Choosing a location is one of the key factors in the success of the offline business: a mistake at this stage can cost months of downtime and loss of investment. In the context of the rapid growth of rental rates (in 2025 – up to 12,500-13,000 rubles/sq. m per year, 40-45% higher than the level of 2023) entrepreneurs are moving from intuitive solutions to analytical ones. If earlier the premises were chosen according to the principle “the more traffic, the better,” today this method is outdated: the behavior of the townspeople is changing, and the “traffic” itself no longer guarantees profit. Context comes to the fore – who these people are, where and why they go, what they buy and how much they are willing to spend.
From traffic to context: a comprehensive approach to location assessment
Previously, the choice of a small business location was based on the traditional method: personal inspection, map analysis and pedestrian traffic surveillance. With the development of technology, subjective assessments have been replaced by a data-driven approach based on geoanalytics and big data. Simply put, instead of relying on “feeling,” assumptions, or HiPPO (Highest Paid Person’s Opinion) intuitive approach, the business collects, analyzes, and uses specific data to:
- forecast customer behavior;
- process optimization
- select strategies and locations;
- minimize the risks of errors.
Today, entrepreneurs use integrated platforms such as BST Organica, VK Data, Ozon GeoAnalytics, Tinkoff Geodata, which collect and aggregate information from several sources at once – from telecom operators to banks and OFDs (fiscal data operators). This data allows not only to measure the flow of people, but also to understand who these people are, what they are interested in, where they live, where they work and how they spend money.
For example, platforms analyze:
- age groups and socio-demographic composition of visitors;
- their behavior during the day (they work during the day, live at night);
- intensity of purchasing activity according to OFD and banking transactions;
- real walking routes – from which side of the house or street people walk more often, where they cut the path, which crossings they use;
- density of residential development and the number of educational institutions within a radius;
- the aggregate index of “retail intensity” is an indicator where people actually make more purchases.
All this allows the entrepreneur to assess the quality of the audience, and not just its number. Therefore, a location with 10 thousand passers-by per day can be unprofitable if most of them are not a target group (for example, students, if the business is designed for a working audience of 30+).
In addition, machine learning algorithms in such systems are able to predict the expected revenue of a new point based on revenue data from other branches of the company. This turns the choice of room from a “guessing game” into an almost mathematically calculated solution.
Myths about locations: why high passability does not guarantee success
One of the most common misconceptions is the belief that high traffic automatically guarantees high profits. In practice, it is not the number of people that matters, but how much this traffic is targeted. For a coffee shop, store or studio, it is important that potential customers are nearby – people of the right age group, with suitable habits and interests.
Even a room near the metro with excellent visibility may not bring results if the audience of the location does not coincide with the format of the business. For example, a coffee shop with original drinks and aesthetic design is unlikely to be comfortable adjacent to a fast food outlet – smells, noise and other contingent create dissonance and scare away customers. This principle works in the opposite direction: a mass format next to a premium coffee shop or boutique can cause complaints and conflicts with the landlord.
A vivid example demonstrates the analysis of the Colizeum esports arena network in Moscow. At first glance, high-traffic points seemed profitable, but a detailed study showed that success depends precisely on the quality and relevance of traffic. To assess the locations, the company used a platform based on geodata and AI, which took into account the density of housing, the proximity of schools, universities, new buildings and other factors. The system analyzed the data of already operating clubs, identified patterns and predicted the potential revenue of new points – taking into account competition, market employment and the optimal format of areas.
Conclusion: not only the number of people is important, but also who these people are and what kind of atmosphere is around. The mismatch of the contingent can completely negate the advantages of even the passage location itself.
The second myth: lack of competitors as an advantage. Many believe that the lack of neighbors automatically ensures the flow of customers, but in practice, this often leads to the opposite effect. Especially in large cities, the lack of competitors may mean that the area simply does not have the right audience. Sometimes even opening next to a competitor can be more profitable, especially if its level of service and quality are not ideal, as this allows to attract a target audience.
The third myth: shopping centers are the best location to open. Previously, large shopping centers were considered an ideal place for business: people came there every weekend, made purchases, visited food courts and cinemas. Today, shopping center attendance is declining, stores are closing, and sales are increasingly shifting to online or local chain stores near the house. It has become more important for customers to save time and receive service near their home.
