Business location common mistakes

Common mistakes

• Assuming proximity always reduces all costs

  Thinking that being close to the market will lower every expense.

  Fix itProximity mainly cuts transport and logistics costs; it can raise rent, wages and competition, so the overall cost effect depends on the specific context.

• Confusing labour cost with labour availability

  Assuming high wages automatically mean a good location.

  Fix itHigh wages may reflect scarcity of skilled labour, but a large, affordable workforce can still make a location attractive.

• Mixing up fixed and variable costs

  Assuming that all costs increase with production level.

  Fix itRemember that fixed costs stay constant regardless of output, while variable costs rise with production.