Locating the business

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  • Created by: amy
  • Created on: 19-05-13 10:19

Key Terms

  • TELEWORKING- working from home using modern information technologies to remain in touch e.g. email
  • LEAST-COST SITE- the georgraphical location which enables a business to minimise their costs
  • BULK-REDUCING INDUSTRY- an industry in which the final product weighs a lot less than the original raw materials required e.g. steel plants
  • BULK-INCREASING INDUSTRY-an industry in which the final product weighs a lot more than the original raw materials required e.g. brewing
  • INFRASTRUCTURE- the network of utilities, transport links, education and communication networks found within a given location
  • QUALITATIVE FACTORS- the subjective views and opinions of the business owner about where to locate
  • INDUSTRIAL INERTIA- the resistance of an industry or business to change its location even though the reasons for its being there have now gone
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  • allows people to work from home
  • lower costs
  • increased convenience
  • lower costs = more competitive within the market
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small businesses need to keep their costs as low as possible to allow them to be competitive in the market...

The main costs for a new business are:

  • Land Costs- South east (expensive) town centre or out of town?
  • Labour Costs- available skills? wage costs?
  • Transport Costs- close to suppliers or your customer base?
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  • Good transport links, high speed broadband, rail airport facilities as well as more basic needs such as car parking and bus routes are very important considerations to a business.
  • A small business might choose not to locate in an area if there are persistent traffic flow problems or their suppliers cannot gain access to the site easily. 
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The Market

  • Many small businesses are retailers and they want to ensure that plenty of people will pass their premises every day. Services need to make sure that theyre conveniently placed.
  • Sometimes it is actually a good thing to locate near to your rivals as this will ensure that potential customers will visit this area.
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