SELECTING THE LOCATION

The location of an enterprise directly affects its present requirements as well as future expansion
plans. It also influences the arrangement of machinery and equipment and the production process
of the enterprise. Therefore, the location of the enterprise should be selected while taking into
consideration the proposed size of the business. There are certain factors, such as the type of
products to be manufactured, costs of production and distribution, and environmental guidelines
and regulations. An entrepreneur should consider all these factors and balance them carefully. An
ideal location is one that facilitates minimum unit cost of production and physical distribution and
maximum revenues. It also provides an opportunity for the enterprise to grow. An entrepreneur
makes the following two selections to determine the location of his/her enterprise:
 Selection of the Region: Involves selecting the area for starting a new enterprise. The
selection of area is influenced by the following factors:
Availability of Raw Materials: Implies that the location of the enterprise should be one
where the raw materials are easily available. The availability of good quality raw materials
is very important for the success of a new enterprise. The abundant supply of raw materials
at reasonable price ensures the continuity of production and reduces the transport costs.
For example, paper manufacturing enterprises are generally located near to rivers as they
require a regular supply of water.
Supply of Labor: Implies that the availability of the required grade of labor (skilled, semi-
skilled, or unskilled) is a crucial factor that influences the location of the enterprise. An
entrepreneur requires labor to carry out the production process. Therefore, he/she should
establish the enterprise at the location where labors with required skill sets are easily
available.
Proximity to the Product Market: Signifies that an enterprise should preferably be located
near to the market of its product. This reduces the cost of transporting the finished products
to the market, which, results in the maximization of profit margins of the enterprise.
Generally, the enterprises, having national and international markets, are spread over wide
geographical areas to get proximity to all product markets.
Availability of Transport Facilities: Implies that location of the plant should be one where
the transport facilities are easily available. The availability of proper transport facilities
helps in getting raw materials and making the finished products reach the market.
Therefore, a proper selection of location results in lowest transport cost.
Supply of Power: Refers to the basic requirement for any business due to increased
mechanization. The location of the plant should be one where there is regular and adequate
supply of power and fuel for uninterrupted production process.
Climatic Factors: Indicate that certain types of enterprises require a particular type of
climate. For example, cotton mills require a humid climate, while flour mills require a dry
climate. Climatic factors have great influence on extractive enterprises, such as plantations,
agriculture, and fishing. Climate influences even the working capacity of workers.
However, the technological advancements, such as air conditioning and artificial
humidification, have reduced the impact of climatic factors up to a great extent.
Government Policies and Schemes: Facilitate the development of new enterprises at
 certain places, such as special economic zones, rural and economically backward areas,
and exterior most part of the country. The entrepreneur may select the location in a
particular region for the purpose of availing the different schemes provided by the
government. The central and state governments make policies from time-to-time including
incentives and facilities to promote the development of enterprises in certain places.
Law and Order: Refer to the primary concern of every entrepreneur before setting up an
enterprise. An entrepreneur considers the law and order and the political stability of the
area where he/she wants to set up the enterprise. An entrepreneur usually prefers the
location that is not subject to riots, extremist activities, or political disturbances.
 Existence of Complementary and Competitive Enterprises: Promote the development of
enterprises by providing the backward and forward linkages to them. At the same time,
creating a competitive environment for enterprises in a particular area. The backward and
forward linkage means a linkage between the suppliers and customers. For example, small
enterprises usually supply various components, such as spare parts, tools, and accessories,
to large enterprises. In this way, small enterprises act as suppliers to large enterprises, while
large enterprises act as customers to small enterprises. Simultaneously, small enterprises
procure final products of large enterprises and supply in the areas where the market for
relevant products exists. In this way, small and large enterprises complement each other as
well as create competition for each other. The existence of complementary and competitive
enterprises enhances the supply of the needed raw materials and increases the demand of
the finished products. It attracts both skilled and semi-skilled manpower and thereby
improves the labor market. It facilitates banking, credit, and communication facilities in
the area. In addition, the existence of complementary and competitive enterprises gives rise
to various commercial services, such as packing, forwarding, warehousing, grading, and
advertising, which help in the growth and expansion of enterprises in the particular region.
 Selection of the Appropriate Site: Implies that after selecting the particular region,
selecting the most suitable site becomes relatively easy as it limits the area of search. An
entrepreneur needs to consider two important factors to select the site, which are as follows:
Price of the Land: Expresses a crucial factor while selecting the exact site for locating the
enterprise. This is because the high price of the land may eliminate the advantages provided
by the other factors. If the land is proposed to be acquired on lease, the rent and taxes must
be considered, as such charges are added to the working expenses. In addition, the site of
the land should be spacious enough to meet the future expansion plans of the enterprise.
Disposal of Waste: Acts as an important consideration for selecting the exact site for many
enterprises. Disposal of solid waste requires availability of dump or extra piece of land,
while disposal of liquid waste requires proper sewer connections or river outlets. It is
important to solve the problem of disposing the waste before the production begins;
otherwise it can adversely affect the health and wellbeing of the workers.

