Business Location Flashcards
Business Location
Location for a new and existing businesses is still largely determined by
Access to customers
Access to factors of production
Minimisation of costs
Costs
The most important location factor is likely to be the cost. The setting up of a new businesses will include a number of location costs
Planning permission
Purchasing or rental/leasing
Refurbishment
Business rates
Labour costs
Transport costs
Social reasons
Managers want to live in an environment that suits them and their families
Managers can often retain a commitment to their existing workforce, even when it makes economic sense and business sense to relocate.
The market and competition
The market is a place where buyers and sellers meet. Most exchanges still take place face-to-face, so a physical location is required.
Location should be driven by access to customers with a balance between customer footfall and rental costs
Being in close proximity to competitors, a business can benefit from its marketing efforts
Manufactures of components need to be located close to the users of their products in many industries.
Labour
Can be a deciding factors when determining location
Costs of labour, availability of labour and skills of labour are all considered.
Businesses can be attracted to certain areas by the skulled labour that may be available
The cost of labour - many UK manufacturing businesses have relocated to the far east and China, where labour costs are very low.
Government influence
Governments sometimes offer grants and taxation policies.
Infrastructure
The type and quality of infrastructure also affects access to markets. Infrastructure used to main roads, rail and shipping.
