You wouldn’t create a daycare in an area where there aren’t any children, right? So why start a studio where there are few musicians or other businesses/people that could use your services?
Starting a business will take you out of your comfort zone. If you don’t live in a popular area then you will have to move elsewhere. Unless you are only going to do mixing/mastering and in that case you can do it from nearly anywhere that has a decent internet connection.
A lot of businesses fail because they chose the wrong location. Money factors into everything. The good thing about a studio is that unlike a retail establishment you don’t need to be in an area with a lot of foot traffic. Most people will find your services through word of mouth or with a Google search. It is nice to have a place that’s accessible via a major highway HOWEVER that does not bode well for audio recordings!
The less outside noise the better. Otherwise, you’ll need major sound proofing renovations which costs a lot of money.
Speaking of which, the best areas to set up shop are not just densely populated areas but also areas where there is economic diversity. In other words, there are a lot of industries that keep the money flowing. You don’t want to set up shop in an area that relies on one major business because that place could close up and affect everyone around them. You’ll need to do a lot of research on this.
Parking. This is a big deal for potential customers. How many spaces are near the facility? Is parking free, cheap or expensive? Is there a time limit? These are important factors to consider. Free and ample parking is always a plus.
How much are utilities? What’s in the lease fine print? Is the building new or old? Old electrical wiring can wreck havoc on audio. Are there business licenses that you must get? What other local and state laws would affect your business? How many local music venues are in the area?
Finally, perhaps the second most important factor after how many potential customers does an area have is how much competition is in the area? Research them. If you can offer a better service at a competitive or lower price then you may be in the clear.
Good luck finding the best spot for your business!