SELECTING THE LOCATION

The location of an enterprise directly affects its present requirements as well as future expansion
plans. It also influences the arrangement of machinery and equipment and the production process
of the enterprise. Therefore, the location of the enterprise should be selected while taking into
consideration the proposed size of the business. There are certain factors, such as the type of
products to be manufactured, costs of production and distribution, and environmental guidelines
and regulations. An entrepreneur should consider all these factors and balance them carefully. An
ideal location is one that facilitates minimum unit cost of production and physical distribution and
maximum revenues. It also provides an opportunity for the enterprise to grow. An entrepreneur
makes the following two selections to determine the location of his/her enterprise:
 Selection of the Region: Involves selecting the area for starting a new enterprise. The
selection of area is influenced by the following factors:
Availability of Raw Materials: Implies that the location of the enterprise should be one
where the raw materials are easily available. The availability of good quality raw materials
is very important for the success of a new enterprise. The abundant supply of raw materials
at reasonable price ensures the continuity of production and reduces the transport costs.
For example, paper manufacturing enterprises are generally located near to rivers as they
require a regular supply of water.
Supply of Labor: Implies that the availability of the required grade of labor (skilled, semi-
skilled, or unskilled) is a crucial factor that influences the location of the enterprise. An
entrepreneur requires labor to carry out the production process. Therefore, he/she should
establish the enterprise at the location where labors with required skill sets are easily
available.
Proximity to the Product Market: Signifies that an enterprise should preferably be located
near to the market of its product. This reduces the cost of transporting the finished products
to the market, which, results in the maximization of profit margins of the enterprise.
Generally, the enterprises, having national and international markets, are spread over wide
geographical areas to get proximity to all product markets.
Availability of Transport Facilities: Implies that location of the plant should be one where
the transport facilities are easily available. The availability of proper transport facilities
helps in getting raw materials and making the finished products reach the market.
Therefore, a proper selection of location results in lowest transport cost.
Supply of Power: Refers to the basic requirement for any business due to increased
mechanization. The location of the plant should be one where there is regular and adequate
supply of power and fuel for uninterrupted production process.
Climatic Factors: Indicate that certain types of enterprises require a particular type of
climate. For example, cotton mills require a humid climate, while flour mills require a dry
climate. Climatic factors have great influence on extractive enterprises, such as plantations,
agriculture, and fishing. Climate influences even the working capacity of workers.
However, the technological advancements, such as air conditioning and artificial
humidification, have reduced the impact of climatic factors up to a great extent.
Government Policies and Schemes: Facilitate the development of new enterprises at
certain places, such as special economic zones, rural and economically backward areas,
and exterior most part of the country. The entrepreneur may select the location in a
particular region for the purpose of availing the different schemes provided by the
 government. The central and state governments make policies from time-to-time including
incentives and facilities to promote the development of enterprises in certain places.
Law and Order: Refer to the primary concern of every entrepreneur before setting up an
enterprise. An entrepreneur considers the law and order and the political stability of the
area where he/she wants to set up the enterprise. An entrepreneur usually prefers the
location that is not subject to riots, extremist activities, or political disturbances.
 Existence of Complementary and Competitive Enterprises: Promote the development of
enterprises by providing the backward and forward linkages to them. At the same time,
creating a competitive environment for enterprises in a particular area. The backward and
forward linkage means a linkage between the suppliers and customers. For example, small
enterprises usually supply various components, such as spare parts, tools, and accessories,
to large enterprises. In this way, small enterprises act as suppliers to large enterprises, while
large enterprises act as customers to small enterprises. Simultaneously, small enterprises
procure final products of large enterprises and supply in the areas where the market for
relevant products exists. In this way, small and large enterprises complement each other as
well as create competition for each other. The existence of complementary and competitive
enterprises enhances the supply of the needed raw materials and increases the demand of
the finished products. It attracts both skilled and semi-skilled manpower and thereby
improves the labor market. It facilitates banking, credit, and communication facilities in
the area. In addition, the existence of complementary and competitive enterprises gives rise
to various commercial services, such as packing, forwarding, warehousing, grading, and
advertising, which help in the growth and expansion of enterprises in the particular region.
 Selection of the Appropriate Site: Implies that after selecting the particular region,
selecting the most suitable site becomes relatively easy as it limits the area of search. An
entrepreneur needs to consider two important factors to select the site, which are as follows:
Price of the Land: Expresses a crucial factor while selecting the exact site for locating the
enterprise. This is because the high price of the land may eliminate the advantages provided
by the other factors. If the land is proposed to be acquired on lease, the rent and taxes must
be considered, as such charges are added to the working expenses. In addition, the site of
the land should be spacious enough to meet the future expansion plans of the enterprise.
Disposal of Waste: Acts as an important consideration for selecting the exact site for many
enterprises. Disposal of solid waste requires availability of dump or extra piece of land,
while disposal of liquid waste requires proper sewer connections or river outlets. It is
 important to solve the problem of disposing the waste before the production begins;
otherwise it can adversely affect the health and wellbeing of the workers.

