How to Choose the Right Location for Business Expansion

Expansion decisions get made on three things: a broker's pitch, a site visit on a Thursday afternoon, and a spreadsheet built to justify a decision that was already made. None of them tell you whether the location works.

This is the practical version - what to look at, in what order, and how to turn it into a business case someone else can check.

What makes a location the right one?

A location is right when the demand around it matches what you sell, at a rent your unit economics can carry, without a competitor already absorbing that demand - and when you are legally allowed to trade there.

That is four separate tests. Most teams run one and a half of them. The failure mode is almost never "we picked a dead street." It is "we picked a busy street that was busy for someone else."

Busy is not the same as available. A street can carry heavy footfall and still be a bad site for your business category if that footfall already has somewhere to go.

The five signals that decide it

Every serious site decision reduces to five signals. Score them individually before you blend them into anything.

1. Demand (Footfall + Catchment)

Not area population - street-level passing volume, and how much of it matches your customer. A 40,000-person catchment is meaningless if your category sells to a segment that is 4% of it. Ask for the pass-by volume at the frontage, then ask what share of it plausibly buys what you sell.

2. Rent (Affordability)

Rent is only high or low relative to the exposure it buys. The usable metric is rent per passer-by per day. A €5,000 unit on a strong street can be better value than a €3,000 unit two streets over. Brokers rarely quote this because it invites comparison.

3. Competition

Count same-category operators, not total operators. A street with dozens of fashion units is hostile to another fashion unit and wide open for something the street does not yet serve. Saturation is category-specific, always.

4. Category gaps

The inverse of competition, and the most under-used signal. Where does demand exist with nothing serving it? In our Zaandam pilot we flagged unmet demand for boutique fitness around the city centre; within a year three operators opened inside that radius independently. Gaps are findable before they are obvious.

5. Permit fit

This one is binary and it goes first. Zoning determines what you can legally operate at an address. In one Haarlem analysis, a unit on a street with eight restaurants scored zero for food and beverage - not because of competition, but because the zoning blocked the use entirely. A five-year lease signed on that assumption commits real money before a single customer walks in.

Check permit fit first. It cannot be compensated for by a strong score anywhere else.

How do you build the business case for a new location?

A business case that survives scrutiny is not a narrative. It is a comparison of named candidates against the same criteria, with the weights written down before the scores are filled in.

A workable structure:

Fill it in for at least three candidates. One candidate is not a decision - it is a preference with a document attached. The weights matter less than the discipline of setting them first and applying them to every site the same way.

How do you compare two candidate locations?

Score them for the same business category, on the same date, with the same inputs. The output you want is not "which feels better" but "where do they diverge, and does that divergence matter to us."

Two units on the same street can score very differently. In our Dutch pilots, neighbouring stretches of the same city centre showed capture rates of 42% versus 31% - the difference between a viable unit and an unviable one, at the same rent.

And the same address scores differently per category. A unit can be strong for home and living and weak for fashion. If your comparison does not name the category, it is not a comparison.

Common ways operators get this wrong

• Using area data for a unit decision. Neighbourhood averages hide the only variation that matters.
• Treating footfall as the whole answer. Volume without category fit is expensive exposure.
• Checking zoning last. By then the lease is drafted and the sunk cost argues for itself.
• Comparing one site to nothing. Without alternatives there is no benchmark for "good".
• Re-deciding from scratch each time. Without a repeatable method, every rollout restarts the argument.

Turning it into a repeatable process

The point of a framework is that the fifth location takes less effort than the first. Fix the criteria, fix the weights, score every candidate the same way, and keep the reasoning attached to the score so anyone can audit it later.

That is what Shareloc does with street-level data: score, check, compare, explain - for any address, per business category, with the factors visible.

Sector specifics differ. See retail site selection, hospitality expansion, fitness expansion and commercial real estate. For the longer retail-specific version, read the 7-factor framework.