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There are so many considerations in choosing a location for your business that finding the perfect site is probably impossible, but by carefully assessing the options you can find the ideal site for you. This is something you need to get right the first time. Moving is expensive and disruptive and should be avoided.
Your ideal site is the one that minimizes the cost to serve your customers. There are many factors to consider and many are conflicting. Trade offs will be necessary.
Government regulations may limit your choices. Certain industries such as the chemical industry may be restricted to certain locations such as industrial parks where such operations are permitted.
Being close to your customers is important. Where are they located? Are they spread across the country? or in regional pockets? If widely scattered there are software programs that can calculate the center of gravity of your customer base. At this stage you will not have a clear picture of where your customers will be but using the research you did in assessing potential demand for your product will help. A map with potential customers marked up can provide a useful visual representation of the customer heat map for your business.
Customers are the output for your business, but if you are making products you will need raw materials. Minimizing inbound costs needs to be factored in. Shipping costs need to be understood. How are costs charged? By volume? By weight? By distance? How are materials classified? Are some considered hazardous? Such materials usually have higher freight costs.
If importing materials, evaluate potential ports of entry. Consider frequency of sailings, port charges, speed of customs clearance, potential for port congestion, ease of access. In some countries, inland ports may be your best option.
Understand transport options, quality of the roads, the availability of rail links, river transportation, intercoastal shipping. Quality of the transport infrastructure will decide you distribution strategy,
The value to weight of the product plays a role. Low value to weight products can not be shipped extended distances.
Archipelago countries such as Indonesia and the Philippines present special logistic challenges. Do you need a remote warehouse strategy? Also applies to large countries such as China and Australia.
Customer expectations on delivery lead times are an important aspect of your distribution program. You may need remote warehouses even if the transportation structure is excellent if short lead times are needed.
Availability of labor is essential; your plant will not operate without it. Research the supply of labor in your potential locations. Look at surrounding areas to understand what competition you may face for employees. Getting at the truth can be elusive. Consult other employers in the region, your countries chamber of commerce etc.
Regional political and economic stability should be assessed. Some parts of some countries are not stable and should be avoided.
Consider the supporting infrastructure. Utilities, capacity to handle peak demand, facilities for your employees, ease of access, security.
The list of question is extensive get a local to help,
Zoning and residential encroachment. Developing countries have fast growing cities. Consult the city’s development plans to identify the possibility of zoning changes.
Finding the right site will be a lengthy process. Plan well ahead.
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