The choice of the correct location can be crucial for the success of a company.
The location or good infrastructure, such as road access or parking spaces, plays a large role for trading businesses. For technology-oriented start-ups, the proximity to potential customers and/or potentially highly-qualified staff in the catchment area is more important. One of the most important criteria is the costs. If you save at the wrong end, an unfavourable location could actually cost you lots of time and money in the long run.
It makes sense therefore to carry out a location analysis during the start-up phase. Consider what location factors are important for your business objectives. It is difficult to make a decision on the location without having exact knowledge of the market and consumer behaviour. Market research measures carried out in advance could help you with the decision.
Mostly you can select from several locations. Compare them to each other using objective criteria.
Tip: Think about how to use synergy effects, e.g. through the technology and start-up centres in the regions and local authorities. The local business development agencies can give you information whether such a centre exists in your town or municipality.
Alongside these centres, business development agencies at the local authorities, real estate agents, property management agencies or property developers could also help in your search for a location. Furthermore, a network of companies in the form of a cluster could strengthen each other.
Include the following location factors into your considerations:
Must your location be central or can it be located on the outskirts of the town or even completely outside a town or a built-up area? The more freedom you have in choosing your business location, the better is your chance of responding to the favourable conditions of a region. A good transport infrastructure, low trade tax, start-up grant programs run by local authorities, good properties or favourable commercial rents – these are the factors which could facilitate new business start-ups.
- Real estate
The size and quality of your prospective premises will be influenced amongst other things by the amount of real estate costs, the "assessment rate" of the trade tax, waste disposal costs, energy prices and noise regulations. You might possibly have to comply with safety requirements and accident prevention precautions. Check in advance whether you will be able to extend the premises if required.
- Official requirements
There are many commercial and building laws and provisions. Therefore contact the relevant building planning authorities in your municipality (Gemeinde, "Baurechtsplanungsamt") to see how the proposed plot of land/property/rental property is shown on the land-use plan. If the proposed location is in a commercial or industrial zone, there will normally be no objection to the relocation under planning law provisions. If, on the other hand, the proposed location is in a residential or mixed zone, you should carefully examine the planned location
- Proximity to customers
Will you deliver to your customers or will they come to you? Are you dependent on passing trade?
- The competition
Does the local competition play a role in your business plan? If so, how strong is the competition?
- Transport infrastructure
Is it easy for customers, suppliers and employees to come to you? Do you need access to an airport, rail or motorways? Are there enough parking spaces?
How are you supplied with raw materials, goods, consumables, energy?
Will you be able to find suitable manpower in the vicinity? Is the location attractive for specialists and executive personnel who will have to be recruited from other areas? What cultural attractions are offered by the location and is there a wide range of recreational activities?
How high are the costs for the acquisition, rent and incidental expenses, e.g. for furnishings and fittings, infrastructure, official requirements? Are public funds available?
- Technology and start-up centres
Technology and start-up centres offer a great deal of benefits in terms of infrastructure. Are there such centres in your desired location? Are you able to settle there?
What public and private advisory services exist? Are there any institutions of higher education with which you could have an information exchange or other form of cooperation?
Tip: The business development agencies for the urban and rural districts and also the regional and communal development agencies can help you to find a location. They will also help you to find the relevant contact persons at the business development centres and the administrative authorities.
The Chambers of Industry and Commerce in Baden-Württemberg have set up a location and company information system where you can find up-to-date offers for industrial real estate.
The German original version of this text was drafted in close cooperation with the relevant departments. The Wirtschaftsministerium released it on 23.09.2019. Only the German text is legally binding. The Federal State does not assume any liability for the translated texts.
In cases of doubt or if you have any questions or problems, please contact the relevant authorities directly.