When deciding upon where to locate the business will have to take into account many different factors:
There is no point in a shop locating a long way from its customers or where it is difficult to find. This may not matter so much for businesses that deliver their goods and receive their orders via mail, telephone or internet. However it is important to remember that the farther away you are from your customers, the more expensive it will be to transport the goods to them. This will have the effect of having to increase the price to cover the higher costs;
Many businesses used to locate in the centre of towns and cities where land is expensive and in short supply. There has been a trend in recent years for companies to build on out of town sites. It is also becoming more commonplace for companies that used to locate in London, where land and rent is very expensive, to move to towns and cities where it is far cheaper;
It is important to choose a location where there will be a ready supply of relatively cheap labour. Businesss can substantially reduce their costs by locating in an area where wages are lower. It would also be unwise to open in an area where unemployment is low because it would be difficult to fill all of the jobs. Similarly to the cost of land, businesss are moving out of London, where wages are relatively high, to towns and cities where it is far cheaper. It is also important to locate in an area where people have the skills you require. This may require locating in an area where wages are slightly higher;
It will benefit some businesses to be located close to their suppliers; this is because if they need some parts or raw materials urgently it will not take very long for the delivery to arrive;
It is important to locate near roads, railway, airport or seaport depending on how you intend to take delivery of raw materials or parts, deliver your product and how you want customers to visit you. It is important the site has electricity, gas, water and telecommunications connected; (these are known as 'utilities'.)
Examples of where different industries have located in the past are, fashion in Milan, financial in London and whiskey in Scotland. There can be historical reasons for the locating in particular areas, for example, textiles, pottery, steel located in particular areas because of the availability of raw materials and transport links. The 'image' then attracts further businesses of the same type because there is a local supply of labour that is skilled and knowledgeable in that industry. The local education systems may even be geared to that industry.
Businesses are also attracted by the proximity of competitors. If customers already visit a retail park for the Dixons, then it is a good place to put a Comet. This is the reason why you will often find McDonalds and Burger King close to each other in town centers.