Discuss….

What businesses are located in your given area?

Why do you think that they have chosen to locate in this area?

Do Now!

Locating the Business

By the end of this lesson you should be able to:

1. Explain the benefits and drawbacks of starting a business from home.

2. Describe the main quantitative and qualitative factors affecting location decisions.

3. Understand how different businesses will place different emphasis on location factors.

4. Use location factors to justify location decisions.

Learning Objectives

Factors affecting business location?

Discuss….

What are main factors affecting business location?

LO1 - Explain the benefits and drawbacks of starting a business from home.

Factors affecting business location

LO

Close to customers

Passing tradeopportunities

Proximity of transport links

Location of competitors

Teleworking

Technology opportunities

LO1 - Explain the benefits and drawbacks of starting a business from home.

Technology plays a huge part in business location for businesses.

Most significant – internet as it enables entrepreneurs to work from home.

You need to start somewhere – teleworking!

Advantages of teleworking Disadvantages of teleworking

• Reduced costs – no premise costs

• Reduced risk – no commitment to rental or lease

• Less travel = more work• May suit family commitments

• Difficult to separate work from home life

• Hidden costs / set-up costs• Feeling of isolation/ loneliness• Distractions

LO1 - Explain the benefits and drawbacks of starting a business from home.

Factors affecting business location – what does the entrepreneur

need to consider?

Quantitative factors Qualitative Factors

• Investment appraisal – is the investment worth it?

• What are the set-up costs – compare to financial gains?

• Cost of transforming the location into a suitable premises.

• What is the expected income of workers in that area?

• Cost of utilities?

• Cost of transporting goods?

• Suitability of transport links/ infrastructure

• Where is the market located? This could be a disadvantage as the customer base become more geographically dispersed.

• Quality of labour force

• Essential to consider: • Nature of the product• Is it a service?• What qualitative factors are

most important?

LO2 - Describe the main quantitative and qualitative factors affecting location decisions.

Factors affecting business location –

Sort the cards!

LO2 - Describe the main quantitative and qualitative factors affecting location decisions.

You should now be able to:

1. Explain the benefits and drawbacks of starting a business from home.

2. Describe the main quantitative and qualitative factors affecting location decisions.

3. Understand how different businesses will place different emphasis on location factors.

4. Use location factors to justify location decisions.

Learning Objectives