Transport links
Businesses need to make sure that their business is easily accessible, both for customers and staff. This is because a deprivation of either factor will cause the business to not run smoothly.
Venetian Ices need to make sure that the location they choose has enough people to come and work for them. They also have to employ staff with the right qualities i.e. people with the right educational and training background. They also have to be available at the right price.
Access to markets
Some businesses need an awful lot of raw materials. This is called a Bulk Gaining Process. They need to locate near their supplier. An example of this is Vauxhall in Birmingham. Their supplier is across the road. This is because the cost of transporting the raw materials is quite high, as they need a substantial amount. Other businesses, like Venetian Ices, use a Bulk Reducing Process. This means that they don’t require a lot of raw materials and can locate their business away from their supplier and near their market.
Access to market
Businesses need to attract customers. This means that they need to locate their business near their target market. If customers don’t come, there’s no business! Venetian Ices also need to consider this factor carefully
Cost of land
Businesses need to consider how much the land costs where they are going to locate. It makes no sense for a small shop selling toilet tissue to pay £3,000 a month as rent just to get a location in the town center. Rent/mortgage is also a fixed cost. This means that businesses will have to pay these costs whether they make a profit or not. They should also consider the desirability of the area in case they want to sell it/relocate later.
Venetian Ices also need to consider this factor very carefully as a wrong decision might result in huge losses for the business.
Planning permission
All businesses need planning permission for the structural change that they require in the location/building now, and for expansion later. This might involve the size of expansion allowed, as it might conflict with a “green belt” or the restriction of the height of the building. The building could also be required to have certain structural restrictions imposed to preserve the building.
Venetian Ices need to ask/check for the planning permission at their location, as this might hinder the purchase or the expansion of the business at the later date.
Visibility
Businesses need to locate somewhere people can see it. This will also increase the chances of attracting more customers, therefore increasing sale revenue. It will also help to widen the appeal to their secondary target market. A prime location is at the corner as it has bigger frontage.
Venetian Ices should also use this method, as they have no real fixed target market, and as their product is an impulse buy.
Competition
Businesses also need to check the amount/intensity of competition in and near their location. It will not be wise for a small start-up to locate near big, established businesses that sell the same or similar product. However, this will allow businesses to benefit from economies of scale. Electrical companies usually do this. It gives the business an access to a major customer base and can reduce the cost of deliveries.
Venetian Ices should locate near their competition as they are not a “recent” company and have established their product/company reputation. This will allow them to benefit from external economies of scale.
Local environment
Businesses need to locate in or near their desired environment. Local environment has an effect in consumer physcology. It also determines if the consumer will travel to the business to purchase the required product. A pleasant atmosphere will influence the purchase of goods e.g. ice cream in the case of Venetian Ices. A pleasant neighbourhood surrounded by parks and countryside could raise sales for Venetian Ices. Crime and unemployment is also an issue. Locating in an area of high unemployment is also of no use, as very little people will have disposable income. An area of high crime will also raise the cost of insurance. Banks will also be reluctant to provide loans for companies who want to set up in these areas.
Grants
Government or city councils usually provide grants for businesses that will locate in a “run-down area”; areas with high unemployment. It is worthwhile for big manufacturing businesses as this will decrease start up capital and they will have access to a large labour base.
However, for Venetian Ices, it is of no use as there isn’t much start up capital involved in setting up their business.
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Venetian Ices should locate near Harewood house. This is because they will have access to a large consumer base as it a popular tourist attraction, both nationally and internationally. It also has a big car park.
Insurance for goods and property shouldn’t be high as the local council monitors the grounds, making it a safe area.
Harewood house is also open virtually all year round, with the exception of the grounds and bird garden. Their opening times start at 10 a.m.
It has a good local environment as it has a bird garden, parklands, gardens and woodlands. This provides the customers with the ideal atmosphere to buy ice cream.
It is also easily accessible. It is situated just 7 miles from Leeds and Harrogate on the A61, and the Leeds/Bradford airport is just a short drive away. There is a bus service to and from Leeds. Two new bus services are also being introduced this year as part of the “green travel challenge”.
This also provides easy accessibility for labour and deliveries/raw materials. Planning permission shouldn’t be a problem as there are already similar shops present there. This will also enable them to benefit from economies of scale. Visibility shouldn’t be a problem, as tourists will go to the courtyard café.
However, the cost of land might a disadvantageous factor. This area is highly desirable and therefore could cost a lot.
