As close to your customers as possible. That being said, a design company should end up with clients all over the place, so cheaper office space is probably better. Impress your customers by having meetings in a nice hotel or restaurant instead of having super expensive office space.
If you had a website design company, where would you locate the physical location of the business in your city:
1. Around the economic zone? The place where most manufacturing companies are located?
2. Near the central electronics market of your city?
3. You go to the area where most companies has offices there? (business area)
What location would You take to show professionalism?
The business is 2 years old BTW.