Business Revision Guide: 4.5

• Location refers to the place where a business is sited
• Proximity means 'nearness to' or how close something is
• Factors influencing business location:

  Costs - locating in an area where the cost of land, premises or labour is low enables a business to save on costs, transporting materials = areas with good road rail, sea or air links keeps transport costs low, access to reliable and cheap ICT communication, such as fast broadband
• Factors influencing business location:

  Proximity to the market - service businesses must locate near their customers. Manufacturing business may locate near their customers for easier communication. A business located near its customers may be able to reduce the cost of transporting products to his market
• Factors influencing business location:

  Proximity to labour - a business needs a supply of skilled workers. A business that needs a lot of unskilled workers might locate in an area of high population and / or high unemployment
• Factors influencing business location:

  Proximity to materials - a business may locate near to a source of raw materials to save on transport costs. Shorter transport journeys are good for the environment as this minimises carbon emissions and enables the business to be more environmentally friendly. This also helps to reduce business costs
• Factors influencing business location:

  Government - the government may give businesses grants towards start - up costs, or it may reduce corporation tax for those businesses location to an area of high unemployment, which may encourage firms to locate in enterprise zones, such as in South Wales