Business location 13 The importance of location Location

Business location . 13

The importance of location Location can be: · critically important · quite important · unimportant Why is there a difference? 1. 3 Business location

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) 1. 3 Business location

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 1. 3 Business location

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 = HIGHER PROFITS 1. 3 Business location

Relocating = moving May be necessary if key factors change, eg · · New shopping centre opens and competitors relocate · 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 New motorway opens and diverts trade/provides new opportunities 1. 3 Business location

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? 1. 3 Business location

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. 1. 3 Business location