Introduction:
Location plays a significant role in a business. Your business needs to be where your customers are.
Visibility of your business is not only good for the sale of your product, but it is also so helpful in creating a relationship with their customer.
The location of a business depends upon various factors like cost, availability, and accessibility by the customers.
Some factors play a significant role In the decision of the location for your business.
Market Accessibility:
The location of your business should be close to the market as it is easy to fulfill the need.
When a business is close to the market, it is easy for them to know the market trends and the demand of the customers.
It is easy to fulfill demand as quickly as possible when you save a lot of time.
Some industries react to market accessibility in a better way than others.
Hotels, restaurants, and multiplexers depend upon the location More than someone who has a business in furniture manufacturing.
Organizations dealing in service industries are likely to be concerned about the location to reach their potential customers.
Sync with the other parts of the organization:
Organizations on a large scale want to manage their resources as efficiently as possible.
It is necessary to have the whole process in synchronized way.
When an organization wants to start a new establishment like a factory, they want to open a factory near the old establishment.
An organization looking forward to acquiring a warehouse wants the warehouse to be near its showroom as it reduces transportation costs and helps fulfill the demand quickly.
Availability of Resources:
Availability of resources is another aspect of determining the location of the business.
The organization needs to identify their requirement, as for the organization dependent upon technology, they need to have skillful labor.
Whereas organizations that depend upon more labor-driven, work need to have unskillful personnel.
The organization needs to have the cost element in its mind as per the requirement. The cost of resources mainly changes with the change in availability and nature of the task.
Cost:
Cost is yet another aspect while deciding on the location.
A business looking forward to buying a place for their business wants the value for that premises.
An organization can have two types of costs while selecting the premises for their business. Either it could be the price of the establishment acquired or as an expense in the form of rent.
Companies looking forward to long-term Operations don’t want to commit hefty amounts to acquire the place to take the lease route.
Availability of the facilities:
Businesses need some unavoidable facilities.
These facilities add value to the organization by reducing costs or by enhancing the product or service. One such service is transportation.
Transportation plays a significant role for every business, and when an organization is operating in two different places, it becomes a crucial part of the business.
Efficient transportation options help the organization to bridge the distance between the two establishments of the same organization.
Availability of Services:
Businesses need some services for the proper functioning of the organization.
Each industry requires a different set of facilities.
For example, a restaurant requires electricity, water, gas, and raw material for food.
Rules and Regulations:
For the proper functioning of an organization, they need to follow all the rules and regulations associated with its business.
It will keep them away from any legal difficulties, and following the rules can give them some relaxation.
The site selected by the business owners should fulfill the rules and regulations required in that locality. The organization should carefully study and may take legal help if required.
Growth Possibilities:
Preparing for the long-term goal helps to future-proof the business.
While buying the premises, organizations should also think about the expansion factor.
Organizations should evaluate the room for expansion as prior planning for the growth helps to save a lot of money and
resources in the future.
For example, if someone is looking forward to buying a Place for their restaurant, then it is advisable to buy the place with a single floor, as it will be helpful if they think about the vertical expansion of the premises.
Safety Precautions:
Those organizations working with an element of risk for employees or the general public should prepare safety measures.
To safeguard the public interest, organizations with such risks should operate remotely.
While for the employees they should follow all the precautionary measures like updating machines and tools to Employees. Organizations should prepare funds for future uncertainties.
Flexibility:
Flexibility plays a significant role in providing the best possible product to their customers.
Flexibility helps to cater to the audience for their satisfaction.
It helps the organization to increase its market share to earn profits and future-proof its business.
Flexibility could be mainly of two types:
Production-Based Flexibility:
Production-Based flexibility is the process of shifting the production of goods from one product to another.
It can be helpful for the business to produce different products in small batches.
For Example, A bakery business catering to different products like cakes, biscuits, donuts, and related products needs certain flexibility.
Their bakery can get demand for different products from different customers within a day.
Volume-Based Flexibility:
Volume-Based flexibility states that an organization must know how to increase and decrease its volume of production as per the market condition.
It is not cost-effective to produce a higher volume of products, whose demand fluctuates with time. Organizations having these kinds of products need to have their resources flexible.
Economic Feasibility:
Every organization is running because of the motive to earn profits.
To attain their goal, they need to cut their expenses without going harsh on the quality of their product.
There are some costs that the manager can check on to reduce the extra cost.
Some of the expenses an organization may incur are(Cost highly depends upon the nature of the organization. Below are some of the generic costs a business may incur):
A) Raw Materials
B) Maintainance of Stocks
C) Remuneration to employees
D) Cost of equipment
E) Rent(if applicable)/Bills of the premise
All the expenses should be cost-effective at the level of production.
