Locating & Evaluating a Site

Every entrepreneur is faced with the problem of deciding the location for his/her factory or plant. Location of the business is the most important factor influencing its success or failure. It is a long-term decision which should take into consideration not only the present requirements of the organisation but also its future expansion plans. Errors in location may be very difficult and expensive to rectify. Location of a plant has a bearing on the layout of machinery and equipment as well as on the process of production. The choice of location depends on several important factors.

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Selecting a region for setting up an enterprise is dependent on the following key factors:

  • Availability of good quality raw materials
  • Supply of Labour
  • Proximity to the Product Market
  • Availability of transport facilities for movement of raw materials and finished goods
  • Adequate Supply of Power
  • Climatic factors
  • Government Regulations and Policies
  • Law and Order
  • Existence of complementary and competitive industries

After the selection of the particular region, choice of the most convenient site has to be made. The two most important considerations to be taken into account for evaluating the site are:-

  • Price of Land (including rent and taxes in case of lease)
  • Disposal of Waste: For many factories, disposal of waste is an important consideration for selecting the exact site. Disposal of liquid waste requires proper sewer-connections or river outlets, while disposal of solid waste needs availability of a dump or an extra piece of land for the purpose.