You can get a good sense of the community surrounding your target business location by looking at basic data from the Bureau of the Census. For starters, Census demographic information can tell you the numbers and types of people who live in a certain geographic area, classified by age and sex. It can also tell you the number of households, the average household size, and the average, median, and per capita income levels in a given area.
Community services. When you are thinking about buying a personal residence, the quality of the community's social services (such as police and fire protection, education, and health care) is something that you may give a lot of thought to. Business owners should give the same level of attention to this issue when considering where to locate their business facility.
It's not to difficult to conjure up a list of bad things that could happen to the facility itself, and the people in it, if the facility is in an area that does not receive good police and fire protection and that does not have access to emergency health care. Added to the human costs are dollars-and-cents costs for legal liability and attorneys' fees, theft, and higher insurance costs.
What may be less apparent are some of the less direct effects of community services such as education, health care, and welfare services. A quality local school system can give your business an available pool of well-educated potential employees. Just as important, local community colleges and high schools can be resources that your business can draw on to encourage employees (possibly through tuition reimbursement programs) to improve and enhance their job-related skills.
Community attitude. When you reach the point at which you are ready to pick out an actual facility site, you will have to consider whether the zoning and the private land use restrictions that apply to the property will allow you to operate your business there. This question also is important when deciding in which community to locate your facility. While you'll always have to check the zoning classification and rules that apply to a specific parcel of property in a community, it is possible that the community will forbid your type of business anywhere within its boundaries.
Additionally, a community's zoning laws, and other rules relating to businesses (such as licensing fees, "head" taxes, and rules restricting time or manner of business operation), can provide a glimpse of the community's attitude towards businesses similar to yours. Looking into these zoning rules and business taxes can give you two valuable pieces of information: an estimation of at least one part of the economic costs of locating within that community, and an idea about how likely it is that the zoning authorities will act to give you a variance, if needed.
What can you do if you find what you think to be an ideal facility for your business, but you can't use it as you intend because this use would be forbidden under current zoning rules or private land use restrictions? You can enter into the rental or purchase agreement for the facility, but insist on a contract provision that lets you back out of the deal unless you are able to obtain a zoning variance or judicial relief from a private land use agreement within a specified time. Because of the importance of this transaction to your business, and the legal technicalities that are often present with a real estate property transfer, we suggest that you obtain competent legal advice about the content of such a contingency provision.
Access to credit. The availability of credit can be an important asset to your business. Traditionally, financial institutions have been more likely to grant loans to small businesses that are within the same community or neighborhood as they are. This means that if you choose to locate your facility in an area that is not well serviced by several financial institutions, you may have difficulty obtaining credit at a reasonable rate.
Available utilities. No matter what kind of business you are in and what type of facility you envision, the efficiency of your business operation will be affected for the worse if utilities such as power, heating fuel, telephones, and water are not reliably available at reasonable prices.
You might want to consider having an emergency power generator at your facility. Although such a system probably wouldn't be sufficient to keep your whole business operating, it might be useful in some situations. For example, if severe damage to business equipment or inventory (such as computers or perishable goods) could be avoided by maintaining temperature control in a small area, having such a back-up generator might avoid costly losses. If power outages would mean big losses to your business, you might also be wise to consider adding power interruption coverage to your business insurance policy.
Once you have moved into a particular business facility, you normally will
not have a choice of what company will furnish power, heating fuel, and water.
Companies that deliver these utilities usually have monopolies within given
geographic areas. If you have not yet chosen your facility, however, the
question of utility costs is something that should be factored into your
decision. It's possible that locating your facility across the county, town, or
even the street (where utilities are provided at lower rates by another company)
may save significant power and water costs.