SETTING UP THE INFRASTRUCTURE

Helps the entrepreneur in facilitating the commencement of operations. The entrepreneur should
take into consideration various infrastructure facilities to run his/her enterprise successfully. The
location of the enterprise should be well connected to the nearest transport networks, such as rail,
road, or port. Moreover, the site should have basic facilities, such as water, power supply, and
telecommunications. The government provides various incentives, land and building tax
concessions, rebate in water tariffs, and power subsidy, to new entrepreneurs to develop proper
infrastructures.

NAMING & REGISTERING THE BUSINESS

Constitutes an important step in setting up an enterprise.
Naming and registering the enterprise is legislative process that
authorizes the central government to regulate the formation,
financing, functioning, and winding up of the enterprise. The
main objective of registration is to maintain a statistics and role
of enterprises in the economic development of the country.
Registration is not mandatory for small-scale enterprises.
However, registration entitles small-scale enterprises to obtain
the privileges, incentives, and support services of government
available
for them.
 Fulfilling the Regulatory Requirements: Calls for obtaining a number of clearances and approvals
for land acquisition, pollution control, and safety for setting up an enterprise. An entrepreneur
needs to contact local government authorities, such as municipalities or village panchayats and
state pollution control boards, to get approvals and clearances. Certain products require clearance
from specific departments/authorities.
QUICK GUIDE TO REGISTER A BUSINESS IN PAKISTAN
1. Choose The Business Name
You must choose the business name and make a visiting Card, Letterhead and Stamp for that
business name.

2. Get Your Business Name Registered

You may do this step first of all or even after NTN registration;
 Go to the SECP website to register Business name:
https://www.secp.gov.pk/eservices/eservies-company-name-reservation/
 Signup and Log on to eServices Portal
 Select Fast Track Registration Services if you want urgent processing
 Enter data in the online form
 Submit the process.
 Take Print out of the Fee Challan of PKR 200/- or PKR 700/- for FTRS and deposit in the
selected branch of MCB bank or UBL, or make payment through credit card.

3. Register NTN Number On FBR Website

After selecting the name the thing you will have to do is to register for NTN number for your
business or company. To do this you will visit the FBR website and go for e
registration https://e.fbr.gov.pk/registration/NewRegistration.aspx
4. Documents Required
For e-registration you must have the following things;

1. Original CNIC;
2. Cell phone with SIM registered against his own CNIC;
3. Personal Email address belonging to him.
4. Original certificate of maintenance of personal bank account in his own name.
5. Original evidence of tenancy/ownership of the business premises, if having a business.
6. Original paid utility bill of business premises not older than 3 months, if having a business.

After e-registration, you will get an email with username and password through which you will
be able to log in and complete e-enrollment. You must declare the Business name as mentioned
on Letterhead while filling the form.
Your business name on NTN number form and your bank account title must be the same.