Q: I want to start a small biz in my hometown, Pulilan, Bulacan. I want to put it up right next to my parents' home. It is quite far from the poblacion, so it's not really a good location. But it's the only place we've got, unless we consider leasing. A friend told me that where one locates is the most important factor in business. Please give me advice on the best place to locate my business.
— Joy, Quezon City
A: Your friend is right. Where a business situates itself could spell the difference between success and failure — especially to a trading or service enterprise.
Generally speaking, the best location is where you can transact business with reasonable convenience. It should be one that should enable you to manufacture your products and sell them at the lowest possible cost.
One of the first considerations regarding location is whether the site you are eyeing is a residential, commercial, or industrial area. If the area is residential, as the place you are eyeing seems to be — enter with caution. Not only would you need a barangay clearance for the business; you would also need the approval of the residents' or homeowners' association. Some businesses have located in residential villages only to be driven out later by protesting "vigilantes" in the neighborhood.
Find out, too, if the area is a progressive community or one on the decline. Years ago, for example, Marikina was a dying town. But look how upbeat the town has now become both as a residential and industrial location. Invigorated by the town-wide refurbishing, the Marikina shoemakers are now making a concerted move to reassert their ascendancy in the footwear market. They have not only formed into cooperatives but into a federation to meet the threat of globalization head on.
Try also to find out as much as you can about infrastructure and business development plans in the area. Is it going to be the site of a road-building or road-widening project? If it is, it can work one of two ways for your business. At best, your site becomes premium, with more human traffic flowing in and out. At worst, the place may be expropriated and you might be left with paltry compensation.
Here are other important considerations in deciding where to locate:
* Raw materials. How close are you from the sources of raw materials? Are the raw materials bulky and difficult to transport?
* Customers. How close are you to your target customers? This is critical if you are in the service, wholesale trade, or retail trade business. Do you have delivery facilities and personnel? Will the customers pick up the goods?
* Transportation facilities. If your raw materials and/or products are heavy or bulky, examine the availability and reliability of transportation facilities in the site.
* Labor. Can you employ people living in the vicinity? Do they have the skills you need? If your business is labor-intensive, be sure to locate in population centers where labor is abundant. Consider, too, the possibility of using home or community-based labor, especially if your business is in the craft or garment line.
* Power and other utilities. Are light and water available? Are these in adequate and reliable supply? How are the power rates in the place? Are these affordable to a small entrepreneur like you?
* Waste disposal facilities. Will there be a lot of waste by-products during processing? If you are into pulp and paper manufacturing, electro- plating, wood-working or plastics business, this will be an important consideration.
* Community regulations. Are there rules, regulations, and restrictions that will affect businesses like you? Does the local government encourage entrepreneurial activities? Are the residents tolerant or accepting of businesses or industries locating in their community?
* The decision to own or to rent. Will you buy the site or rent it? Can you afford the price? Are the terms reasonable? Is it titled property? If you are leasing, how long is the lease contract? Whether you are buying or leasing, how much will it cost you to make it a more suitable place for your business? For example, would you have to excavate or put in land fill? Do you need to pave the roads?
Just a reminder before you take the plunge: Deciding where to locate is not the end-all of setting up a business. You also have to prepare a business plan, register your business, raise capital, acquire equipment, hire and train people. Most important, you have to prepare yourself for the challenges and hard work and all the rewards and risks small entrepreneurship exacts. Unless you have done all these, you're not ready to get started yet.
Source: Philstar.com
— Joy, Quezon City
A: Your friend is right. Where a business situates itself could spell the difference between success and failure — especially to a trading or service enterprise.
Generally speaking, the best location is where you can transact business with reasonable convenience. It should be one that should enable you to manufacture your products and sell them at the lowest possible cost.
One of the first considerations regarding location is whether the site you are eyeing is a residential, commercial, or industrial area. If the area is residential, as the place you are eyeing seems to be — enter with caution. Not only would you need a barangay clearance for the business; you would also need the approval of the residents' or homeowners' association. Some businesses have located in residential villages only to be driven out later by protesting "vigilantes" in the neighborhood.
Find out, too, if the area is a progressive community or one on the decline. Years ago, for example, Marikina was a dying town. But look how upbeat the town has now become both as a residential and industrial location. Invigorated by the town-wide refurbishing, the Marikina shoemakers are now making a concerted move to reassert their ascendancy in the footwear market. They have not only formed into cooperatives but into a federation to meet the threat of globalization head on.
Try also to find out as much as you can about infrastructure and business development plans in the area. Is it going to be the site of a road-building or road-widening project? If it is, it can work one of two ways for your business. At best, your site becomes premium, with more human traffic flowing in and out. At worst, the place may be expropriated and you might be left with paltry compensation.
Here are other important considerations in deciding where to locate:
* Raw materials. How close are you from the sources of raw materials? Are the raw materials bulky and difficult to transport?
* Customers. How close are you to your target customers? This is critical if you are in the service, wholesale trade, or retail trade business. Do you have delivery facilities and personnel? Will the customers pick up the goods?
* Transportation facilities. If your raw materials and/or products are heavy or bulky, examine the availability and reliability of transportation facilities in the site.
* Labor. Can you employ people living in the vicinity? Do they have the skills you need? If your business is labor-intensive, be sure to locate in population centers where labor is abundant. Consider, too, the possibility of using home or community-based labor, especially if your business is in the craft or garment line.
* Power and other utilities. Are light and water available? Are these in adequate and reliable supply? How are the power rates in the place? Are these affordable to a small entrepreneur like you?
* Waste disposal facilities. Will there be a lot of waste by-products during processing? If you are into pulp and paper manufacturing, electro- plating, wood-working or plastics business, this will be an important consideration.
* Community regulations. Are there rules, regulations, and restrictions that will affect businesses like you? Does the local government encourage entrepreneurial activities? Are the residents tolerant or accepting of businesses or industries locating in their community?
* The decision to own or to rent. Will you buy the site or rent it? Can you afford the price? Are the terms reasonable? Is it titled property? If you are leasing, how long is the lease contract? Whether you are buying or leasing, how much will it cost you to make it a more suitable place for your business? For example, would you have to excavate or put in land fill? Do you need to pave the roads?
Just a reminder before you take the plunge: Deciding where to locate is not the end-all of setting up a business. You also have to prepare a business plan, register your business, raise capital, acquire equipment, hire and train people. Most important, you have to prepare yourself for the challenges and hard work and all the rewards and risks small entrepreneurship exacts. Unless you have done all these, you're not ready to get started yet.
Source: Philstar.com
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