Business Location

Question 1

define footloose businesses

Answer 1

businesses that move from from location to location, basing themselves wherever suits best their needs at a particular time

Question 2

give 5 main factors to consider when deciding where to locate a new business

Answer 2

purchasing or rental/leasing
refurbishment
business rates
labour costs
transport costs

businesses will have limited capital so will need to keep their costs low

Question 3

give 5 other factors influencing choice of location and expand on them

Answer 3

proximity to the market:
should be accessible to customers
high footfall
examine the demographics of customers and examine whether their product would match the customer profile
being near similar stores can help

proximity to competitors:
business can benefit from competitors’ marketing efforts
more customer interest and higher individual sales
economies of concentration

infrastructure:
structures and facilities needed to operate a business
type and quality of infrastructure affects access to markets

availability and cost of labour:
attracted by the skilled labour available in that area
many manufacturers have relocated to countries like China and the Far East due to low labour costs

government:
cost of labour can be affected by availability of government grants, giving incentives and government taxation policies

Question 4

what are four reasons that a business may relocate?

Answer 4

access to international markets - a business can gain access to a training block
tax advantages - between countries, rate of corporation tax vary, businesses can inflate their profits due to low tax costs
access to cheaper factors of production - land and labour, can impact costs of production significantly
freedom from restrictions - can reduce costs by locating in countries where there is less red tape and legislation

Question 5

evaluate the choice of different locations for business

Answer 5

manufacturing businesses - close to raw materials/good infrastructure
retail based - close to consumers and similar businesses
online - close to transport links and cheaper locations
small/start-up businesses - prioritise the cost and affordability of locations