Question

Explain five factors that influence the location of business enterprises

Answer 1

1. Availability of raw materials – firms are located near sources of raw materials, to obtain the raw materials when still fresh and to ensure constant supply of raw materials
2. Availability of market- firms are located near markets to reduce costs of transporting finished products and to ensure steady supply of goods in the market.
3. Availability of water and power- firms are located where there is power because it’s used for lighting and moving machines. water is used for moving machines, as a raw material and as a cleaning agent.
4. Government policy –sometimes government influences location of firms in order to reduce regional inequalities and encourage balanced regional development
5. Availability of auxiliary services such as banking, insurance and transport