9.2 - Factors Affecting Start-Up Locations - Market, Government Intervention and Qualitative Factors

Market

There's fierce competition for consumers, and this requires businesses to differentiate themselves from each other, One way of doing this is the chosen location. In places where supermarkets fail or aren't present, the corner shop will tend to thrive as they meet the needs of the local customers who're not prepared to travel.


Government Intervention

Business start-ups are frequently motivated by the level of suport offered by the government. The government makes certain areas more appealing to start-up businesses. Such areas can be called enterprise zones, regeneration areas and assisted areas. To stimulate the growth of businesses in such areas, the government invests numerous resources and gives grants to new businesses looking to get established in those specific areas. These forms of assistance include grants, lower rent incentives and interest-free loans. There are nine regional development areas in the United Kingdom which have the responsibility for:

• Promotion of business entrepreneurial activities
• Provision of training for the local workforce
• Job creation
• Enhancement of business efficiency

Governments tend to be most proactive in assisting businesses to locate new premises in derelict areas, former factory sites and unused lands.


Qualitative Factor

These are factors that do not revolve around finance and money. These factors are more concerned with other benefits such as:

• Social
• Moral
• Environmental
• Expansion
• Local Amenities 

New businesses will often be attracted to areas where the quality of life is high. Availability of shops, restaurants, entertainment and leisure facilities are factors which the entrepreneur will also take into consideration. 

Areas that are environmentally friendly are becoming increasingly desirable given the modern need for businesses to be environmentally responsible and sustainable. 

Areas with a low crime rate are also attractive. In these areas, the risk of theft, burglaries and other incidents such as vandalism are reduced. High crime areas tend to keep customers away because of a general fear of those areas. 

Expansion of the business is part of every enterprise's growth plan. Therefore, it will be attracted to an area that will stimulate business growth. 

Local amenities that are essential for businesses are very important. Communication, support services, broadband services, network supply, infrastructural facilities always encourage establishment of a new business.