There are many factors that can make a business prosperous. Successful entrepreneurs will tell you that one of the most important things to consider for the success of any venture is finding the right location. This is such a crucial factor for a company’s success since location affects nearly every aspect that contributes to the favorable outcome of a company.

During our country’s tough economic times, we have often heard about companies ‘outsourcing’ or going overseas. The reason for this type of move was not because there was a desire to expand their business; the real reason was rather to cut down on operating expenses by getting lower labor costs and that type of labor is only available overseas. Although it may not be healthy for any local employment market, it definitely helps any company cut down their expenses and increase their revenues. This is a very real example of how location can make or break an organization. There are numerous ways that location can affect a business. In this article, we will enumerate some of the reasons why it is so important a factor to profitability.

• Manpower – Workers are the lifeblood of any business. Whether you have one that requires workers performing their job in an office or ones doing manual labor in a factory, you can certainly take advantage of a good area to gain workers that have the right skills for the job that needs to be done. There are some locales where workers are known to have certain skills. If your product can make use of those skills, then you would probably be wise to be at that location to get those skilled individuals to work for you and give your organization an edge over other competition.

Due to the present economic status of this country, there are places where unemployment rates are high. You can utilize such locations to leverage your own venture. High unemployment rates mean that you can hire workers for your particular production requirement at less cost than what you would normally pay elsewhere and thus reduce your operating costs.

• Clients – A business will only start increasing its revenue once it has clients. One way to increase your customer base is to make your service or product accessible and available to those individuals. Typically, the best location for a company is in areas that are easily accessible such as designated business districts and shopping centers. These places are typically easy to locate and offer adequate parking to attract many potential clients to your product or service.

• Resources – In some cases, companies require certain raw materials to make their product or offer their service at a profitable cost. An example of this would be a furniture factory would decrease its costs for raw material by locating close to a forestry industry location and/or a lumber factory. A restaurant that specializes in ‘fresh daily’ seafood will have lower costs if located close to an ocean or gulf. Locating close to the resources necessary to profitably create your product is a definite plus factor!

• Competitors – In some instances, you might want to locate your operation away from competitors in order to attract a larger number of clients. A gas station and/or convenience store is a good example of such a business. If there are other gas station/convenience stores on all the corners where you are located, you will receive a much smaller share of the potential profits at that site than if you were in a location where you are the only similar business offering your service.

• Similar Specialty Stores – A very popular concept across the country is to have shopping centres that are carefully managed to offer many similar yet different shopping experiences to the customers. In this case, a good site for your bistro sandwich shop would be in such a shopping district. In fact, in this instance the location would have an extremely large controlling factor over potential company growth and profitability!

There are indeed many factors that can come together to affect the profitability of a business or company. The ones listed above are just a few of those potential elements at play in the success of any enterprise. It is perhaps very true when you hear the saying: "Location, location, location – it’s all about the location!"