Business Location Flashcards

All 9 cards in this deck

Name five factors that influence where a business is located.

Proximity to the market, availability of raw materials, availability of labour, competition, and costs.

Why does proximity to the market influence a business's location decision?

Being close to customers cuts transport costs and delivery times, and makes it easier to attract customers and boost sales.

Why does the availability of raw materials influence a business's location decision?

Locating near suppliers of raw materials or components reduces transport and import costs and avoids delays in supply.

Why does the availability of labour influence a business's location decision?

The business needs enough workers with the right skills nearby; areas short of skilled labour mean higher wages or training costs.

How can competition in an area influence where a business locates?

Many rivals nearby can take away customers and force prices down, but a busy area with competitors may attract more shoppers overall.

True or false? The cheapest location is always the best location for a business.

False. It depends on whether that location still brings in enough sales — low costs are no use if customers cannot reach the business.

Why might a business choose a site with lower rent or land costs?

e.g. an out-of-town unit instead of a city centre one

Its costs are lower, so it can keep a larger profit margin or charge customers lower prices.

For an online (e-commerce) business, why is being close to customers usually less important than for a high street shop?

Customers order online and the goods are delivered, so the business does not depend on passing trade.

Which location factor is likely to matter most to a business using heavy or perishable raw materials?

e.g. a jam maker using fresh fruit

Availability of raw materials — locating near suppliers cuts transport costs and keeps the fruit fresh.