Business location

• Market

  A business' customers and consumers
• Close to market


  Extremely important for businesses such as takeaways, corner shops, clothes shops, pop-up food businesses and hairdressers
• Not close to market


  Not an important factor for online design businesses, clothing manufacturers and car manufacturers
• Labour


  People whom a business employs or would potentially want to employ
• Proximity to labour


  • Important for businesses to be close to high-quality labour or to be located in an area to which employees are willing to travel
  • Businesses need to ensure they are located in an area that has people with skills relevant to the job role
  • For low-skill roles, businesses just need to be located near any populated area
  • For high-skill roles, businesses may need to be located close to big cities, university towns or other areas that attract more highly-skilled people
• Raw materials


  Materials used to produce a product
• Proximity to raw materials

  • Important for saving money for some products
  • For bulk-gaining products, it makes sense to be located near the market to avoid transporting the finished product far
  • For bulk-reducing products, it makes sense to be located close to the raw materials to reduce transportation costs
• Competitors


  Other businesses offering similar products or services
• Proximity to competitors


  • Many businesses like to be located far away from competitors to access more customers without competition
  • Some businesses like to be located close to competitors as customers are likely to shop around (e.g. car dealerships, clothing shops)
• Factors business owners consider when choosing a business location

  • Type of business
  • Proximity to customers
  • Proximity to labour
  • Proximity to materials
  • Proximity to competitors
• Retail companies


  Generally want to be located as close to their customers as possible
• Service companies


  Sometimes need to be located near their customers, sometimes they can be located anywhere
• Manufacturing companies


  Generally prefer locations with cheaper rent rather than being close to their customers
• Infrastructure


  Facilities that support everyday economic activities, e.g. roads, phone lines, gas pipes
• An efficient transport network enables staff to get to work easily, allows supplies to be brought in from far afield, and permits finished products to be moved to market cheaply and quickly
• The importance of location depends on the type of business
• 1. commerce


  Any transaction that takes place through the internet
• 1. commerce


  Any transaction that takes place using mobile technologies, for example a mobile phone app
• 1. commerce and m-commerce


  • Allow businesses to choose cheap locations, because there is no requirement to be located near to customers
  • Businesses are able to sell items online and then send them to customers using couriers
• Businesses that operate online

  • Clothing companies
  • Designers
  • Bloggers
  • Influencers
• Some companies choose to have both an online business and a fixed retail premises
• Many new, small businesses focus on e-commerce and m-commerce when they are starting out in order to keep their costs low
• Benefits of e-commerce and m-commerce

  • Lower costs
  • Flexible working hours
  • Access to a much larger market of potential customers
  • Ability to be open 24 hours a day, seven days a week
  • Relatively low-price marketing and promotion