Businesses can choose where to locate. Choice of location is critical and could be a major factor in if the business is successful.

Authors Avatar

Businesses can choose where to locate. Choice of location is critical and could be a major factor in if the business is successful.

Factors influencing location

Every business will locate where they think they will be successful. Businesses need to remember that they need:

  • Staff to work there

  • Raw materials to produce finished products
  • Customers
  • To keep their costs as low as possible

Factors affecting location

One of the first decisions any owner of a business has to make is where they will locate their business in order for it to be successful. In order to do this, they have to assess the costs carefully. The best location would be the one where costs are cheaper. The owner of the business has to look at the benefits of location to a particular place and the help that might be available to them from the government. Factors that might be affecting the location of a business can be divided into three main areas:

  • Costs of location
  • Benefits of location
  • Government influence on location

Costs and Benefits affecting location

For every potential site, the business needs to look at a combination of factors in order to weigh up the advantages and disadvantages of each factor. If a site is to be chosen, it will be the site that provides the best result but not necessarily the best in every category. All of the factors have to be assessed and ranked in order of importance to make a final choice for where to locate. Some of the factors are:

Join now!
  • The need to be close to the customers
  • Nearness to raw materials and natural resources
  • Transport costs
  • Land costs
  • Cost of premises
  • Supply of skilled and experienced labour
  • Safety
  • Waste disposal
  • Communication
  • Regional advantages
  • Government influence
  • History and tradition

Local labour supply

All businesses need to employ staff so it would be an advantage to locate in an area where people live. A remote area would have difficulties finding people to work for them. The factors that influence a particular location are often local skills and cost of labour.

Local skills

If you wanted to set up ...

This is a preview of the whole essay