BUSINESS LOCATION Flashcards
BUSINESS LOCATION
Refers to the place where a business is sited.
WHY?
To ensure the business is in an area which offers the facilities required to succeed
HOW?
Businesses consider factors which influence this choice such as cost and proximity to labour, raw materials and the market
`Factors influencing business location
costs
proximity to labour
proximity to the market
proximity to the raw materials
costs
Location can be affected by the cost of production in different places. The cost of production is affected by a number of factors such as:
COST OF THE SITE AND LABOUR:
The price of land or premises (and labour) such as offices and factories can vary significantly based on the location.
TRANSPORT INFRASTRUCTURE:
nfrastructure includes the roads, railways, airports and ports which exist in the area and also includes ICT such as broadband. These are important for the efficient running of the business.
Government
The Government sometimes influence where businesses locate through offering many different factors, particularly if they locate in ‘Enterprise zones’, of which the UK has 48 (4 of which are in south wales).This is to increase income and employment in specific areas.
If a business locates in the enterprise zone they are offered:
Reduced tax rates (taxes on premises)
High capital allowances (lower corporation and income tax)
Superfast broadband
Sped-up planning application processes
Ready-built premises
Proximity to the market
Retailers need to consider the number of potential customers in the area as well as the amount of competition already there, and whether the customers would buy the kind of product the business sells.
Proximity to raw materials
Easy access to raw materials is essential for some businesses as it reduces the cost of transporting them, which can be very high – especially if they are bulky.
Proximity to labour
In order to run efficiently businesses need to a supply of the
appropriate workforce, whether that be skilled or unskilled workers.
