Choosing a location for a business is important as the location chosen can affect a businesses performance.

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Part A. Location                October 03

Business studies

Mr.Laidlaw

Location

Choosing a location for a business is important as the location chosen can affect a businesses performance. When choosing a location it is important to take in mind the kind of business you are looking to locate. The considerations of a large retail outlet are different to those of a large factory, e.g. a large supermarket is ideally placed in the centre of a built up area or on the edge of a town or city provided the site has good transport links.

Space

        When considering a site for location it is important to ensure especially in a built-up area whether there is enough space, i.e. a supermarket would loose money if the site available to it could not provide ample parking for customers. Or enough space to display a full range of goods.

Competition

        Area for possible locations need to be researched in depth to ensure that the competition will not effect the profitability of the business e.g. a small corner grocery shop would not do well right next to a big supermarket. However a bank or financial service is likely to benefit from having a presence in London as London is considered the banking capital of the world.

Price

        Leasehold or freehold sites can protect business from high increases in operating costs. Also locations in the middle of nowhere are likely to have cheaper rent, business rates and ground rates than in the centre of major cities.  

Transport links

Transport links i.e. rail, road and public transport are an important influence of where a business is located these links are necessary to bring in raw materials, transporting out finished goods, bringing ion customers and giving easy access to employees, e.g. retail industries such as Tesco’s need to consider how easy it is for the customer to get to them via public transport or good road links. Service industries need to consider where their customers are and how far they are prepared to travel to provide their service.

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Incentives

        When considering location it is often worth researching whether certain areas can offer financial incentives. Due to high unemployment in some areas the European union and local governments may offer financial incentives to start businesses in their areas, with an aim to create new jobs. Some of these incentives can include free or subsidised rents on premises, subsidies per employee or grants for additional workers employed. Incentives can sometimes be offered in inner city areas in order to encourage businesses to move into run down areas in an attempt to regenerate derelict sites.

Natural resources

        Some businesses ...

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