Is an important factor for many small firms. With the development of communication technologies such as mobile phones, personal computers and the internet means its now feasible for people to work from home or in locations that are away from centralised office, distribution or production bases. This is called teleworking.
Most of these jobs are where the person does not need an office or factory base. The job usually involves IT work, consultants, building, transport and distribution.
The essential element is being able to communicate through technology at certain times during the day.
In manufacturing, if technological equipment is needed then its highly unlikely that the business will be able to operate from the owner's home. Therefore as a consequence the location tends to be an industrial estate or something similar.
For start-ups and small businesses it is vital that costs are kept to a minimum to allow the business to compete with larger competitors. The main assumption is that businesses will locate at the least-cost site (location that allows a firm to minimise its costs).
The main costs are land, labour and transport.