Risks – Business Location and Premises
The physical location of a business needs to provide ready access to its customers, be they retail trade or other businesses. Access by road and rail, parking, if necessary, footpaths, corridors, door width and height are all influences on business sales. Access by suppliers, distributors and services do likewise.
Neighbouring businesses can also limit or add to a business location. ‘Pulling power’ of an area is a case in point. Shopping Centres are a classic example where there are lots of retail businesses co-located. The same can be said in commercial and industrial precincts.
The premises, itself, should be laid out to maximise efficiency and profitability. Well presented, neat, clean and tidy premises are far more appealing and supportive of profitability. This is irrespective of whether they are retail shops, wholesale and distribution businesses, repair and servicing businesses, construction, or manufacturing or fabrication operations.
Room to grow is important. There is only so much profit that can be generated out of the physical size of the premises. Limited space restricts growth prospects, in turn, limiting future profitability.
Access to services, power, water, communications, parking etc., are also considerations. Risks to services pose risks to profitability. Power communications failures are obvious examples.
Business owners should look at the physical location of their business and its premises with a view to how the physical features and other characteristics they possess can impact on the profitability of the business into the future. Where there are physical restrictions, or uncertainties, then those risks will create uncertainty in future profitability and impact business value accordingly.