Edexcel GCSE Business

UPDATED

Theme 1: Investigating
Small Business

Topic 1.4

1.4.2 Business location

Worksheet
From Edexcel
Factors influencing business location:
• proximity to:
• market
• labour
• materials
• competitors
• nature of the business activity
• the impact of the internet on location decisions: e-commerce and/or
fixed premises
Lesson objectives
• To be able to identify factors influencing business location

• To be able to discuss the impact of the internet on location

Do it now…..
Where do you think the best place to set up a café is?

Main high street near lots of shoppers

A sleepy village high street
On an industrial estate
Next to a busy road
Proximity to: market,
labour, materials and
competitors
Location and type of goods
• The location will depend
on the type of goods:
• bulky or perishable goods
manufacturers need to
be close to their
customers as the goods
can’t go long distance
• Consumer goods
manufacturers can
reduce the costs of
transport by locating
close to customers
Proximity to market
• Location close to customer
traffic is important as its
good for the customers
(convenience) and good for
the business as it may need
more sales
• There may be other services
nearby that will be useful
for the businesses
employees
• Children’s nurseries
• Shops and services for
employees
Start-up location and
industry type
• The start-up location
depends of the type of
business and the industry
it’s in
• Entrepreneur may decide:
• To work from home
• To start from a market stall
Helen Ellis started the Gourmet Pizza Company in
• To open an online business Nottingham.
• There is less risk if the She located on an industrial estate close to where
her kids
business starts small and were dropped off by the school bus.
then grows http://www.gourmetchocolatepizza.co.uk/
Start up location example
• Levis Roots started his sauce
business from his kitchen.
He made the sauce at home
and sold it to the food stalls
at the Notting Hill Carnival
Learning Checkpoint – proximity
to labour
• Proximity to labour –
what industry do you
think these areas known
for?
• Devon
• Cornwall
• Scotland
• If you are not sure carry
out some internet
research
Learning Checkpoint – proximity
to labour
• Devon – custard,
tourism, fishing

• Cornwall – tourism,
fishing, agriculture

• Scotland – whiskey,
salmon fishing
Proximity to labour
• In the UK we make a variety of
different products, and over time
certain areas have begun to
specialise in certain types of
production
• For example Nottingham was
known for it’s lace and
Manchester for its textiles
• Again over time the labour force
in the area gains skills in these
industries which makes it very
attractive for other similar
industries to set up there , as
there will be plenty of labour with
the right skills available.
• Birmingham, (cars)
• Glasgow (shipbuilding)
• Manchester (textiles)
• Newcastle (shipbuilding and steel)
• Nottingham (clothes, medicine)
• Sheffield (steel and steel products)
• Sunderland (shipbuilding and coal-
mining)
• Leeds (textiles and engineering)
• Belfast (shipbuilding and textiles)
• Cardiff (steel)
Can you create a map of the UK and
mark on the various skills?
Proximity to materials
• A business start-up will need to
think about its location in terms The Denby Pottery
of proximity to materials factory – why is
the factory
• The closer a business can be to located in Denby
the raw materials it needs for Derbyshire – what
production the lower the costs is there?
of production will be
Proximity to competitors
• Some businesses choose to
locate in a certain area which
is known for their products
• E.g.
Birmingham jewellery quarte
r
• This will draw customers to a
certain area and if they don’t
find the product they are
looking for in one shop they
may try another close by
• This is the cluster concept
Video
Nature of the business
activity
Retail
• A retail business will want to
locate close to where
shoppers go
• They will look for good
parking
• They will need to consider
the rent or rates that they
will need to pay on the
shops
• Rents in the shopping Think about your local high street, is there
centres will be higher a variety of shops? Do you have a
shopping centre nearby? What would the
additional benefit of being in a centre be?
Service
• A service business may need
to locate close to customers,
but might not need a
premises
• For example a gardener may
work from home, but will
need to travel to their
customers
• Services rely heavily on
people and so may look to
locate close to a good
supply of labour
Manufacturing
• Businesses that produce
goods will look to locate
close to good transport links
such as roads, ports and
airports
• Manufacturers may need to
locate close to a good supply
of skilled labour
• Businesses may choose to
setup in a certain location
because a government grant
is available e.g. Toyota Derby

Watch some clips of inside the factory BBC series here

The impact of the internet
on location decisions
Impact of the Internet on location
• The rise of the Internet business
now means that some new start
up businesses may change where
they trade
• For example, a business owner
can have a market stall and hand
out cards for his website
• Business owners can now work
from home and run an internet
business
• Platforms such as eBay, Etsy and
Amazon mean even people with
basic IT and business skills can
run their own start-up
Wrap it up …
• Why might proximity to customers be important for
a clothes shop?
• What type of business might want to be located
close to a steel manufacturer?
• Give one benefit of being located only on the
internet
• Give one drawback of being located only on the
internet
Sample Exam Questions
Sample question 1
Case study for question 2
Sample question 2
 JUSTIFY – technique summary
• CHOOSE AND STATE YOUR CHOICE (you will stick with this!)
• Point and BLT x 2 (pro or con) – five strands needed in total
• Point and BLT x 1 against your chosen answer to show balance

• Conclusion - (refer to the case study)

CONTEXT/SEASONING IS NEEDED THROUGHOUT (section B and C)

Counter argument – balance needed

CONNECTIVES (eg because of this, as a consequence, this leads to,

therefore, ultimately resulting in)

Testing APPLICATION, ANALYSIS and EVALUATION (levels based on mark

scheme)
How to level question 2