Does Online Business Location Matter?

In decades past, the location of a business was extremely important. However, improvements in technology and infrastructure have made running a company easier than ever – and location has become less significant.

Technically, as long as there is reliable internet access, an online business can be run from any location in the world. However, before you launch your online startup in the middle of nowhere, there are a number of things to consider.

Resources

The implications of running a company in a remote location could affect your entire business. Although the rent and living costs are inevitably steep in a built up location, you will also have a wider selection of resources available – along with the ability to choose between different suppliers and contractors.

As suppliers in remote locations face less competition, their prices are likely to be higher than their city-based counterparts.This translates into higher costs for your business. Similarly, although wages are often lower in rural areas, the candidate pool will be much smaller – and potentially of a lower quality.

Low Rent

Businesses with a physical storefront often rely on passing customers. As a result, theyare generally located in busy areas such as shopping centres, high streets, and retail parks. However, these prime positions come with a price tag to match.

In comparison, online businesses do not depend on passing trade. Therefore, they can bypass the most expensive areas of town, choosing instead to rent cheaper premises in less desirable locations.

Brand Image

Online businesses often need a postal address for returns and customer queries. If your company is located in a well-known area or city, the address will add a layer of legitimacy and trustworthiness to the business.

However, if you operate somewhere with a poor reputation, this can negatively affect your brand image. You should aim to have an address in a recognisable and trustworthy area – particularly if you do businesses overseas.

Competition

As physical business owners know, it is unwise to rub shoulders with your direct competitors. Indeed, many smaller companies find themselves pushed out of town centres when a larger competitor moves in.

However, online businesses have nothing to fear from setting up shop next to a rival enterprise. Indeed, it could even prove beneficial, as the constant presence of a competitor could inspire you to work harder at developing the business.

Although not an essential factor, location can still have an effect on online businesses.Small companies and startups are more likely to be affected by a poor choice of location. However, it is unlikely to be the deciding factor in the success or failure of a business.

This post was written by Jade Symons of Westminster Live, an internationally recognised television studio based on the banks of the River Thames.