Locating a business

My notes on why location is important & what factors a business should consider when choosing one

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Locating the business
Business's location is decides based on a variety of
factors:
1. Technology
Technology is becoming increasingly important in the current climate especially due to
teleworking. This allows staff to work and be paid from home. This has happened and become
readily available because of the INTERNET!
Advantages Disadvantages
Reduced premises costs Its difficult to separate work from home
Reduced risk, no need to pay for rental or lease A house is never an ideal work place
(products/rent) Loss of social aspect, loneliness!
Reduced travelling time to work Hidden costs of a house, council tax, gas and
Allows entrepreneur to spend time with family electric etc
and other commitments Hard to avoid distractions, pets, children etc
Family and friends are on hand if needed
2. Cost
Many costs are involved in locating a business
Cost of land/rent
Cost of labour
Cost of transport
Cost of suppliers
3. Infrastructure
Infrastructure is the network of utilities available in the area (such as transport links, health
services, educational facilities etc. The business should take into account:
If parking spaces are readily available
Cost of the parking
Traffic flow ­ is it good?
Is there a bus stop/train station nearby?
Are there similar businesses nearby?
Is there easy access for large vans ­ deliveries?
4. The Market
The current economy in the UK is based on tertiary production. When deciding on the location
many businesses will look at how many people walk past the land per day to get an idea of
customer availability.
5. Government Intervention
Certain areas of the country give grants to businesses just starting up to encourage them. This is
especially common in areas with low levels of economic activity.

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Quantitative Factors
Where the entrepreneur lives
The reputation of the area
Local facilities
Quality of life in the area
Why is location important?
Costs the business
Not easily changed
(longterm)
If you are in the right location
you will have a competitive advantage
Don't want to be stuck in
Industria Inertia (business staying
where it started and…read more

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