Selecting a suitable property is directly involved with the cost of products. Main property you need for an agriculture business is a land, if you are going to start an agriculture farming business or building if you are thinking...
Regardless of the property type you have to consider below factors when selecting.
1. Distance to end market and raw materials – If you select a place that is so far from your market or raw material supply, you have to add extra transport cost and wastage cost to the production. Therefore it is recommended to minimize the distance from your market and raw material supply to your factory or farm.
2. Infrastructure availability - Main infrastructures you need for your business are Electricity, Transport and Water. Therefore when selecting a property you have to check whether these basic infrastructures are available or not. In addition to these, Telephone, Internet, Laboratories may be needed depending on your business nature. You have to check those required infrastructure availability too.
3. Surrounding Environment Condition – Surrounding area may be close to a protected area such as bird sanctuary, national park, etc. In this case you may have to adjust your business process according to the guidelines given by relevant authorities. Sometimes your property may be close to a rural village where poor people live; in this case you can have benefits by recruiting some cheap, unskilled labors.
4. Future Value of the Property – Most of the time value of the property increases with the time since the population grows and the demand increases. However there are some cases, which decrease your future value of the property. As an example, if any other business starts near to your property which emits some harmful gas, waste or smell, then your property value will be decrease with the time. Therefore better to get an idea about what is happening near your property. Anyway if you can gain some supernormal profit and recover your investment within short period, no need to worry about the property value.
5. Method of Acquiring – There are many ways to acquire the property you need such as Short term lease, Long term Lease, Purchasing, etc. That depends on your business plan. If you are planning long term business in that property, better to go for purchasing or long term lease (20 -30 Years). It will reduce future problems. In the other hand you can lease the property for short term purpose if you are not planning to continue the business in same place.
6. Distance to other support services – It is better if you can find a place where other support services also close by. Other services mean the Banks, Apartments, Supermarkets, Hospitals, and Governments offices. Your property value as well as your investments also will increase with all of these services.
It will be not easy to find a property which fulfills all the above factors. However you have to study all the above factors properly and select the optimum solution when selecting a property for the business. If you consider all of these factors, the property itself can generate good profit in future.