How Important Is Your Business Location?
We’ve all heard the saying that in retail your success comes down to three things: Location – Location – Location!
There are exceptions, retail operations which prosper regardless of their location.
An example of this is Peters of Kensington , a retailer based away from traditional retail locations in the Sydney suburb of Kensington. Consumers don’t think twice about travelling from one side of Sydney to the other just to shop there.
Location will always be the major driver within most retail operations because you have to be where there is traffic (i.e. shoppers). It’s why we’ve seen huge outlets such as Walmart and massive “megamalls” emerge.
There are megamalls everywhere nowadays. Interestingly, Manila Philippines where I am currently based is home to three of the world’s Top 10 megamalls. Forget a 2 hour outing when you go to these places – they are a full day affair, and shopping is only a part of it as there are dozens of great dining establishments and many entertainment options within the one facility.
Location matters on the Internet as well
When people say you can be based anywhere and make money online, they are correct. You can be lying on a beach in Mexico with your notepad and conduct an online business from there nowadays.
Amazon.com is the perfect example of what is possible with the Internet. Whilst they have distribution centers in many locations, their actual location is not important. Their business, like many others on the Internet, is ubiquitous.
That’s the beauty of an online business – the world is your market and you can literally drive your business from anywhere.
However, it is vastly different matter for many small businesses.
An estimated 60% of business searches on the Internet are location-based. That’s because people like to shop close to home and deal with someone they already have a relationship with or can get to know personally. Quite simply, people like to deal with someone they “know like and trust” … and ideally that person is someone they can eyeball.
This is partially why online videos and especially webinars have become major sales tools on the Internet. They provide a vehicle for putting a human face on your activities.
Social media is another way of putting a “human face” on your activities.
Interaction is a major consideration
Silicon Valley has prospered over the years because of an “innovation” energy you don’t find in many other places. It’s an energy generated by the number of technically bright and forward thinking people all in one place constantly interacting with one another. This interaction is often the starting point of a breakthrough new idea / direction.
Twelve years ago when I was based in Brisbane Australia, it was the home to 3 of the top 5 online pornography marketers in the world. When you went around the online industry in Brisbane in those days, a vast majority of the people you would confront worked in or came from that sector … and it influenced the way they thought. It wasn’t a good place to be based at all at that time if you were looking to interact and learn from others in the online industry.
Fortunately, things have changed and Brisbane is no longer a hub for that type of activity – i.e. mindsets are the same as elsewhere once again.
Your supply chain is another possible driver
I often get asked why I base myself in Manila, Philippines. It’s got nothing to do with climate, cost of living, laid-back lifestyle, or an untapped market for so many things (as is the case with many developing markets) which are the main influencing factors for many Expats living here.
Rather, my motivation is that Manila is a Business Process Outsourcing (BPO) hub . I call it a hub as the Philippines BPO industry generated $7.2 Billion in revenues in 2010 and is growing at the rate of 15-20% pa and is projected to be generating $16 Billion in revenues by the end of 2014.
If you are going to offer services in this sector as we do, then you MUST understand the pulse of the industry.
You cannot develop an appreciation or stay in touch unless you are ON-THE-GROUND getting around to various outsource facilities on a regular basis, interacting with staff “out of hours”, and regularly meeting people who are here specifically looking for a way to reduce their operating overheads and hence constantly learning what the market needs.
You cannot do this when you are based thousands of miles away!
- Focus on building your brand – as Peters of Kensington has done. This more than anything can help you overcome any limitations which your current location imposes.
- If your business is “local”, then focus on local marketing options rather than spending money on marketing which may be more globally oriented.
- By all means think global, but you may need to do so through a separate / 2nd online business rather than merging it with what you do. (Having more than one business / income stream is actually a positive nowadays.)
- Base yourself in an environment which offers synergy to what you are trying to achieve. The ideal is a place where there are like minded people to interact with and / or allows you to achieve a goal which needs specific expertise / resources.