Location, Location , Location!
You might have heard people say that location is the most important thing for a business. Then, the next most important is ... location, and so on.
For many businesses, getting the right location can make the difference between success and failure. Can think of a shop or restaurant near where you live that has closed down, maybe because it was in the wrong place?
There are lots of different reasons why location is important to a business and location matters to some businesses much more than it does to others.
Here are some reasons why location matters.
Labour
- Workers must be available locally, or must be willing to travel to work at the business.
- These workers must have the right skills.
- If there is high unemployment locally, you might find it easier to recruit workers, and maybe you won’t have to pay them as much as you would elsewhere.
- But if there is high unemployment, local people may not have as much to spend with your business.
- Often a location becomes a centre for related industries - Staffordshire for potteries, Sheffield for steel, and the local people have particular skills.
Land/buildings
- The right amount and type of land and buildings must be available.
- For some businesses, you need a lot of space - perhaps your business is noisy or creates fumes and needs to be well away from where people live.
- Some businesses need to be near their customers, or to their suppliers.
Transport and communications links
- Your workers need to be able to travel to work.
- You might need to be able to transport materials and products in and out of your business.
- Telephone, postal and Internet services might be better in cities than in the countryside.
Natural resources
- Primary industries need to be sited near to natural resources.
- Because of the costs of transport of raw materials, secondary businesses may also be sited close to resources that are important to their businesses.
Customers
- Every business needs to be able to reach its customers.
- For a retail shop, you might want potential customers to be walking past all the time.
- An Internet business might be able to locate almost anywhere!
Language
- As businesses become more global, you need people who can speak the same language as your customers. This is one reason why, for example, India has been successful in attracting call centres and software development from the UK and North America.
Image
- Some businesses need to be in a location that suits their image.
- Remember, though, high class locations tend to have high rents!
Competitors
- In some cases, you might want to be the only business of your type nearby - perhaps this would be good for a petrol station or a news agent.
- Other businesses cluster together - restaurants in Soho or Chinatown, fashion shops and jewellers on Bond Street.
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