Location – 3.1 Standard Grade Business Management

What affects choice of location? Main factors affecting where a business locates: –Business Type –“Location Criteria” –Sources of Finance –UK Government –European Union –Globalisation

Why is location important? A good location will help a business obtain: –Higher Sales due to: Demand for product Lack of competition Quality premises –Lower Costs due to: Cheaper premises Low transport costs Low labour costs –Higher Profits due to: Higher sales Lower costs

Business Types Sole Trader –LOCAL business location –Usually SMALL premises Partnership –LOCAL business location –Usually SMALL/MEDIUM premises Private Limited Company –LOCAL business location –Usually SMALL/MEDIUM premises Public Limited Company –NATIONAL/MULTINATIO NAL business location –Usually MEDIUM/LARGE premises

Costs v Benefits Location Costs: –Premises –Rates –Wages and Training –Transport Location Benefits: –Available Market –Relative Premises costs –Relative Rates –Relative Wages and Training –Relative Transport Costs Benefits should outweigh costs

“Location Criteria” “Location Criteria” – important factors when deciding on location Vary between businesses Common Criteria – –Availability of Raw Materials –Availability of Labour –Availability of Land –Competition

“Location Criteria” cont. –Distance to Market –Infrastructure –system of structures/facilities which make business activity easier (roads,railways, airports, schools, hospitals) –Transport Costs –Local/Central Government Support –EU Support –Health and Safety Regulations –Use of ICT