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Local factors that affect the start up of a business

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by

Hels Fraser

on 14 November 2013

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Transcript of Local factors that affect the start up of a business

Local factors that affect business

Learning Objective 1:


Understand the factors that can affect a start up business

Learning Outcomes

Be able to describe the different local factors that can affect the start up of a business

Describe and explain the local and national factors that affect business start up

Compare different factors associated with the start up of a new business

Businesses need to have a good working relationship with the local community if they are to start up, succeed and continue to operate in the long term
Starting up a business
There are many factors that a business must consider before starting up
Starting a business
Labour - requirements? Skilled / Unskilled?

Raw materials / market

Infrastructure / services
A business and its community should look to balance external costs and benefits, to arrive at a satisfactory solution.

Examples:

Some businesses have replaced production techniques with versions that are more environmentally friendly -
Flip side
- customers pay higher prices to cover the increased costs

Communities charge high business rates (local tax), but this in turn pays for the upkeep for the local infrastructure and services


Costs and Benefits
A business will have internal costs and benefit - these are a reflection of the profit/loss account and it's pricing levels
External costs and benefits
External costs and benefits have a direct effect on the community in which the business exists

Benefits add to the welfare of the community

Costs cause problems
Land
The amount and cost of land can affect a business's choice of location.

Local and National Governments can have an important role in encouraging and discouraging businesses to locate in certain areas.

Financial support - tax free grants and subsides for businesses willing to move to areas of high unemployment

The Government also has the power to restrict how much land a company can use or disallow it altogether
Competition and Customers
A business must be aware of both it's potential customers and existing competitors if it is to be successful in starting up.

Why?
Location and premises

Employees

Suppliers, Resources and Equipment

Competitors and Customers

Benefits?
Costs?
What are the National Factors that affect businesses generally and when they are first starting up


What are the local factors a business will need to consider when first setting up


You need to give explanations and where possible examples
Full transcript