When it comes to opening a new community, you can have the most exceptional staff, stunning apartments, luxury amenities – and all of this at an affordable rate – but if you chose to root your business in a bad location, you’re doomed to fail regardless.
Throughout our market research series, we’ve taken a look at the various ways market research can help you as you start, expand or change your business. If you’re looking to start a brand new community in an untapped market, however, market research is about to become your new best friend.
“When done well, market research can reveal the upsides and downsides of putting your business in a particular location, both on a macro and micro level,” says Malissa Illiano, Senior Consultant & Director of Market Research at Sage Age Strategies. “Opening a brand new community is a huge investment in time and energy, not to mention money and resources. That’s why it’s important to know you’re putting your community in the right place before you move any further along in the process.”
Before we explore what market research can tell you about where your community should be located, let’s talk about why location is so important in the first place!
Why Location Matters so Much
There’s a reason we’re all familiar with the phrase, “Location, location, location!” It matters! Not just for your prospective residents, but for you, the one who chooses where to put your community in the first place. Why? Well…
- You need to be close to your target market. Sometimes, finding a location in a city you’re interested in developing in is easier said than done. When picking a location, it’s essential that you find one in the area of a city that is highly concentrated with your target audience/market. Depending on the market, moving to “the other side of the city” might not be appealing and you will need to rely on attracting primarily those seniors that live closer to your location.
- You need to be accessible. We’ll talk about determining demand for your product in a moment, but before you consider that, consider the accessibility needs at your community. For most communities, having a location that is highly visible and accessible is extremely important.
- You need to know your competition. Putting down roots in a community means entering into an already-existing space, a space that might have competitors. Your location – both in a macro sense of the larger community you chose to plant roots and in a micro sense of the proximity to your competition – plays a huge role in what segment of the market you’ll be able to tap into, and what segments will be more likely to go to your competitors.
What Market Research Can Tell Us
If this location fits with your brand and image. If you’re a new community with no previous locations or image to uphold, no worries here! But if you have a specific brand and image that is already “out there,” you need to make sure your chosen location is congruent with the image you want to portray.
How safe your potential location is. Safety is a huge concern in the senior living industry. Market research can reveal information on emergency services, crime rates, response rates and other related data that can give you deeper insight into the nature of a community.
Local labor availability. Running a community requires the efforts of a lot of people. Does the location you’re looking at have the skilled talent – especially skilled medical talent – you need to staff your community? Market research can figure it out for you!
What future growth opportunities might be available. If you have long-term goals for your community that include a possible expansion, market research can give insight into whether or not your chosen location has the ability to support your desired growth.
Who your competition is. As mentioned, evaluating the competition is a huge part of choosing a potential location. And, just because a location may not appear to have any direct competition, does not mean that’s an ideal spot for your business. Market research can reveal the successes and failures of similar communities, and how market growth or lack thereof could either support or thwart your future plans.
If you can afford the cost of marketing and advertising. “Build it and they will come” doesn’t really work when it comes to a well-thought-out marketing plan. You need to advertise in order to get the word out, and different communities have different costs and availability when it comes to advertising. Market research can reveal what costs you might expect to incur when marketing your new community.
Location, for many, is the single most important consideration when it comes to opening a new business. Market research can help you ensure you’re setting yourself up for success in your new neighborhood.