Business location

1
Business location
2
The importance of location

• Location can be
• critically important
• quite important
• unimportant

3
Factors which influence choice of location

• Labour cost and skills
• Cost of premises
• Financial assistance and local government charges
  (ie business rates)
• Transport links (for supplies/distribution)
• The need to be near customers
• History and tradition
• Sales techniques (phone/internet/mail order)

4
Factors which influence the importance of location

• The business activity
• The number/location of competitors
• Reliance on personal visits by customers
• The methods used to contact customers
• Reliance on local supplies
• Reliance on specialised labour skills

5
Positive effects of good location on business
operations

• Additional sales opportunities (through passing
  trade, faster responsiveness) increased income
• Lower total costs of running the business (rent,
  rates, wages and salaries, transport etc)
  reduced costs

6
Relocating moving

• May be necessary if key factors change, eg
• New shopping centre opens and competitors
  relocate
• New motorway opens and diverts trade/provides new
  opportunities
• Methods of contacting customers change (from
  personal visits to mail order or Internet)
• New methods of production changes reliance on
  suppliers
• Costs increase on existing premises/alternatives
  would save money

7
Assessing location
First question does location matter to this
business?

• If so
• Is it appropriate?
• What are the specific benefits?
• Where are competitors located and does it
  matter?
• What are the costs?
• What are the alternatives?
• What would be the costs/benefits of relocating?

8
Summary

• Location matters more to some businesses than
  others
• Various factors influence location identify
  those which apply
• Could there be greater benefits in relocating?
• Important to identify the changes that could
  affect location in the future if any.