These changes are especially noticeable on the example of a network of computer clubs and small businesses: accessible points in residential areas or large complexes are often more effective than expensive locations in shopping centers. The trend of decentralized consumption shows that the habit of customers moving to the center is gradually giving way to local consumption. Cafes, shops and entertainment outlets are more successful where their target audience lives and works, and not where there is simply high traffic. The trend of decentralization of consumption is also manifested in medium-sized cities. Even in cities with a population of 200-300 thousand people, centers of attraction are shifting from historical areas to new residential areas. Therefore, more and more businesses are successfully opening in residential areas, where rental rates are lower and the audience is more stable.
Checklist for an entrepreneur: how to choose a location without mistakes
1. Define target audience
Without a clear understanding of who exactly your client is, analyzing the location loses its meaning. You need to know the age, income level, lifestyle and behavioral habits of the audience.
2. Conduct preliminary data analysis of the location
Use geoanalytical tools to estimate not only the quantity, but also the quality of traffic. Check hiking trails, shopping activity, neighborhood demographics and spending patterns. Such platforms make it possible to identify the density of housing, the proximity of schools, universities, new buildings and other potentially interesting objects. Based on the collected data, you can assess the prospects of the location in advance and eliminate inappropriate options even before your personal visit.
3. Appearance and environment
The entrance group and the facade of the room play a key role. Even if the inside presents beautiful renovations, unattractive entrances or poor street visibility can deter customers. Pay attention to neighboring businesses and their audience to assess possible conflicts and compatibility.
4. Technical condition and equipment
Check the condition of the room, ventilation, electrical power, equipment and the Internet. Do not rely only on the words of the landlord – request documentary evidence or arrange a specialist examination. If your business requires licenses, make sure the space meets all requirements beforehand. Based on the inspection, it is also worth making a forecast on the cost and timing of possible repairs or upgrades in order to assess the real costs of preparing the premises for launch.
5. Financial terms and lease
Determine the maximum rental rate and calculate all expenses on paper. In addition to the base rate, consider hidden charges, operating and marketing fees. Study the contract carefully – its terms, conditions of rental vacations, the procedure for additional payments, indexation and other legal nuances.
Do not be afraid to negotiate on rent – both at the rate and for the duration of the holidays. To do this, it is important to present yourself to the landlord as a reliable and long-term partner: prepare a business plan, show financial stability and reputation.
Also pay attention to the legal part of the contract: check the rights and obligations of the parties, the possibility of early termination, the procedure for extending the lease, responsibility for repairs and utility bills. If necessary, engage a lawyer to analyze risks and protect your interests.
6. Personal observations and behavioral factors
When visiting, evaluate not only the appearance, but also the behavior of people in the area. Pay attention to traffic at different times of the day, hiking trails, noise, lighting and safety.
7. Proximity and interaction with other points
Do not be afraid of competition. Sometimes opening next to a competitor can be beneficial, especially if the level of their service or product is lower – this will attract a part of their audience.
Be sure to visit nearby points and competitors: chat with their employees and guests, evaluate the flow, assortment, level of service and atmosphere. Today it is easy to find out the key indicators – the average check, the number of transactions, the peak hours of attendance. This data will help you project real numbers onto your premises and business format in order to draw informed conclusions about the location’s potential and its competitive advantages.
The modern choice of location is no longer a matter of visibility or random traffic, but a comprehensive investment strategy. Geoanalytics turns every meter of commercial space into a predictable asset: accurate analysis of demographics, purchasing behavior and infrastructure density allows you to form profitability scenarios with a high degree of accuracy. For investors, this means reducing downtime risks and inefficient costs, the ability to identify locations with high hidden potential, and optimizing the portfolio of facilities in terms of profitability and sustainability.
In the long term, the ability to integrate data on audience behavior, infrastructure flows, and local competition becomes a competitive advantage. Investments in business models focused on quality rather than quantity traffic provide more stable revenue and create a platform to scale in the face of rising rental costs and decentralized consumption.
By Rinat Magdeev, Franchise Development Director, Colizeum International Esports Arena Network