How to Build a Business in an Economically Depressed Area
Even under the best circumstances, starting a business is not easy. Building a business in an economically depressed area is even more difficult. If you are determined to take a risk and bring a business to an area that desperately needs it, here are some factors you need to consider in order to achieve that dream.
The Nature of the Business
First things first: What do you want to bring to the neighborhood? Of course, you want your business to be a success, but it also has to be something you enjoy being involved with. Some great neighborhood businesses that thrive in lower-income environments include:
- Nail salons
- Corner stores
- Gas stations
- Well-known franchises (including those with minority franchise opportunities)
- Dry cleaners
- Consignment shops
Location Is Everything
You may know what general area you want to be in, but the specific physical location is important. What is the parking situation like? Can people easily park and get into your location? If they must park far away, are there other businesses nearby that make getting out and walking more attractive? You want your location to be as convenient as possible.
What else is near your location? In many cases, you want to opt to be near other successful businesses in hope you attract some of their customer base while they are visiting. However, these opportunities can be limited in an economically depressed neighborhood.
So, the next thing to consider is, where is the safest foot traffic? While building a business in a low-income area can pay off for entrepreneurs, you don’t want to set up shop where there’s high street crime that would put potential customers in danger. Do whatever you can to create a safe environment.
Also, consider the square footage. Is it enough to realistically cater to your customer base? If you are working with a franchise, does it meet their expectations in the contract? At times, you may need to make certain compromises on physical location in order to satisfy your contractual agreement.
Secure Your Funding
Obtaining business funding is extremely important for your long-term success. The key is to be sure you have fantastic business loan and a clear picture of what you want. Some loans will be denied based on where you want to build your business.
Lenders have to see a viability in lending you the money. They are going to be gun shy if they think it may fail, and many will assume it fails because of the location. But keep pushing forward; with the right business plan, you’ll find a lender who sees your business as a viable venture and supports you on the way.
Lock Down the Licenses
Many cities require business licensing and approvals of businesses proposed for the area. When applying for these approvals, emphasize why you want to turn around the area with a sound business that people can get excited about.
The more they can see the value of what it is you are trying to do, the more the city can try to help you with the task at hand. Licensure is easy to obtain – getting community support is the added bonus that will help you and help others.
Whether you live in an economically depressed area or live near one, there are plenty of opportunities to make a successful business. Some of the most inspiring business success stories feature the average person just trying to make a living and making a difference after stumbling upon the right formula for a local business. If you care enough to turn your neighborhood around, you already have the right mindset for business success.