MICROLOCATION: FACTORS, WHAT IT IS FOR AND EXAMPLES - DUDAS - 2025

The microlocation of a project or company is the specific location, within a macro zone of greater scope, where a company or project will definitely settle. There is a saying that the three most important considerations in business are location, location, and location.

If you are starting a new business, choosing the right location is essential; you want to be close to customers. One of the most common reasons an entrepreneur chooses a business location is because they saw a "vacancy" ad.

However, choosing the wrong location may not be entirely the cause of business failure, but it can contribute to potential customers being unable to communicate with your business and inefficient service.

Basically, you want to answer two questions: "why here?" and "How can I be successful here?" These two questions should be answered during the analysis to be carried out for the selection of the site.

Factors

The microlocation factors of a project or company consist of the main advantages that are sought by companies to choose their location. In this sense, for microlocation the following factors must be taken into account:

Questions to ask

If your business is a merchant, you should start answering these questions to better understand the requirements of microlocation.

- Where will the business be located? Will the selected area be convenient for your clients?

- Will customers have free parking or will they have to pay?

- Will the location have pedestrian and vehicular traffic (quality / quantity)?

- Is this location accessible to inbound and / or outbound chargers?

- Will the location allow or support your business hours?

- Is the location compatible with the image of the business?

- In what way does the surrounding commercial area bring advantages to the business? Are there aspects in which the commercial area would prevent clients from contacting you?

- What is the rental cost (and / or monthly expenses)? Will lease improvements be needed?

- Will there be enough manpower to hire if additional staff is needed?

- If you plan to expand the company in the future, is there enough space to grow in this location?

Determination of the land of the company

In any case, the usable area must cover the area of ​​land required for the project itself and future expansions.

When a project is expensive and / or large, it is more convenient to have expansion areas than to relocate the plant. For example, a factory where the foundations for heavy machinery are very expensive.

A land located within an industrial zone has assured the strategic position and infrastructure for its proper operation.

Services around the field

Convenient adjoining facilities and lines of communication can bridge price discrepancies between possible options. It can generate savings in construction and operation.

It is convenient to check the existence of infrastructure projects near the land, such as residential areas, medical services, public security and education, since they can favor the project.

It is also essential to verify electrical energy, availability of water, telephone service, gas and other services, characteristics of wastewater and types of drainage, volume of gases, waste and other pollutants, conditions of urban roads and highways, garbage and waste collection..

Selection of the optimal alternative

It is not common to find a land that meets each of the specific needs of an industrial project. To decide the final location it is necessary to evaluate the places that are considered advantageous, comparing them with each other.

One form of evaluation is to compare the investments and operating costs that would be incurred in each line.

What is it for?

The purpose of microlocation of a project or company is to select the community and the specific site to establish a project, be it an office, store or industrial plant, being this place the one that will allow meeting the objectives of producing with a minimum unit cost or achieve the highest profitability of the business.

The exact place is chosen, within a macro zone, where the business or company will definitely be located.

It should be stipulated whether the location should be in an urban area, in an industrial suburb or in a rural location. Once the location area or population has been defined (macro-location), the most convenient terrain for the final location of the project is determined.

The microlocation of a project or company combines aspects related to human settlements, identification of productive activities and determination of development centers. Select and precisely delimit the areas in which the project will be located and operate within the macro zone.

Aspects to take into account

- Highlight the strategies that can be used to access the area's workforce as the business grows. A good indicator is the presence of similar companies, which provides the opportunity to hire qualified employees.

- Find competitors in the same area, or in an area with similar demographics, and identify what they are doing to be successful.

- Avoid choosing a new location just because you have a cheap rent. Signing such a commercial lease could spell disaster for your business, because you may not have access to the clientele and manpower you need to be successful.

Examples

First example

The factors that were considered to decide where the project of a typical food restaurant was to be installed in the city of Cagua were the following in terms of microlocation:

The first thing that was considered is that the property is already in the city of Cagua. In addition, a review of the environment was carried out to corroborate that there were no undesirable neighbors that could affect the use of the service offered and what type of anchor business is near the project.

As an anchor business, the cabins of La Florida were taken, which are presented as an opportunity for the typical food restaurant because the situation may arise that the guests of the cabins feel interest in the menu of typical foods offered.

Location

5th Avenue with 50th Street, downtown Cagua.

Price-quality ratio of the land

Investor property.

Environment review

No undesirable neighbors were detected.

Business anchors

Cabins and camping of La Florida and the camping of the city of Turmero.

Analysis of the urban structure

In the city of Cagua, where the tourist circulates the most is in the downtown sector of the city, since there are more businesses there.

Second example

Another example of microlocation is the following evaluation format:

References

1. Juan Carlos (2013). Micro location and macro location. Blogspot. Taken from: cuadromicroymacrolocalizacion.blogspot.com.
2. Delicias Puntanas Typical food restaurant (2018). Macro and Micro location of the Project. Taken from: sites.google.com.
3. garduñogu.mx (2012). Macro-location and Micro-location. National Pedagogical University. Taken from: garduno-elaboracion-de-proyectos.blogspot.com.
4. Team of collaborators and professionals of the ARQHYS.com magazine (2011). What is a microlocation? ARQHYS Magazine. Taken from: arqhys.com.
5. Khera (2018). Business Location Analysis Example - Site Selection in Business Plan. More Business. Taken from: morebusiness.com.
6. Iowa Vocational Rehabilitation Services (2018). A General Guide to Conducting a Business Feasibility Assessment / Study. Taken from: ivrs.iowa.gov.