Businesses need site selection services when they are expanding into new markets or relocating operations. Engaging these services early in the planning process ensures that decisions are data-driven, reducing risks and maximizing ROI.
Whether you're a startup or an established company, the right site selection strategy ensures that the sites you choose align with your business goals, which ultimately supports sustainable growth. In this article, we will explore some of the reasons that prompt retail, restaurant, healthcare, and hospitality companies to turn to site selection services.
Understanding the Importance of Location in Business Operations
Location, location, location... It's a common catchphrase in business for a reason.
The strategic selection of a business site can determine success across industries, from retail to healthcare. A prime location ensures access to target markets, optimizes supply chain efficiency, and enhances brand visibility. The real estate you select also influences foot traffic, operational costs, and overall profitability. As businesses navigate an increasingly competitive landscape, selecting the right real estate is essential.
Thoughtful site selection is not just about choosing a spot; it's about securing a foundation for long-term success.
Key Signs You Need Site Selection Services
Here are key signs that your business could benefit from expert site selection support.
- Expansion Plans: If your business is growing and you need new locations, site selection services ensure you're choosing sites that align with your target customer group, supply chain needs, and long-term goals.
- Relocation Needs: When relocating, the stakes are high. A misstep can lead to decreased foot traffic and lower revenues. Professional site selection location evaluation services provide a thorough analysis to help you vet potential new sites.
- Entering New Markets: New markets bring unknown variables. Site selection analytics you understand the local landscape, including competitor presence and customer behavior, and can even tell you the optimal number of locations the market can support. This ensures that your new locations position you for success.
If you're facing any of these scenarios, it's time to consider professional site selection services. A data-driven approach ensures your business is set up in the optimal locations to thrive.
The 3 Most Popular Types of Site Selection Services
Given the importance of selecting the right real estate, many companies reach a point in their growth and development when they feel that it is helpful to invest in site selection services. With a wide spectrum of services ranging from research tools to contract negotiation, knowing which type of service you need—and when you need it—can be a challenge.
1. Site Selection Analytics
The first major category of site selection services is site selection analytics. This involves market research that focuses on understanding the dynamics of your successful sites and then identifying other sites that meet similar criteria. Consultants specializing in this area typically develop a site selection model, which can be deployed to an interactive GIS platform that allows the user to score potential sites, access market reports, and view other relevant statistics.
This type of site selection service may be a fit for you if any of the following describe your business:
- You have a person or team on staff to oversee real estate but need access to information to inform your real estate decisions.
- You are preparing to expand beyond your home market and can no longer rely solely on “gut feeling.”
- Your existing sites have inconsistent performance, and you want to reduce the number of poor performers you select going forward.
- Your real estate costs are high, and you need to thoroughly research an area before making an investment.
- Your organization is growing quickly and needs to improve the efficiency of site visits by narrowing the list of prospective locations.
2. Site Identification
While site selection analytics services identify sites through statistical models, some firms take the “personal shopper” approach by doing boots-on-the-ground research for you. In this type of site selection service model, the consultant considers and may rely heavily on qualitative factors. Does the location have the right visibility? Is it easy to access? Does it have the infrastructure needed for your business?
This type of site selection service may be a fit for you if any of the following describe your business:
- You don’t have anyone on staff to oversee real estate.
- Your existing real estate team isn’t able to keep up with the demand for site visits or needs to prioritize another project, making the “full service” route an appealing option.
- You already have access to site selection analytics and need someone to do further research on recommended sites.
3. Site Negotiation
Once you’ve identified properties that meet your site selection criteria, there’s still the financial aspect to consider. The final major category of site selection services is site negotiation. Consultants specializing in this area may represent you in negotiations with the property owner and possibly the local government if there are incentive opportunities.
This type of site selection service may be a fit for you if any of the following describe your business:
- You don’t have anyone on staff to oversee real estate.
- You are making a major real estate investment with complex negotiations and incentives.
- You are investing in an international market and need someone with local knowledge to assist with the negotiations.
- You are confident that the site has already been thoroughly vetted and doesn’t require additional market research.
Leveraging Site Selection Services at Any Stage of Business Growth
Site selection services are relevant for businesses at all growth stages, from startups scaling up to established companies optimizing operations. For startups, selecting the right group of initial locations can significantly impact their success, influencing customer access, cost structures, and operational efficiency. Early engagement with site selection consultants can lead to high-performing locations that in turn fund future expansion.
As businesses scale, site selection firms provide critical insights into expanding into new markets. Expert site selection consulting can identify optimal locations in the new market based on data-driven analysis, considering market demand, competitive presence, area draw factors, and more.
Even for established businesses, site selection services are essential for optimizing existing operations. Whether it's relocating to a more cost-effective site or expanding facilities, leveraging site selection consultants can drive efficiency and profitability.
