Ground floor vs. 1st floor for business: Pros, cons, and practical tips

A great business space combines functionality, customer convenience, and cost-efficiency. While some businesses thrive on ground floor visibility, others may prioritise the cost-effectiveness and exclusivity of a 1st-floor rental cost. You should strive to understand the pros and cons of a business location and how best to pick a space that works for you.

During your search or when comparing ground-floor and 1st-floor spaces, it is essential to evaluate the impact each has on visibility, costs, and security. Each option has distinct advantages and disadvantages that can influence your business’s success. Here is how:

Visibility and foot traffic

Ground-floor businesses typically benefit from better visibility. Unlike first or second-floor spaces, they attract more walk-in customers.
1st-floor locations attract pre-planned visits, which may limit opportunities for spontaneous sales but encourage deliberate customer engagement.

Rent costs and profitability

Ground floor spaces often command premium rents due to the high foot traffic ideal for businesses. On average, the ground retail and shop spaces in Central London range from £80 to £150 per square foot annually.

While less visible, the first-floor spaces offer cost savings, with rents typically 20-30% lower. Businesses with a solid marketing strategy can offset the cost of lower visibility.

Security and safety considerations

Due to their accessibility, ground-floor locations are more vulnerable to theft and vandalism. High-value enterprises that prioritise business safety find ground floors a bit risky, especially in high-traffic areas with minimal security measures in place.

While more secure, first-floor spaces may present accessibility challenges, particularly for customers with special access needs. Office buildings with these design specifications may also be few or even costlier than the average first-floor business space

Besides the visibility, cost and safety issues, another important factor to consider when selecting the right floor location is your type of business.
Every enterprise is unique. Different business owners also have their goals and visions on how they want their enterprise to scale. Provided you understand the specific needs of your industry, you can better align your choice with long-term success.

• Retail stores: For a retail business location, foot traffic is a priority. This would make a ground floor space an ideal choice.
• Office spaces: An ideal office space offers privacy and minimal disturbance. While first-floor spaces would be the most ideal, you should consider the overall setting of the area. Stick to the most basic office space tips during selection to ensure you pick a perfect environment without overextending your budget.
• Service-based businesses: Accessibility is one of the major considerations for service businesses. If you want to open a consultancy, for instance, customer accessibility should be your top priority. By default, a ground-floor office would be a deal, but a first-floor business space can also do, provided there is elevator access.

See more: Why does retail store space planning matter for business success?

Knowing what you need in terms of space location is just one step towards picking an idyllic business space. It is also important to understand the financial implications of ground- and first-floor business spaces.

If you make the selection right, you will make an informed decision based not just on your budget but also on your long-term business goals while meeting your client’s expectations.

• Ground floor spaces: In most cities or towns, ground-floor spaces require higher upfront investments. Their strategic location, however, leads to increased walk-in sales and long-term revenue growth.
• 1st Floor locations: Unlike ground-floor business spaces, first-floor business spaces save on rent, which allows for-profit reinvestment into marketing and customer acquisition.
• Other considerations: Depending on the geographical region and the nature of the business, maintenance costs for ground-floor spaces may be higher due to increased wear and tear from foot traffic. Some brands also put more emphasis on brand perception; hence, they are more likely to choose first-floor paces to convey exclusivity.

Tips for making the right choice

Even with all the factors discussed above, making the final decision on which business space to choose may not always be straightforward. Here are some practical tips to help with your decision-making.

• Conduct market research: Your first resort is to analyse the foot traffic in the region and the customer demographics to understand how location impacts sales. This will also give you insights into how your specific business is likely to perform.
• Analyse customer behaviour: Assess how your target audience prefers to interact with your businesses. For example, high-end customers may prioritise privacy over accessibility.
• Negotiate leases: Look for flexible rental agreements that allow room for growth or adjustments based on your business needs.