Step 3 of Starting a Business: Choose a Business Location


Choosing a Business Location: What I Learned the Hard Way

When I started my first business, I was able to gloss over the hard part of choosing a location to set up shop. The sole reason for starting my company was because I needed a business license in order to legally make money as a freelancer in my area. At the time, I didn’t give it much thought: wherever I was, that’s where my business was located.

Fast forward several years, and things got a little more complicated. In being a part of starting another business—this one with actual employees, and not just me working at my kitchen table—I would find myself traipsing all over Central Florida in the blazing sun and suffocating humidity, in search of the perfect (or even adequate) office space for a new small business.

At that time, I was fortunate enough to have on my team someone who had experience with hunting for commercial real estate. He knew the ropes and the realtors, and he took the helm on the search. As we searched, I learned about all the things I hadn’t had to think about when starting my freelance business out of my home. Some things were straightforward, requiring either research ahead of time or consideration as we searched—things like zoning laws, property taxes, how safe the area felt, proximity of competitors, and cost per square foot.

Other things wouldn’t have occurred to me until they were pointed out as things to keep in mind—things like the parking situation, office park neighbors, what the commute might be like for future employees and clients, and whether we’d have to do any renovating before settling in.

I also learned that searching for an office space for the first time isn’t nearly as exciting as searching for a first-time home. Looking at potential business locations is colder, more impersonal than house hunting. The stakes seem higher and further-reaching, making the decision seem more difficult, more permanent.

But there’s an equal sense of ownership and excitement when you finally find that one, perfect space for your new business. Although, as with anything related to starting a business, nothing is ever really perfect.

Expect the Unexpected, Plan for the Unplanned

Not too long after I started freelancing, I was presented with a great opportunity I couldn’t pass up. It would mean putting my freelance business on the back-burner in favor of joining a brand new small business, a “daily deals” company outside Orlando.

Daily deal websites, if you don’t remember from the height of that trend, sell vouchers for discounts at restaurants, salons, shops, and any and all sorts of businesses. The deals typically switch out every day, or get cycled through every week or so, and tend to be categorized by city. Our daily deals company focused on deals for businesses in and around Orlando.

I wasn’t an owner at this particular company, but I was part of the team from very close to the beginning. When I signed on, we didn’t yet have an official workspace. So we spent the first few weeks doing business out of the owner’s own office, since he had some extra room. Once we’d found our company’s actual office space, the group of us—now consisting of the owner, some contractors, and one other employee besides myself—did our work on card tables I’d brought to the office from my garage, and some cheap office chairs the owner bought off Craigslist.

We quickly realized we’d made a few mistakes in securing this particular office location. Though our rent made up the vast majority of what we spent on the facility, there were some unexpected problems and expenses we should have better prepared for. Shortly after we moved in, we had problems with the air conditioning. This might sound like a high-maintenance complaint, but anyone who’s familiar with Florida weather knows how desperate a no-AC situation can be. No indoor space should have an atmosphere resembling that of a swamp, least of all an office where you’ll spend ten to twelve sweaty hours each day in front of a computer. It took an AC repairman a few visits, but we finally got it fixed.

Then there was the IT problem. We’d negotiated the office space with the understanding that it was ready for all the IT systems we would need in order to get our company up and running. Surprise, surprise: as soon as we moved in, we realized we needed to plan some immediate and not-insignificant updates.

That was also around the same time the toilets stopped working.

It was a challenge, but that’s the case with every aspect of starting a business, isn’t it? Our office had its quirks, and it would be a bumpy road in learning all of them. But it was our office, for our new business. And all the discomfort we’d pushed through seemed to fade once we painted our walls with the same fun, vibrant color as that of our company’s logo. None of the unpleasant surprises we’d faced seemed to matter as much once we got our actual desks, our cushioned office chairs, our new computers, and a soda-stocked refrigerator for the kitchen.

