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Monday, October 8, 2012

6 Environmental factors that may affect your business

Near the top of Haleakalā, an extinct volcano in Maui, lives a unique and beautiful plant called the Silversword.  The plant only grows in the volcanic cinders between 6,000 and 10,000 ft. above sea level. This protected plant nearly became extinct because of environmental factors and predators.  Through regulations and the government’s careful attempts to protect the plant, it is returning in greater numbers.  The plant is environmentally sensitive and has specific needs to flourish.  In a sense, the plant needs the right environment and care just like your business has specific needs to survive.

Many factors can affect the survival and growth of your business; e.g., local competition, talent pool, travel convenience, traffic, proximity to suppliers, and regional support.  The choices you make in the early selection of location for your business may affect its growth and health in the long term.  You may consider these factors and incorporate them in your business plan or you may elect to consider location shortly after initiation of the business activities. In either case, do not ignore them as they may affect the long-term direction of the business.  A few factors you may wish to consider are below. 

1.      Local Competition:  Depending on your business, the local competition may be a concern.  Opening a business within a regional market will be impacted if similar businesses sell related products in the same market.  It may be great for the consumer because they have choices.  Reduction of your market size may limit your sales.  This is the same for competition in any market and consideration of the impact on sales by competition is always a concern.  For example, it is easier to tolerate only half of the worldwide market but may be difficult to be limited to half of the market in your city. 

2.      Talent pool:  A local talent pool helps reduce recruiting costs and increases potential for obtaining the best employees.  Working in a remote location requires convincing people to move and may result in paying relocation expenses.  Should your company fail, the employees would have minimal options for local employment.  These factors may significantly affect your ability to recruit.  This does not even factor in desirability of the location to future employees!

3.      Traffic:  People driving by a store, a sign, or seeing ads on the internet are important to sales.  The larger the numbers seeing your offerings result in a greater number of those converting to becoming customers.  You may only obtain a 0.01% conversion rate, so increased traffic is critical to increased sales.  The locations you select for your business, your website, and SEO all contribute to increased traffic.

4.      Proximity to suppliers: This may be more critical for some than others. Contract manufacturing is more common these days and it is possible to optimize costs by proper selections.  However, you may be one of those companies that having local suppliers is important.  The proximity may help with your ability to reduce inventory and make use of “just in time” shipping. 

5.      Regional support:  Starting a business can be a daunting task.  Some states encourage startups and provide incentives as well as subsidies.  Grants, loans, tax incentives, local support groups, and much more may be available in the right locations. 

6.      Travel convenience:  Do not underestimate the location of your business to different forms of transit.  People prefer to come to your business with minimal travel stress.  Distance from airports, trains, and local transport may have an impact when it comes to business travel. Your business associates and customers as well as your team may appreciate the reduction of travel stresses.   Something as simple as easy access to taxis or shuttles may increase the increase frequency of visits. 

Taffy Williams is on Twitter by @twilli2861.  Email questions to twilli2861@aol.com. More is available via his company website ,  photo website, or “LIKE” ColonialTDC on Facebook.  You can also find him in the group Startup Group on Linkedin. Other articles are in the Charlotte, NC- small business section of Examiner.com.


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  2. A very interesting post! I agree with your emphasis on the importance of location, especially for start-ups. In addition, I think the site of your business shouldn't just be a one-time affair, particularly if you're renting space. A lot of factors must be considered, such as whether the rent is affordable and if the site is safe from potential hazards. I have made a checklist on the factors to consider when looking at a potential site to start one's business. By the way, I like the analogy with the Silversword. I think it's a clever touch.

    John Bergman @ BusinessCoachSanDiego.com

  3. Thanks for these tips! These can serve as an important guideline to those who want to be a successful entrepreneur in the future. While conceptualizing ideas is easy, putting these factors to consideration will help a business maintain its continuous operation.

    Clint Shaff

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