Entrepreneurs Seek Internet Speeds Over Talent Pool When Choosing Business Location
- Written by Brad Stevens, General Manager of Marketing at Reckon
Launching and sustaining a small business is no easy feat. Small business owners must conduct appropriate planning before launch to increase their success and chances of survival. One vital part of this process is choosing where to establish their enterprise.
While the ideal location varies by industry, certain factors are universal. These include the availability of a talented workforce, manageable operational costs, internet infrastructure, and the broader local business landscape.
Since so much success is based on location, Reckon surveyed over 800 small business owners to discover which factors are pivotal when choosing where to start their business.
Small business owners prioritise internet speeds
Reckon’s research discovered internet speeds were the most important consideration for small business owners when determining their business location. Among the 18 factors analysed across four key categories – internet speeds, cost of living, business landscape and talent pool – download speeds ranked number one in importance. Following closely were upload speeds and latency. In an era where business depends on digital technology and remote work is the norm, a robust internet connection is vital. It’s no surprise business owners prioritise this factor when choosing where to start a new enterprise.
Internet speeds shouldn’t be considered in isolation
Cost efficiency is also very important for small business owners, ranking behind internet speeds in their wish list. Starting a business is expensive, and with a third of all businesses failing after four years, running costs must be as low as possible to increase the likelihood of survival. This explains why businesses highlighted the importance of aspects such as affordable rent, mortgages, and commute costs.
The third most important consideration for small business owners was the business landscape. Factors such as long-term and short-term survival rate, business density, and annual change in small business numbers emerged among the top 10 most important factors for business location. These metrics provide crucial insights into competition, market health, and adaptability, all key elements for sustainable growth. These insights help new businesses predict their success and how sustainable the location is for survival.
Talent pool lacks importance for small businesses
The talent pool was the least important category for business owners. Out of the talent pool factors analysed, the long-term health of the talent pool was the most significant factor for businesses. Meanwhile, the availability of young workers was the least important factor, both within this category and overall.
Although identified as the least important category, it's essential to note that the talent pool remains significant for small business owners; other factors simply carry greater weight when choosing a location to set up shop. Talent pool is likely to be seen as less important due to the rise of remote working, meaning excellent talent can now be sourced globally. However, the local talent pool could be an underrated aspect of where to start a business. A business’s team is vital to the success of a business. If you have a good team, they'll take you where you want to go, but a business can't go anywhere without a good team. Having a high-quality team in the location of your business can be extremely beneficial for team bonding, enhanced communication, fostering a collaborative environment, instant feedback and building a strong culture and values, all aspects that will increase your chance of success.
Where is the best place to start a business?
Our research also analysed how well 50 of Australia’s largest cities scored on each factor, weighted based on their importance to small businesses. Geelong, Victoria, was named the best place to start a business in Australia, followed by Ballarat and Melbourne. Melbourne was the only capital to be featured in the top five, with Shepparton (VIC) and Toowoomba (QLD) ranking in fourth and fifth place, respectively.
Based on Reckon’s research, some surprising cities may offer the best environments for startup prosperity. Regional cities like Geelong and Toowoomba beating capitals like Sydney shows that a higher cost of living could create barriers to profits and growth.
Large cities like Melbourne still hold promise for small business owners. However, changes in how businesses work globally, along with good internet and the ability to work remotely, mean new businesses can open in locations with lower associated costs.
Successful startups often need a mix of good business conditions, so picking the right location is key. As a new entrepreneur, it might be worth considering smaller places with solid business support and lower living expenses to make starting up easier. However, it’s important not to overlook the talent pool, as building a great team can help a business take off. It’s also extremely disappointing that in 2024, internet speeds are still an issue for Australians, particularly in regional areas. The government and larger organisations such as Telstra need to do more to improve fast internet access across the country to encourage prospective small business owners to launch in their local area.
So, if you’re an aspiring entrepreneur, it may be time to ask yourself, “Should I be looking to broaden my geographical horizons?
To view the full report and find out the best locations to start a business, please visit: https://www.reckon.com/au/small-business-resources/startup-cities/