Plan to Expand—But Not Too Quickly

In business, as in life, all goods things must come to an end. The minor euphoria of our promising new daily deals company was shorter-lived than any of us could have guessed. Our downfall was caused by, of course, a combination of things. But expanding to new locations too quickly was absolutely a part of it.

Shortly after planning the launch date for our gorgeous new daily deals website, we hired a small but amazing sales staff who worked their networks like champs. From the moment the website launched, we had plenty of great businesses all around Orlando signing on to run deals through our website. Every week we cycled through a handful of deals. There was always fresh content, and we had a great variety going at any given time. We did everything our competitors were doing. But for the life of us, we couldn’t get enough people visiting the site, let alone buying vouchers from us.

Of course, part of that was due to the simple fact that our company was still new. Our lack of success wasn’t for a lack of great deals from popular businesses showing up on our website. Rather, not many people knew about our website, or trusted this new company enough to buy vouchers from us.

Our owner’s and marketers’ solution was to expand our business to other cities, just like our competitors were doing in droves.

I didn’t think it would work, but in expanding, first to Tampa, we actually saw some real improvements in our numbers. The quick profits we saw were enough to encourage us even further. Soon after Tampa, we expanded to Atlanta. We didn’t have physical locations in those cities, but we had our sales team working their butts off to get our company’s name out there. We had one salesperson working out of Tampa, and our Orlando team worked the phones to get us some business in Atlanta, while still hustling locally. Our growth wasn’t huge, but it was enough to give us hope that we just might be able to make this work.

It was really exciting in the beginning: we saw our numbers jump, we finally had people signing up for our daily deal emails, and we saw a glimmer of the excitement we’d enjoyed back at the start of things. There was talk of hiring more people to churn out content, there was talk of hiring more salespeople, more marketers, more developers, more, more, more.

I mean, this is every business owner’s dream. Practically from day one, we think about what it’ll be like when we can grow our business. Out loud or in secret we plan for our inevitable expansion into new territories, of moving to new locations, of launching new product lines, and of conquering new horizons.

Expanding one’s business is supposed to be a good thing. It’s supposed to a sign of success, and certainly the result of it. But expanding too quickly can be incredibly risky for a small business. Our solution ended up being a part of our undoing.

In our case, “expanding” wasn’t even that big of a leap, financially. We didn’t need to plan a new campaign from scratch, we didn’t need additional office space, and we didn’t need a group of new hires to run a separate branch of our company.

It all looked pretty good on paper. But in all the excitement of moving into new areas, something was lost along the way. When it came to the deals we ran on our site, we began focusing on quantity over quality. This caused a number of problems. Sure, we were getting our company’s name out there, but as the quality of our content suffered, what was the message we were sending? And with all the new work we had to plan, organize, and execute, our systems—and the people who managed them—quickly became overwhelmed. The lines of communication within the company were in shambles, and we all found ourselves in way over our heads, but a little too late to do much about it.

To add insult to injury, what we later realized was that our Tampa profits were ridiculously short-term. We’d based this huge, risky decision on what turned out to be a trap. By moving on an ambitious plan prematurely, we didn’t have the long-term growth plan we needed in order to make it work in any of our locations, let alone all three.

The first round of layoffs was a surprise. With our profits having been so short-lived and our reserves running dry as we fought to gain control, our investors took the opportunity to cut us off and call it a day. The second round of layouts, which took out the rest of us, was both a blow to the head and a sigh of nauseated relief.

Time to Begin

It was an excruciating experience, and one that sticks with me years later. I still work in Orlando, this time at a company I co-own. And of course I think about what it’ll be like when we inevitably expand into new territories, conquer new horizons, and settle into new locations.

And when the time comes for my company to take that step, this time it won’t be a bitter end, but a powerful beginning.


About Author

Robin Karleskint

Robin Karleskint has worked at several new businesses, both as an owner and an employee. Currently she is a project manager at Cosmital Designs, a company she co-owns in Orlando, Florida.