Why launch a new business in Kutztown, PA? The answer to that question can be boiled down to one thing: Location matters.
The location of a business is an important consideration when deciding where to open a new store. While factors such as population, number of small businesses, and existing infrastructure are important, a geographic location is still the single most influential factor.
In fact, a recent study by the National Association of Realtors (NAR) revealed that realtors have already begun moving more commercial property deals to urban areas. The study found that 68 percent of agents surveyed plan to expand into urban markets within the next three years, and that urban locations are more attractive to both buyers and sellers.
While the study didn’t break down the specific reasons why people are buying and selling in urban markets, it did identify the top five most appealing features of these locations: proximity to urban amenities, urban culture, access to major highways, access to transportation, and access to large markets.
With so many of these cities already established and popular, it makes sense that these locations would be appealing to buyers and sellers alike. After all, people are more likely to want to live near entertainment venues, job opportunities, and other amenities.
Even when you don’t have a location in mind, you should consider whether your business will be more successful in an urban setting. Here are five key ways that urban locations are different from rural and suburban ones.
1. People Live Here
While a location may be chosen based on the size of its population, that doesn’t mean that people living there will be receptive to your business. After all, there’s a reason why realtors call them “proximity” deals.
According to a 2014 study by the NAR, only about 30 percent of small business owners surveyed had an existing customer base in their community. This is in contrast to the 55 percent who reported having customers in their communities as consumers.
While the study also found that only about 16 percent of the respondents had an existing customer base in their industry, that number jumps to 33 percent when considering those who do business with an existing customer base.
In other words, if you’re planning on opening a business in a community where the majority of residents are unfamiliar with your brand, you’ll need to spend extra time building relationships with local businesses. This means taking the time to attend events, promote your business, and connect with other businesses.
2. People Do Business Here
One of the biggest differences between urban and rural communities is the number of small businesses that operate there.
For example, the U.S. Census Bureau reported that in 2015, there were almost 15 million businesses in Pennsylvania. That’s a lot of competition for small businesses, and it’s even more challenging to compete when you don’t have a physical presence in the area.
The NAR found that more than half of small business owners surveyed said they were concerned about competition. Of those, over half also stated that they thought that the biggest challenge they faced was gaining new customers.
While the majority of small business owners don’t actively seek to drive business to their competitors, the reality is that they are competing in a highly competitive market. In order to succeed, you’ll need to find ways to stand out from the crowd.
3. People Do Business With People
Even though the competition is fierce, people in urban communities tend to do more business with people in their neighborhoods.
This is largely because of the close relationship that exists between people living in urban areas.
A 2014 study by the Kauffman Foundation found that more than 90 percent of people surveyed in urban areas identified their neighbors as being important to their quality of life. This is in comparison to the 68 percent of respondents who said the same of their friends.
The study also showed that people are more likely to rely on their neighbors than their friends for emotional support. While the study didn’t provide any reasons for this, experts have suggested that the strong bonds among neighbors is a result of people having more limited social networks.
4. People Know Each Other
People in urban communities know each other, which means they are more likely to see each other at events.
A 2014 survey conducted by the Kauffman Foundation found that in urban areas, the majority of people reported spending more than three hours per week interacting with their neighbors. It also found that people in urban areas are more likely to participate in community activities, and that they are also more likely to volunteer for causes that impact their neighborhood.
5. People Take Care of Each Other
Even though people live in close proximity in urban areas, they are also more likely to take care of each other.
A 2014 study by the Pew Research Center found that people living in urban areas were more likely to help someone in need, and that they were also more likely to give money to causes that help others.
In fact, the study showed that they were also more likely to donate money to the church, the school, or the food bank.