Factors to consider when choosing a business location in Nevada
Business location matters! You may have a great business idea and are planning to launch the most innovative product or service but if you are unable to choose a business location in Nevada that can target the intended audience then the startup may not generate the required profits. This is exactly why you need to have a business location strategy or a business location analysis. Let us look at some of the factors to consider when choosing a business location in Nevada.
Style of Business Operation
This is one of the best ways to choose a business location as the style of business essentially refers to the type of business activity. Some of the most common styles of business include:
- Service business: If you start a business in Nevada in the service industry then it will revolve around providing customers with mostly intangible goods like consultation, transportation, repair, accountancy, home improvements etc.
- Hospitality Industry business: This is a huge industry and your startup can be in any segment of the industry like restaurants, travel agencies, hotels, inns, event management, catering, motorway services, takeaways, and much more. The segment will be the determinant of business location.
- Merchandising business: If you start a business in Nevada in the merchandising industry then it will involve selling of tangible goods. Merchandising businesses can be either retailer or wholesaler classifications and the business location strategy will be different for retailers and wholesalers.
- Manufacturing Industry: You need to choose a business location in Nevada to set up a manufacturing facility. The space will be dependent on the type of manufacturing, staff employed, and equipment. Such businesses normally take advantage of Foreign Trade Zones (FTZ) as locating businesses in such zones offer such businesses many tax based and other incentives.
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Accessibility and Convenience
One of the most important business location factors is accessibility and convenience. Accessibility and convenience is also determined by the type of business activity. For example, a restaurant in a business district will be highly accessible and convenient for the long-term and walk-in customers while a retail store should be in a location where heavy footfall will not be a problem and it will be accessible by all modes of transportation. When you start a business in Nevada, location is considered as a highly competitive factor especially if your business is in the service or retailing industry.
At the same time, it is important to understand that high-traffic and convenient locations are prime real estate and hence highly costly. So, the best way to choose a business location is by conducting research on location convenience while keeping the cost factors in mind.
Proximity to your competition can actually make or break your business and hence it is one of the key business location factors. Competition has both advantages and disadvantages but it mainly prepares your business in a way that you are able to focus clearly on your core audience. When you choose a business location in Nevada, it pays to be one step ahead of your competition especially if they are situated in the same vicinity because they can affect your overall operating costs as well as sales. For example: If you have chosen to establish your business in a populous area then the probability of competition is higher but then so is the probability of getting more customers. If you want to stay away from competitors then you need to ensure your location is not too far away from your target audience.
Business expenses can be overwhelming at times and hence a strong business location strategy will be helpful in ensuring certain unnecessary location expenses are curtailed. If you choose a business location in Nevada that is prime or real estate then the rent will be much higher as opposed to commercial property in other areas. Let’s look at an example:
If you are planning to start a business in Las Vegas, Nevada then lease on commercial space can vary from $14.4/Sq Ft per year in Renaissance Drive, Paradise, Las Vegas to $35.4/Sqft per year in Downtown Las Vegas. Small office spaces can vary on the lease rates from $6 – $28/Sq Ft per year.
Apart from lease payment, you will also be required to pay utility bills and taxes in your chosen area. The bottom line is that you don’t want to start your new business with high expenses.
Availability of Talent
One of the important business location factors is talent or employees. Most small to medium sized startups will require employees initially and hence, you need to ask yourself: Am I choosing a business location that will enable me to find good talent?
Demographics play a key role in business location and two different aspects of demographics that will drive your business location strategy are customers and employees. If you start a business in Nevada and your perceived customer base is local then employees can be selected from the local community as they will play a strong role in generating customer loyalty. Simultaneously, you need to also focus on the skills that your work force will require. Some of the questions that you need to ask and address are:
- What skills do your prospective employees need?
- Can you find people with required skills or talents in the chosen location or community? Once you choose a business location in Nevada, you need to find out if there is sufficient housing available for employees in a price range they can afford
- Are affordable public transportation options available for your employees to bring them to the place of work?
Local zoning ordinance
Sometimes, you will not be able to choose a business location in Nevada that addresses your specific needs due to zoning laws. According to the laws some areas may be defined as strictly residential and hence any commercial activities from such premises would be deemed as illegal. The zoning code will be different for different states and can be viewed under the Unified Development Code for the city of Las Vegas, Nevada. The best way to choose a business location is by following the local zoning code and finding out which are the best locations for your type of business. The zoning code may also include information pertaining to subdivision regulations, landscaping, signage, urban design, and basic architectural standards.
State and Local taxes
Nevada has the distinction of being the state with the 2nd-highest rate of startups or new business owners in the nation. If you are planning to start a business in Nevada, one of the important requirements is state and local taxes. It is a known fact that state and local taxes paid by new businesses each year can have a significant impact on the bottom line of the business but at the same time, these taxes also have a positive influence on economic growth and employment. Nevada does not have corporate income tax but it does have gross receipts taxes. To ensure tax compliance, you will be required to apply for a unique 10-digit ID called the Taxpayer ID. It is assigned to a new business entity by the Nevada Department of Taxation and you can find information pertaining to taxation requirements with the help of this informative guide to Nevada business taxes.
One of the important business location factors is good infrastructure. Infrastructure consists of transportation available for customers, staff, and delivery or receipt of goods, banks and ATM, parking space, and the building itself where your office or retail outlet will be located. These important components of a business infrastructure can be beneficial to any business in determining long-term sustainability. It is always recommended to choose a business location in Nevada that has good road connections, proper power and water supply, special access for people with disabilities, and parking place for employees.
State and Local Government Incentives
One of the reasons for Nevada being such a popular destination for entrepreneurs is the availability of numerous state and local government incentives especially for startups or new businesses. If you start a business in Nevada, your business will be able to benefit from local government incentives offered by the Governor’s Office of Economic Development (GOED). These business incentives include sales tax abatements and deferral on capital equipment purchases, abatements on modified business tax (MBT), and employee training grants among others. In fact, one of the best ways to choose a business location and enjoy incentives is through locating your business in the Opportunity Zones and the Foreign-Trade Zones (FTZ). You can find detailed information on various business incentives on our Nevada Page.
Federal government incentives
There is a long list of state and local government incentives that your business can benefit from and that is not all; there are Federal incentives as well. These incentive programs are offered by the U.S. federal government that can vary from general workforce development to industry-specific incentives and energy efficiency grants. The federal incentive programs are offered by different federal agencies like U.S. Trade and Development Agency (USTDA), Export-Import Bank of the United States (EXIM), Overseas Private Investment Corporation (OPIC), U.S. Department of Agriculture (USDA) and the Office of Textiles and Apparel (OTEXA) among others. If you choose your business location in Nevada then you can take advantage of the following federal incentive programs: