How to choose the right region of Russia for business: tips and recommendations

The success of businesses depends on many factors, but one of the key ones is the choice of region. The location can determine how profitable and sustainable the project will be.

Let's look at how to evaluate regions in order to open a project with the best prospects.

What indicators to look at and where to get them

Choosing a region is an important step for any business. A mistake at this stage can lead to low sales and high costs. Let's figure out what to look at and where to look for data.

Customer solvency

If a business is focused on retail sales or services, it is important to understand the income level of the population.

Where to look:

• Rosstat - data on average wages and income levels.
• Banks and credit institutions - statistics on loans and payments.

If the region has low salaries, it is not worth opening a premium restaurant, but a chain of budget cafes can be successful.

Competition

High competition is not always bad, but it is worth assessing whether you can occupy your niche.

Where to look:

• Maps (Yandex, Google) will show the number of competitors in the city.
• Official business websites — you can study their range and prices.

If there are already 10 car washes in a small town, it is better to open a dry cleaning service for car interiors.

Availability of rent and real estate

If a business needs premises, it is important to consider its cost and location.

Where to look:

• Avito, CIAN, Yandex Real Estate - offers for rent and purchase.
• City administrations - programs to support entrepreneurs, subsidies are possible.

In one region, renting a warehouse can cost 100 thousand rubles, and in another - 40 thousand, which greatly affects profits.

Logistics and supplies

Proximity to transport hubs reduces delivery costs.

Where to look:

• Maps and directories - check the location of warehouses, transport routes.
• Logistics companies - calculate the cost of delivery of goods.

An online store will send orders from a city with a large logistics center faster and cheaper than from a remote region.

Government support

Some regions offer benefits: reduced taxes, grants, subsidies.

Where to look:

• Official websites of regions - sections for business.
• Entrepreneur support centers - consultations and assistance programs.

In one region, the profit tax for small businesses is 15%, and in another - 5%, which can significantly reduce costs.

Rating

Regional ratings give an objective picture of their attractiveness for business. They are based on real data, such as economic development, administrative barriers, and the level of competition.

One of the key tools is the National Investment Climate Rating.

Let's consider how to work with ratings and where to look for them.

Pay attention to the National Investment Climate Rating. It is published annually by the Agency for Strategic Initiatives (ASI).

The National Rating analyzes key aspects that affect the business environment, such as administrative procedures, infrastructure availability, and more.

How to use:

• Find the rating on the official website of the Agency for Strategic Initiatives. In the “National Rating” section, you will find a full table of regions with details on key indicators.
• Study the top positions of the rating. Leading regions usually offer favorable conditions: developed infrastructure, business support programs, and efficient administration.
• Compare the region's positions over several years. A stable position in the top places of the rating indicates systemic support for business.

Many research centers publish their ratings focused on different aspects. For example:

• RIA Rating evaluates regions by quality of life and economic indicators.
• Moody’s or Expert RA make assessments taking into account investment risks.
• Chambers of Commerce and Industry in the regions compile their own internal ratings, showing local conditions for business.

How to use:

• Find ratings in the public domain. For example, on the portal of the Analytical Center under the Government of the Russian Federation.
• Compare data from several ratings. This will help to see the real picture, since everyone has different methods.
• Evaluate industry attractiveness. Some ratings focus on specific areas - IT, manufacturing, agriculture.

Some analysts publish ratings that evaluate regions by the level of tax burden and measures to support small and medium businesses.

Where to look:

• Federal Tax Service. Here you can find information on tax benefits and working conditions in different regions.
• In publications of analytical companies and business media.

For businesses related to manufacturing or trade, it is important to consider the availability of logistics hubs. Transport accessibility ratings include data on roads, ports, airports and railway stations.

Where to look:

• The Ministry of Transport of the Russian Federation.
• In studies by logistics companies such as “Business Lines”, “PEC”.

How to analyze ratings:

1. Identify the parameters that are important for business. If infrastructure is important, focus on logistics ratings, if taxes are important, focus on study tax conditions.
2. Compare the items from the top and middle of the list. Sometimes the middle positions are occupied by regions with less competition, which can be beneficial.
3. Study the rating methodology. Find out what indicators were taken into account. This will help you choose a rating that matches your priorities.
4. Check the details. If a region ranks high, check with the local administration to find out what specific business support measures they offer.

Using ratings helps you choose the best region for your business and reduce the risks associated with making the wrong choice.

Experience of entrepreneurs

The opinions of those who are already working in the selected region help you understand the real conditions for business, identify the pros and cons. Here are some ways to use the experience of entrepreneurs.

Participate in business meetings

Forums, exhibitions and seminars are places where you can meet entrepreneurs working in the desired region. Some of them will be ready to share real-life experience.

How to search for events:

• Follow announcements on specialized portals, for example, the Congress and Exhibition Center.
• Check out the plans of local chambers of commerce and industry. They often hold forums and round tables.
• Visit specialized exhibitions in your area. For example, for agribusiness - "Golden Autumn", for IT - "Digital Russia".

How to get the most out of it:

• Ask specific questions. Find out what problems entrepreneurs have faced and what resources have helped them overcome them.
• Exchange contacts. This will allow you to continue communication and get advice later.

Read thematic interviews

Many founders openly share their experiences in articles, interviews, and blogs. They talk about the difficulties and successful solutions associated with starting a business in a specific region.

What to pay attention to:

• What difficulties are mentioned most often (for example, bureaucracy, lack of personnel, high competition).
• What support tools or programs turned out to be the most effective.
• What regional features influenced the development of businesses.

Join professional communities

Online communities are one of the most accessible ways to find out the opinions of other entrepreneurs. They discuss real cases, share advice and experience of working in different regions.

Communities can be found on social networks, for example, “VKontakte” and Telegram have groups for businessmen.

How to effectively participate in communities:

• Ask questions about the region you are interested in. Find out about rent, administrative procedures, competition.
• Read topics about pitfalls: fraud, difficulties with property or taxes.
• Use reviews to check the reliability of official information.

Conduct your own surveys

If you have already selected several potential regions, conduct a short survey among local entrepreneurs. This can be done through social networks or special platforms like Google Forms.

Examples of questions:

• What are the main advantages for business in your region?
• What difficulties do you encounter most often?
• What would you change in the conditions of doing business?

The experience of entrepreneurs complements the data of ratings and official statistics, helping to see the full picture. This allows you to avoid many mistakes when choosing a region.

Key factors for assessing a region

1. Resources and infrastructure. Make sure the region provides everything you need. For example, companies in the manufacturing sector should consider the availability of labor, electricity, and affordable storage space.
2. Market potential. Assess demand and competition. Research the local population, their purchasing power, and habits.
3. Logistics and transport accessibility. Choose a region from which it is convenient to organize the delivery of goods or services. This can reduce customer service costs.
4. Tax conditions and benefits. Some areas offer reduced tax rates, preferential loans, and small business development programs.
5. Legal aspects and property protection. Pay attention to the level of transparency of local authorities and the speed of paperwork. This is important to ensure property rights and a quick launch of the company.

By choosing the right region taking into account all factors, you will increase the chances of success and long-term stability of the business.

How to compare regions

It is important to correctly analyze the data on the regions in order to choose the most suitable for business. We have collected several steps that will help to conduct an objective comparison and understand where the best regions for doing business are.

Step 1. Create a comparison table

This is the best way to visualize the differences between regions. Enter the main indicators in it to easily compare them with each other.

How to do it:

• Use standard tables in Excel or Google Sheets.
• Enter the key indicators for each region: income level of the population, transport accessibility, availability of support programs, real estate value.
• Specify specific data for each parameter (for example, average salary, number of airports and railways, tax breaks).

Example table:

How to use:

• It is easy to see in which region the conditions are most favorable for all important parameters.
• If necessary, add additional parameters if they are important for the type of business.

