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Locating the Business

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Locating the Business The factors should include:
· factors influencing start-up technology, costs, infrastructure, the
location decisions. market and qualitative factors.
Candidates should understand that
their relative importance may vary
according to the type of business.

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Background Information
One of the first issues facing a new business will be where to locate its operations.
Small businesses are started in various locations - where depends on several

Technology has made the choice much easier, particularly for service-related
businesses. Most start-ups begin life at home, but then…

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Factors affecting Location
Costs associated with location decisions are likely to be crucial. Break even analysis
can be used to help decide a location based on financial information.
Costs and revenues of different locations will be considered.

Transport links are particularly important if the business delivers products, sells…

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Factors affecting Location
When a start-up needs to hire employees, then access to a reliable pool of staff
with relevant skills is important
Businesses that are labour-intensive often look to locate in areas of traditionally
low wages
Labour intensive = a work process in which labour represents a high…

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Factors affecting Location
Technology and Home Based Start-Ups
The widespread adoption of low-cost, easy-to-use information technology
solutions means that many entrepreneurs start their businesses at home. In fact,
pretty much everyone who starts a business does so from home, at least whilst
they develop the business idea, conduct market research…

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Factors affecting Location
Advantages and Disadvantages of running a business from home (teleworking)

Advantages Disadvantages

Reduced costs, because the entrepreneur Requires greater self-discipline
does not have to pay for premises

Less travelling, so that more time can Work is often interrupted ­ e.g. by callers
actually be spent working instead…

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Qualitative and
Quantitative Factors
Quantitative = numerical data that can be stored and used in a form such as a
database or spreadsheet

Examples of Quantitative Factors:
­ Cost of land and buildings
­ Availability of government grants
­ Cost of utility bills ­ gas, water, electricity
­ Cost of…

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Exam Tips
Most start-ups begin in the back bedroom, kitchen or garage - i.e. where costs are
low. The rapid improvement in communication and collaboration technologies
makes it possible to quite large businesses to operate without traditional business

A start-up often changes location several times in the early years…


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