Inappropriate location can doom your business. Unfortunately, not many businesses give location much consideration before setting up shop.

“It’s the last thing they think about,” notes Jerry Neitlich, of IN/House Corporate Real Estate in Irvine, Calif. “Most people have absolutely no clue about the complexities… They drive around and see a sign and call the number not realizing [the sales broker] represents the landlord.”

“Can companies fail because of their real estate? Absolutely,” says Neitlich.

Neitlich says location selection is often delegated to staffers lacking expertise, such as purchasing managers, because it involves paying for space.

“We did a study with the University of California Irvine grad school of business management on how to help small businesses manage their real estate,” Neitlich says. “We found in most companies, every five years the president goes on a shopping spree and has no idea what he’s doing … It’s the second largest line item on the budget and the least paid attention to.”

Neitlich says businesses should consider several factors to avoid paying for unnecessary amenities or retarding operations. Always consider what is important for your specific business, such as:

• Do you require convenient freeway access?

• Do employees live nearby, or will their commute be burdensome?

• Do employees telecommute and only infrequently visit the office?

• Must you accommodate high-volume customer traffic?

• Does your image require a high-profile swank ambiance, or can you do without glitz?

• Do deliveries or shipping necessitate large vehicle access?

• Will the location generate potential walk-in traffic from neighboring businesses?

• Is parking adequate, and can more be added later at reasonable expense?

• Are lease terms punitive if you later need landlord improvements to accommodate growth?