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A business needs to be in a suitable location in order to maximize profits. A suitable location should preferably be a site that would help minimize the net production cost. This is due to the fact that different locations offer different costs implications and different benefits. A business will tend to be located near a source of raw materials especially if the materials are bulky. This helps to reduce transportation costs and in the process saves the business a lot of time. Where the raw materials are perishable, proximity to the firm is necessary. The distance to the market where the finished goods will be sold may also influence the location of a firm especially where the cost of distributing of the final product are high. Most businesses are located in large towns where labor, both skilled and unskilled, is usually in abundance. Availability of power is also in abundance in large towns. Business firms may be located in areas where other firms are already established due to external economies of scale. Subsidiary industries provide specialized services to the business while recycling firms buy the business's waste. Localized firms are likely to attract others which use finished goods from the established firms as raw materials thereby creating a market for the localized firms. A business will also be located where ample security and room for expansion is available. This is because a business projects to expand as it moves into the future. Other factors influencing the location of a business include the availability of auxiliary services such as banking and internet connection among others. Stephen is an business management expert. He researches and studies on big and small business strategies . Website: Business Management Strategies for efficient business operations.
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