Factors that affect location
- Nearness to the market (customers), to labour (skilled workers and wage levels), to materials and suppliers, and to competitors.
- Costs, such as rent and business rates. Infrastructure, such as roads, rail, airports and broadband. Government grants and incentives.
- The internet: e-commerce means many businesses can sell from almost anywhere.
Different businesses, different needs
- Shops and services need to be near their customers, where there is high footfall. Manufacturers may locate near raw materials or good transport links. Technology businesses often locate near skilled workers, such as near universities.
Locating abroad
- Reasons: lower labour and land costs, nearness to new markets, and avoiding trade barriers.
- Drawbacks: language and cultural differences, distance, harder quality control, and ethical concerns about working conditions.
Key terms
- Location
- Where a business is based.
- Footfall
- The number of people passing a place.
- Infrastructure
- Transport and communication links, such as roads, railways and broadband.
- Proximity
- Nearness.
- E-commerce
- Buying and selling online.
- Labour costs
- The cost of paying workers.
- Incentive
- Something that encourages a decision, such as a government grant.