Step 2. Prioritize

Not all parameters are equally important. For example, a trading company may care about market size and population density, while a manufacturing company may care about the availability of natural resources or developed infrastructure.

How to do it:

• Identify key factors. These may include population density for trading companies, the availability of natural resources or energy infrastructure for manufacturing, unemployment, and the availability of skilled workers for startups.
• Rate each region based on these factors and assign points.For example, if the population density in a region is high, give it 5 points, if it is average, give it 3 points, and if it is low, give it 1.
• Calculate the scores for each region and select the one that received the highest score for the most important criteria.

Example of priorities:

Calculate the final scores for each region. This will help determine which one best meets your goals.

Step 3. Assess the risks

When choosing a region, you should not forget about possible risks that may affect success.

Where to start:

• Research the economic situation in each region. Pay attention to possible currency fluctuations, inflation, or decreased demand.
• Assess the crime rate. High crime rates can be a serious obstacle to doing business, especially in certain areas.
• Analyze the level of competition. If there are many similar companies in the region, this can make it difficult to enter the market.

Example of risk assessment:

Risks can be assessed on a scale from 1 to 3, where 1 is low risk, 3 is high risk. Add this data to the table to take it into account when making a decision.

Examples of promising regions in Russia

Some regions for doing business stand out due to their favorable conditions:

• Moscow and Moscow region. High solvency of the population, developed infrastructure, access to large markets. Suitable for companies in the IT, trade, and services sectors.
• St. Petersburg and Leningrad region. Convenient location for foreign economic activity, high-quality transport network, access to international markets.
• Tatarstan. Stable economy, support from local administration, low tax rates for businesses. Manufacturing, IT, and the agricultural sector are actively developing.
• Krasnodar region. Favorable climate, high tourist flow. The region is suitable for the hotel business, agriculture, construction.
• Novosibirsk region. Development of science and technology, convenient location in the center of the country. Prospects in the field of medicine, education and industry.

How to avoid mistakes when choosing a region

Do not neglect analysis

Lack of information about the region can lead to an incorrect choice, since you will not take into account important aspects that affect the development of businesses.

How to avoid:

• Collect all possible data about the region, using statistics, ratings and local sources of information.
• Study various reports and forecasts on the state of the economy, infrastructure and labor market.
• Compare several regions by key indicators, using tables, as described earlier.
• Consult with local experts and entrepreneurs to get a more accurate idea.

Do not ignore competitors

Underestimating competition can be serious problem.

If there are already strong players in the region, it will be difficult to enter the market and attract customers.

How to avoid:

• Research the market and identify the main competitors in the chosen location.
• Evaluate their strengths and weaknesses, including product range, prices, quality of service, marketing strategy.
• Conduct a competition analysis to understand whether you can offer something better or unique.
• Keep in mind that highly competitive regions require more serious investments and unique offers.

Don't make a choice based only on cost

The rental price of real estate or tax incentives are, of course, important factors, but they cannot be the main ones when choosing a region. Low cost may hide lack of demand or low level of economic activity.

How to avoid:

• Assess the long-term prospects of the region: is there potential for market growth, level of investment, infrastructure development?
• Consult with local entrepreneurs to understand how realistic it is to withstand competition and make a profit.

Don't forget about legal risks

If the region does not properly protect the rights of entrepreneurs, problems may arise with legal issues: contracts, property protection, dispute resolution. This can seriously complicate the running of a business.

How to avoid:

• Consult with local lawyers to learn about possible legal risks and how business rights are protected.
• Find out what legislative changes may affect running a business in the chosen area.
• Assess how easy it will be to formalize property rights and contractual relations in the region.

Results

Choosing a region for business is one of the most important steps on the path to success. Use ratings, collect data and do not forget to consider long-term prospects.

Remember that success depends not only on the choice of region, but also on the ability to adapt to conditions. The right combination of strategy, resources and a competent approach will help open a business in the best conditions and ensure its sustainable development.