Beautiful caucasian woman is sitting at the bench in a city park with a laptop connected to wi-fi. Entrepreneur is working on a portable computer while sitting outdoors on a blurred urban background.

Starting a new business involves many critical decisions. You have to consider how clients will interact with you and how to reach your customer base best. Some businesses must be located in close physical proximity to customers. Others can use technology to reach consumers wherever they are. Picking the wrong location will increase your overhead without improving your customer service. In terms of location, many startups must decide between an urban or rural setting.

Big City

For decades, big cities have been the hub of the business world. It was assumed that if you wanted to find the strongest talent and make the best connections, you needed to be in the city. Some entrepreneurs choose the city simply because they love everything an urban setting can offer. In addition to being close to clients, they enjoy the fact that they are close to sports, entertainment and cultural events. However, running a business in the city is an expensive proposition. Real estate is at a premium, so a physical location will be a major expense. Typically, cities also have a higher cost of living, so employees will expect to receive a higher wage. If you are starting your new business in an urban setting, you need to be aware that it may take a long time for you to make a profit.

Rural Locations

Many new businesses rule out a rural setting before giving it a second thought. They feel that the distance from clients makes the location unsuitable. However, modern technology has changed the way businesses work. If you do not need a brick and mortar point-of-sale location, you can make the most of your connections with clients through online resources. In several states, governments are actively seeking to encourage companies to locate in rural areas, offering tax breaks to companies that choose a rural setting. Some commercial loans apply in select rural locations with the goal of invigorating smaller communities. Many small towns have less stringent building codes, making it easier for your business to expand. In addition, the cost of living is lower, which encourages new employees to sign on at a lower salary. These kinds of savings are very important as you are getting started.

As a business owner, you have to decide which type of location will work best for your new endeavor. While a city location may be necessary for some, a rural location has advantages. Starting in a small town may give you a step up in reaching your first profitable year.

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