These will influence the choice of the location of a business. Some factors may conflict the other, e. g. a location with high crime rate will not be selected for its low rent rates, or an area with a high economic state will not be chosen to be suitable for workers that for example live far from it, instead new worker would be employed. The state of the local economy is important concerning the average income of residents in the area. If the small business is located in an area with middle class residents that can afford to pay the hairdressing costs.
If the hairdressing salon moves to an area with lower class population, the prices have to be lower and the profit will then be less. Low profits are not beneficial to the owners, and in this case more then one owner will have to share less profit because it is a partnership business. Competition can affect a small business largely because; the owner may not have experience in the management of a business or the competing against other business in the same section.
Lower competition rates are essential for a fresh starting business, so the owner has to search for a location with low competition rate. This could be done by searching for other hairdressers in the area you want to work in, if there are too many the owners have to consider looking for a new location. Suitable premises costs are also important for a fresh starting business. The cost of the business has to be in proportion to the size of the business, because the capital and the businesses income are not certainly enough for pay the rent.
If a contract is signed with the premises owners, problems such as the sudden decrease of the costumers can lead the business consider taking loans from the bank. The problem of taking loans could be high interest rates at that time and the unlimited liability of the partnership The barbershop I have investigated is located in shepherds bush; a busy area in west London. It is mostly known by “the shepherds bush market. ” Shepherds bush is a cheap area (shop products are cheap) This area has many restaurants like shawarma and falafels.
Most of the shops have many competitors because of the shepherds bush market. There are some good and some bad things about having a shop in shepherds bush. If you want to set a shop in shepherds bush, it would have to be a cheap shop because it is a low rent area. The people who come to shop there expect all or most of the shops to be cheap. This is why the barbershop is located in shepherds bush. Shepherds bush is busy because: There is also two train station that are near the market and the barbershop.