Business Size and Location

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Concept:
Size of business refers to the scale of operations and it is important because it affects the cost operations and inputs required.
Total Assets
Capital Required Number of workers employed Capacity of plants Quantity of materials
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Factors Affecting Size of Business

1. Type of industry 2. Nature and variety of product 3. Size of the market 4. Capital requirements

5. Ability and policy of owners

6. Cost of transport
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Factors affecting Location Decisions

1. Availabilty of raw materials 2. Proximity to the market 3. Labour supply 4. Transportation and Communication 5. Power and fuel 6. Climate and topography 7. Momentum of an early start 8. Supply of capital 9. Government policy 10.Strategic considerations 11.Miscellaneous
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Urban Location
Advantages
Good transport & communication Availabilty of skilled labour Easy availability of power

Disadvantages
High cost of land and building High wage rates High taxes

Good drainage system

Well developed markets Health, education, other amenities

Over crowding
Strict legal restrictions Strong trade unions

Pollution

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Rural Location
Advantages Easy availabilty of land Low cost of land & buildings Low wage rates Abundant supply of unskilled labour Disadvantages Shortage of skilled labour Poor transport and communication Irregular power supply Inadequate banking, insurance and postal services

Pollution free environment

No over crowding Tax Incentives

Absence of basic amenities

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Need for Government Policy

Balanced Regional Development
1. To reduce regional disparities 2. To provide employment opportunities

3. To ensure optimum utilisation of local resources

4. To improve living standards in backward areas 5. To avoid social problems like slum, over crowding. 6. To safeguard industries against external attacks
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Policy measures by Government

Positive Approach Encouraging the setting of Industries in backward areas to achieve balanced Regional development. Negative Approach Restraining further concentration Industries in already developed areas.

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Industrial Estates
An institutional arrangement for building up basic infrastructure and common service facilties for development of industrial units. Hence, its a planned clustering of industrial units Offering standard factory accomodation and variety of Services and facilties to occupants.

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Thanks

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