Sunday, December 9, 2012

Entrepreneurship: Why it may be time to relocate

When launching a new business, many entrepreneurs opt to stay local. Moving to a new location is rarely considered, which is understandable.  There is comfort in the tried and true, and remaining put eliminates at least some of the risks of running a business. Or at least we hope so. This is more true for women than men, the latter who are more likely to move individually or the entire family to pursue a business goal.

The Global Entrepreneurship Monitor, released in 2011, reveals basically what we've suspected all along: women are more risk-averse, which explains why entrepreneurship is more male-saturated. Women are also less likely to network, or consider investing in tech or expensive businesses. 

There is a reason for this, of course. Women are more likely to consider the impact of a move on the family. If children are involved, uprooting the family to pursue their dream jobs seems foolish. If their new income is to pay for personal expenses, they eventually open a business to expand on a hobby or to earn additional income. In other words, their business goals remain incidental, and not part of an elaborate career change. Moving across borders to find the ideal location is a waste of time and energy.

But there are benefits to relocating. First, the type of business you're in may not be compatible with the existing market. In regions where strip malls are prevalent, retailers not offering a product that is either unique or carrying an exclusive brand name will not survive. Same goes for restaurants. Consumers living in a particular region have grown accustomed to a specific type of offering, which is not necessarily a family restaurant. In the example of strip malls found in suburbs,  food franchises reign.

But most women who try their hand at running their own business begin by offering a personal brand that needs exposure. This product may have grown out of a hobby or a learned specialty. Unless there is access to a large marketing budget, a storefront in a large city that attracts scores of walking pedestrians will help get that exposure.

There are similar examples to get this point across. In my suburb, a creative childcare service was introduced: babysitting by the hour. Moms dropped their kids off for an unrestricted amount of time and paid whenever they picked up the children. A fantastic idea, but the region is robust with churches offering full and part-time childcare services. And a high percentage of families are church-oriented, so there was no demand for this new place. Within two years, the owner closed shop.

Her business plan would have been more successful in a market with a need for these services.

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