Business Location Practice Questions

This question is about the factors that influence where a business is located.

Marek Nowicki is planning to open Loaf & Ladle, a sandwich and soup shop, as a sole trader in Taunton. All of the soups will be made fresh each morning in the shop. Marek has looked at four units he could rent in different parts of the town.

Table 1: Units available to rent in Taunton

Unit	Weekly rent	Customers passing each day
A – Station Road	£250	900
B – Market Square	£300	1 400
C – Riverside Retail Park	£375	1 100
D – Hill Street	£325	700

Item A: Coed Benches

Owen Price is a sole trader who makes oak garden benches. He set up Coed Benches in 2019 and now employs two joiners.

The workshop is a unit on an industrial estate outside Wrexham. The rent is £950 a month, which is much cheaper than units in the town centre. The unit is three miles from a sawmill that delivers the oak Owen uses. Oak is heavy and expensive to move, and a finished bench weighs far less than the timber it is cut from.

Benches are priced from £320. About 60% of orders come from customers across the UK, who order on the Coed Benches website and pay online. These benches are collected from the workshop by a courier. The other 40% of benches are sold to garden centres within 30 miles of Wrexham.

The broadband connection on the industrial estate is slow and often drops out. Two customers have been unable to complete their payment and have cancelled their orders, and video calls with garden centre buyers are difficult.

A larger unit has become available on a retail park on the edge of Wrexham. The rent there is £2 100 a month. It has fast broadband and around 4 000 cars pass it every day, but it is 40 miles from the sawmill.

Owen is deciding whether to move Coed Benches to the retail park.

Item A: Fern & Fettle

Rosie Clarke is a sole trader who makes chutneys and preserves under the name Fern & Fettle. She rents space in a shared kitchen in Keswick and sells her jars for £4.50 each at farmers' markets across Cumbria every weekend, as well as through her website.

The shared kitchen is now too small and Rosie must move. She has found two possible locations.

Unit on a rural business park, 8 miles outside Keswick: The rent is £450 per month. The unit has three times the space of the shared kitchen and parking for delivery vans. It is less than a mile from the fruit farms that supply Rosie's damsons and apples. Almost no members of the public pass the business park.

Shop unit on Keswick high street: The rent is £1 100 per month. The kitchen at the back is smaller than the unit on the business park, but the shop front faces a street where around 2 000 tourists pass each day in the summer. Rosie would be able to sell directly to customers six days a week. Deliveries of fruit would have to be unloaded on a busy road.

Rosie has savings of £6 000 and no bank loan.