Evaluating Business Goals and Site Selection Needs
The first step in the site selection process is always evaluating business goals. Always.
Your objectives dictate which variables to prioritize when choosing the best locations. For instance, an analytics team designing the models used to inform your site selection analysis must understand your customer base, network size, typical location footprint, location types (e.g. retail vs. outlet stores), sales channels, etc. These factors influence key decisions, such as whether to focus on differentiating customer profiles (e.g. retail versus outlet shoppers) or forecasting growth for multiple location types. The possibilities are endless.
Something else to consider during this early goal setting stage: economic development. Retailers and healthcare organizations should consider reaching out to economic development corporations in potential markets to explore available incentives for opening new locations. These incentives can significantly influence the selection process by making certain sites more financially viable.
Put simply, understanding your business goals is essential for aligning site selection with long-term success. This process involves assessing current operations and determining how different locations can support expansion or improve market reach. By clearly defining your objectives, you can ensure that your site selection efforts contribute meaningfully to your broader business strategy, driving both immediate and long-term success.
How Site Selection Impacts Supply Chain Efficiency
Effective site selection is crucial for optimizing supply chain efficiency, impacting everything from logistics to overall operational performance. By strategically positioning facilities, businesses can enhance their supply chain's agility, reduce costs, and increase customer satisfaction.
Proximity to Suppliers and Consumers
The proximity of a site to both suppliers and consumers is a key factor in site selection analysis. Placing distribution centers close to customers reduces delivery times and shipping costs, which are critical for maintaining competitive advantage. Similarly, being near suppliers ensures a steady flow of raw materials or goods, minimizing delays and production interruptions. This dual focus on proximity enables a more resilient and responsive supply chain.
Access to Transportation Infrastructure
Transportation infrastructure is another critical element of site selection. Depending on the nature of the facility you are planning, it may need to be near major highways, railroads, ports, and airports to facilitate rapid movement of goods. Robust transportation links reduce transit times and costs, enhancing the overall efficiency of the supply chain. Inadequate access to transportation can lead to bottlenecks, increased costs, and inefficiencies that ripple through the entire operation.
Sustainability and Energy Costs
Choosing strategically spaced locations can significantly reduce transportation time and resources, leading to a lower carbon footprint. By optimizing site placement for stores, restaurants, hotels, and healthcare facilities, businesses can minimize fuel consumption and emissions, aligning with sustainability goals while also cutting down on operational costs. This approach supports both environmental responsibility and long-term financial efficiency.
Impact of Incorrect Site Selection on Business
Selecting the right site is a critical decision for any business, with far-reaching consequences if done incorrectly. Consequences can include:
Operational Inefficiencies and Increased Costs
A poorly chosen location can lead to significant operational inefficiencies. For instance, if a site lacks access to the necessary infrastructure, businesses may encounter logistical challenges that disrupt supply chains and lead to out-of-stock merchandise.
Limited Market Access and Revenue Shortfalls
Beyond operational concerns, the impact of poor site selection on market access and revenue can be severe. The success of a business often hinges on its ability to effectively reach and serve its target customers. A less-than-ideal location can limit market reach, hinder customer acquisition, and reduce visibility, particularly for retail businesses that rely on foot traffic. This can result in lower sales and revenue shortfalls. Moreover, businesses that depend on proximity to other industries or clusters may miss out on valuable partnership opportunities, weakening their market position.
Financial Strain and Unexpected Expenses
Financially, the ramifications of incorrect site selection are extensive. Beyond the direct costs of acquiring and developing a site, there may be significant losses due to business interruptions during the move or setup phase. If the location fails to meet expectations, additional investments may be required to make the site viable, putting further strain on the company's finances.
Talent Acquisition Challenges and Workforce Limitations
And lastly, site selection also plays a crucial role in talent acquisition and retention. Particularly in B2C industries such as healthcare that rely on recruiting highly trained employees, a site that lacks desirable amenities, accessibility, or a high quality of life can deter potential employees, limiting the available talent pool. This can lead to increased recruitment costs and a less skilled workforce, which, in turn, impacts overall business performance.
When to Engage a Site Selection Services Provider
Knowing when to engage a site selection services provider can significantly impact your business's success. The optimal time to consult with a provider like Buxton is several months before you plan to launch your next phase of rapid growth or relocation decisions. Leveraging Buxton's expertise and advanced solutions ensures data-driven decisions, reducing risk and maximizing ROI. By analyzing customer potential, competitive presence, expected cannibalization, and area draw factors, Buxton's site selection services help you pinpoint the best locations to meet your business goals. Engaging a provider before evaluating potential sites gives you a strategic advantage, enabling more informed, confident choices that align with long-term growth plans.
Related: Selecting a Retail Site Selection Consultant
Ready to partner with Buxton? Reach out to us today to request a demo and discover how our site selection services can drive your business forward.
