trade tax: A commercial enterprise depends on well-developed transport routes. The trade tax burden depends on the respective assessment rate of the municipality. If the general conditions are otherwise similar, it may be worthwhile to make a comparison. Cities and municipalities like to promote the settlement of a company. The trade tax burdens show clear differences.
Commercial space: In principle, a permit for commercial use must be available for production rooms, shops, offices, workshops or warehouses Information on permissible use can be obtained from the relevant town hall / building administration. The premises must comply with building regulations and the Ordinance on Industrial Premises (e.g., recreation room for staff). Contact the Employer's Liability Insurance Association and the State Office for Occupational Safety and Safety Engineering. The area and layout of the rooms should be suitable for sensible use. Are there any possibilities for expansion? Large shop windows are alwaysadvantageous.
Work and residential premises: If a business is to be run from a flat, the consent of the landlord or the co-owners is required. As a rule, an activity as a commercial agent, typing office, etc. is unproblematic, as long as no substantial public traffic is associated with it. However, intensive use could be inadmissible as a misuse of residential space. If in doubt, contact the housing office at the town hall.
Regulations: Producing companies usually must comply with extensive environmental regulations Energy aspects are gaining increasing economic importance.

The business plan should highlight both the development prospects of an attractive location (e.g., is it possible to expand the area, is it in an attractive location, does it have good access) and the costly effects and investments (extensions and conversions, parking spaces, contaminated sites, industrial estate).

In the competition for customers, the quality of the premises and the equipment play an important role. For a tanning salon, it is important that it is perceived by the "walk-in customers", the ambience should invite a feeling of well-being and the equipment should be state-of-the-art.

Equipment and location cannot be left to taste alone. There are legal requirements that must be considered in the investment and cost calculations of a business plan. The Workplace Ordinance and its guidelines define minimum standards for room size and height, temperature and ventilation, lighting, windows, traffic routes, toilets, washrooms, break rooms and changing rooms, sound levels. Furthermore, the trade regulations, accident prevention regulations or emission protection values must be observed. Fire protection measures can be particularly costly. Responsible authorities are the employers' liability insurance associations, the trade supervisory authority and the fire brigade.