Location, location, location. You know how important it is for your company.

That’s why when establishing a new location, whether because you’re launching a new business or expanding or relocating an existing one, you’ve got to research factors such as foot traffic, vehicle traffic and occupancy rates of the neighboring buildings. But if you don’t also investigate local zoning laws, all your good business judgment could go to waste.

First and foremost, before signing a lease or purchase contract on commercial property, make sure you can legally run your business from that location. If you’re not 100% sure you can, and negotiations are already underway, add a contingency clause to the agreement stating that the lease won’t be binding or the sale final until and unless you get zoning approval.

Zoning laws, often called “ordinances” or “land use regulations,” state how you can use leased or owned commercial property. Laws vary from place to place, but the most frequently used classifications are:

• Commercial,
• Industrial,
• Residential, and
• Agricultural.

These classifications may be used in various combinations. If a zone is strictly residential, you can’t operate a business there at all. If the land is in a commercial, industrial or agricultural zone — or a combination thereof, which is typically called “mixed use” — the zoning laws should specify what type of company can operate in a particular area.

For example, if a district is designated for mixed-use residential and commercial, the commercial uses could be limited to businesses that won’t interfere with enjoyment of the residential properties. Factories, warehouses and other heavy industries are often required to be located away from places where people live.

Within each of the general classifications are more narrowly defined divisions. For instance, a residential zone might be segregated into separate zones for single-family homes on one-acre lots, single family homes on half-acre lots, hotels, boarding houses, mobile homes, low-rise apartment complexes, high-rise apartment complexes and institutional housing.

An industrial zone may be zoned heavy, light or research. A commercial zone can be divided into small stores, shopping centers, gas stations, restaurants, drive-in facilities, adult-entertainment districts and warehouses.

Even if your use matches the zoning designation for the area, you’ll still need to study up on local zoning laws. In addition to having rules about what kinds of businesses can operate at a location, local governments often have specific requirements about parking and signage.

If your venture will bring an increase in vehicle traffic to the area, the local government may want to see a plan for dealing with the new parking needs. If the neighborhood is trying to preserve a certain kind of look, you might be restricted from putting up certain types or sizes of signs.

Zoning laws and maps are matters of public record. A good place to start your research is at the local city or village hall. Many communities have ordinances and maps available via their official websites. If you have a legal description of the property, which should include the address and parcel number, you may be able to call the city or village hall and be connected to an actual live human in the zoning department who can help you.

Beyond that, be sure to have a qualified real estate attorney review any prospective commercial lease or purchase contract, as well as serve as an advisor regarding zoning laws. Last but not least, strongly consider asking your CPA to help you weigh the costs vs. benefits of moving to a new business location.

Previous Use Is No Guarantee

Don’t rely on a previous use of a commercial property to determine whether you can use the same location for your company. The previous owners may have obtained a variance from the designated use to operate their business. That variance won’t apply to you, and you might not be able to get another one.