6. Technology
• A major factor as technology has rapidly advanced, e.g.
mobiles, internet, laptops
• Teleworking-working in a location that is separate from a central
workplace, using telecommunications
• Approx. 3.3million teleworkers in the UK
• IT is essential for small businesses- 41%of self employed people
are teleworkers
• In manufacturing a lot of technological equipment can be
require therefore location tends to be on industrial estates.
7. Costs
• Least-cost site- the business location that allows the
firm to minimise its costs (and selling price)
• For start-ups and small businesses it is important to
minimise costs in order to compete
• If selling price is vital in achieving sales, the least-cost
site will boost competition
• Quality and service is also extremely important
8. Types of costs…
Land costs
• Land can represent a large proportion of total costs-
many retailers choose to locate away from town
centres
• If a business wishes t expand, land costs can be a
major stumbling block
• Can also be a factor if an industry has special
requirements
9. Types of costs…
Labour costs
• Minimum wage varies from region to region- low-wage
areas could be least-cost sites
• A highly skilled labour force may compensate for higher
wages
• The labour cost per unit is more important than the wage
level- this is a key aspect of decision to relocate abroad
• Firms need to consider the quality and reliability of the
product/service
10. Types of costs…
Transport costs
• Location of raw materials is crucial for most primary industries
• Bulk-reducing/ weight-losing industries- least-cost site is close to
raw materials
• Bulk-increasing/ weigh-gaining industries- least-cost site is close to
market
• Location of suppliers
• Distribution
11. Infrastructure
The network of utilities, such as transport links,
sewerage, telecommunications systems, health services
and education facilities
• Transport links (roads, rail, airports, ports) and labour
force are essential- companies also need basic
services
• For small businesses local infrastructure may be
more important than regional or national
12. The market
• The majority of small firms in the UK are in the tertiary
sector- market is extremely important
• Customers expect convenience and easy access
• Footfall
• Consumer buying behaviour
• Revenue may be more important than costs
13. Qualitative factors
Based on opinions and wishes of individuals
• Convenience
• Unique selling points
• Quality of life
• Inertia
• Health and safety
• Opportunities for expansion
• Competition
14. Remember…
There are lots of factors that businesses need
to consider when deciding on location, there
importance will vary depending on the size of
the business.
15. Locating small businesses
• Demographic factors
• Economic wealth of the area
• Footfall
• Parking factors
• Competitors’ locations
• Location history
• Council policies
