Young family having on the beach in Ventura, CA
As we look at how lifestyle and entrepreneurship are blending together, perhaps potential entrepreneurs should look at how much sense location might make with respect to starting your business. We could look at location in two ways. One in the physical sense if you are planning a brick and mortar business. The other is based on where you want to live. Both have several variables that are important.
First, lets look at the implications of a physical business. You’ve probably heard the classic advice, “Location, location, location.” The importance of the location of your business cannot be stressed enough, despite the rise of technology, virtual communication and cloud businesses. A business’s location with respect to your customer base is critical.
How important is location to your business? Review these questions to help you understand where to locate your physical business:
Does the success of your company rely heavily on customer traffic?
Is location convenience important to your customers?
Do you rely on local suppliers of goods?
Is brand visibility important for your growth?
Are there any legal implications of your location?
Will you have competitors nearby?
Will your customer base change in this location in next 10 years?
Positioning has always been an important element of setting up a new business. Your success as a business depends on how well you are positioned to be found. Positioning includes various factors, from location to the price of your product or service to the message you use to promote the business, online and offline.
If, however, you are thinking of starting a company based on your lifestyle, where you want to live, then you have other criteria to consider. And it’s not necessarily about being a digital nomad and working remotely. It is mostly about where you want to live and enjoy your life. But you should understand exactly what resources are available in the city you want to live in.
Let’s look at how you might evaluate your “location” based on an online business:
Is the state somewhat tax friendly for online sales?
Can you find the exact talent you need in that city?
Can you afford the talent in that city?
As you grow, what will it cost to house employees via rent and business costs?
What is the cost of living in that city?
Is there a strong investor base in that city?
Does the city have a solid entrepreneur network?
Most entrepreneurs don’t really think about the location of their startup with respect to what they will need to grow the company. Is it a good idea to start a company in San Francisco that is dependent on skilled coders but due to the high costs, should you start the company in Austin? Depends. Do you want to live in Austin?
It’s not enough to just think you can create a company and figure out lifestyle and business needs later. The founders of Stance all looked at where they wanted to live, the cost and availability of employees in that location and decided on San Clemente, an ocean based community between San Diego and Irvine, CA. Now approaching ten years in business, at over $350 million in sales, it appears to be a good decision. Not just because of their lifestyle, but their employees also love the location. The same rings true for Patagonia. How else do you explain a $800 million company based remotely in Ventura, California that employees love to work at? No disrespect to Cleveland, but not sure if Patagonia would have been as successful there.
Location, location, location. It seems to ring true whether you are doing a physical place or an online business, just for different reasons.