4.5 Business location

Cards (6)

Factors influencing business location
Costs
Proximity to market
Proximity to labour
Proximity to materials
Government
Why costs impact business location 
Locating in an area where cost of land, premises or labour is low enables business to save on cost of renting office or factory and on wages.
Businesses need to transport raw materials in and finished goods out so areas w good road , rail, sea or air links keep transport costs low.
Access to reliable and cheap ICT communication.
Why proximity to market impacts business location 
Service businesses must locate near customers.
Manufacturing businesses may locate near customers for easier communication.
A business located near its customers reduces costs of transporting products to this market.
Why proximity to labour impacts business location 
Business needs supply of skilled workers.
Business that needs lots of unskilled labor may locate in area of high pop or unemployment
Why proximity to materials impacts business location 
A business may locate near to source of raw materials to save on transport costs.
Shorter transport good for environment.
Why government impacts business location 
Government may give business grants towards start up costs or may reduce corporation tax for those businesses locating to area of high unemployment which may encourage firms to locate in enterprise zones