Business Location Decision

Secondly, it helps to consider the consumer base local and whether a percentage of customer base support your business? When an entrepreneur is choosing communities that have a great loyalty to a specific industry, then he needs to be very cautious since a slump can attract devastating consequences to a business. An ideal example of a business that was poorly located was Kmart. The management of Kmart failed to consider the location of their business but instead, they competed with Walmart based on price strategy. The following are impacts of a poor location decision: i. High transportation costs of finished goods from production unit or warehouse to the market. Remoteness to target industry. v. Poor public resource accessibility. vi. Increased administrative costs due to increased transportation costs.