Location of a business

This is my revision for location of a business regardding the BUSS3 exam

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Location of a business
FACTORS THAT DETERMINE A BUSINESSES LOCATION
Customers/Market (are you close? If so you will maximize sales
revenue)
Transport Links & Costs (can customers get to you? Can you
get raw materials transported cheaply?)
Workforce (are they skilled? Do they need training? Are they
motivated? What wages do they require?)
Competitors nearby (this shows customers are there and the
business should be successful)
Reputation of location (London/Paris or Gosport??)
Low cost buildings in the area (what can the business afford
regarding premises?)
Government assistance (for new businesses)
Raw materials being close and easily available
What the owners/managers want/prefer for the location
WHY IS LOCATION IMPORTANT?
Costs the business money
Not easily changed once the decision is made (long-term)
Being close/far away from customers effects sales
If you are in the right location for your business you will have a
competitive advantage.
Could have external economies of scale (where you can share
costs between a few businesses of similar types ­ saving
costs)
INDUSTRIAL INERTIA
Some businesses are stuck where they were first located and do not
move even if the move would benefit the business. Reasons for this
include;
Reputation already being in place
Having a trustworthy and hardworking workforce
Having loyal customers
Having a good relationship with suppliers
Saving money using external economies of scale in the original
location as have a good relationship with nearby businesses

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