For many businesses, business location is an essential component in its eventual success or failure.

Site selection can be pivotal in all sorts of businesses, including retail, service, wholesale, and manufacturing efforts. In fact, studies conducted by the Small Business Administration (SBA) and other organizations indicate that poor location is one of the primary causes of business failure in America. Conversely, a good business location can be enormously beneficial to a small firm. As Fred I. Weber Jr. remarked in Locating or Relocating Your Business, "sometimes a business that might otherwise be only marginal makes a good profit because of an excellent location. On the other hand, a poor location can often drag down a good business. It can affect sales adversely and help decrease the company's profit by adding to its cost." LOCATION NEEDS OF VARIOUS BUSINESS TYPES Each of the above-mentioned business typesretail, service, wholesale, and manufacturinghave different site needs that need to be considered when settling upon a location for starting or relocating a business. RETAIL BUSINESSES The success of retail establishments is often predicated to a large degree on their location. "Real estate professionals are fond of saying that the three most important factors in choosing a business space are location, location, and location," wrote Fred S. Steingold in Legal Guide for Starting and Running a Small Business. "For certain types of retail stores and restaurants, this may be true. For example, a sandwich shop requires a location with a high volume of foot traffic. Or maybe you'll benefit if you're near other businesses that are similar to yours; restaurants often like to locate in a restaurant district." Since location is so important to most retail operations, small business retailers often have to make significant expenditures to secure a good site on which to operate. Property owners that offer land or buildings or office space for lease or sale in already-thriving retail areas know that they can command a higher price because of the volume and quality of business that the location will bring to the company. SERVICE BUSINESSES Many service-oriented businesses also need to operate in "high traffic" regions, but there are exceptions to this. Most homebased business owners, for example, package their talents in service-oriented businesses (software development, freelance writing, home improvement, etc.). Others, such as pest control services or landscaping services, secure the majority of their customers through the Yellow Pages, etc., and thus do not need to worry as much about their location (although location can become a problem because of other factors; for example, a service business that has to travel great distances to take care of the majority of its customers might consider relocating closer to its primary customer base). Still other serviceoriented businesses, of course, rely to a great degree on their location. Dry cleaners, hair salons, and other businesses cannot afford to locate themselves on the outskirts of a business district. Many of their customers frequent their business precisely because of the convenience of their location; if that benefit dries up, so too do the customers. WHOLESALE BUSINESSES Whereas the primary consideration for retailers and some service businesses is to locate themselves in high traffic areas hence the ubiquity of such businesses in shopping centers and mallsthe major location concern of wholesalers is to find a site that has good shipping and receiving facilities and close proximity to transportation routes. Zoning laws are also a consideration. Most communities maintain zoning laws that restrict where wholesalers can set up their businesses. MANUFACTURING BUSINESSES As with wholesalers, businesses engaged in manufacturing usually have limited site location options because of local zoning laws. But manufacturers generally do not lack for options when the time comes to build or relocate a facility. Most communities have any number of sites to choose from. The key is to select the land or building that will be most beneficial to the company in the long run, taking into consideration the company's primary market, the available labor force, transportation factors, availability of raw materials, available buildings or building sites, community attitudes toward the industry, expense, and convenience of access for customers. LOCATION OPTIONS Small business have a number of different choices in the realm of site selection. The type of facility most often embraced by retail and many service establishments is the shopping center. The shopping center, which houses a variety of different stores (often including well-known chain stores), can take several different forms, but the best known of these is the mall. These establishments provide their tenants with large numbers of potential customers and professional marketing and maintenance services, but in return, tenants often pay high rent and additional fees (to cover maintenance costs, etc.) Many other small businesses, meanwhile, are located in smaller shopping centers that are sometimes known as strip malls or neighborhood shopping centers. These centers, which rely on a smaller customer base than their mega-mall cousins, are typically anchored by one or two large supermarkets or discount stores. The rest of the stores are usually small retail or service establishments of one type or another. The rent at strip malls is generally much less than it is at major malls, but of course, the level of traffic is generally not as high either. The small business owner who wishes to establish his or her store in a shopping center must carefully weigh the financial advantages and pitfalls of each of these options before moving forward. Other retailers or service businesses prefer to set up their businesses in freestanding locations. Restaurants, for instance, often choose to set up their business in a lone building, attracted by the lower fixed rent that often accompanies such arrangements. Another facility option for the small business is the business park or office building. Indeed, many professionals (doctors, architects, attorneys) choose this option, attracted by the professional image that such trappings convey and the ability to share maintenance costs with other tenants. Some service businesses also operate from these facilities, especially if their primary clientele are other businesses.

OWNERSHIP VS. LEASING Whether starting up a new business or moving an already established one, small business owners are faced with the question of whether to lease or purchase the land and/or facility that they choose as the site for their company. Most small businesses operate under lease arrangementsindeed, many small business owners do not have the necessary capital to buy the facility where they will operatebut some do choose to go the purchase route, swayed by the following advantages:

Increased sense of permanence and credibility in the marketplace Property taxes and interest payments are tax-deductible Facility improvements increase the value of the business's property rather than the landlord's property Increased net worth through appreciation of both the business and the facility (including land and buildings) No forfeiture of asset at the end of term Ability to liquidate (lessors often have far less freedom in this area)

Of course, there are also factors associated with ownership that either convince small business owners to stick with lease agreements or preclude ownership as a viable option.

Risk that value of the land and/or facilities will actually go down over time because of business trends (a neighboring anchor store goes bankrupt) or regional events (a flood, massive layoffs) Financial risks associated with purchasing are greater, and put a greater financial drain on small establishments that often have other needs (purchasing typically requires greater initial capital investment and entails higher monthly costs) Property can be claimed by creditors as an asset if the business goes bankrupt

PLANNING FOR THE FUTURE An important factor that small business owners need to consider when weighing various business location alternatives is the site's ability to address the company's future needs. "You should keep in mind the danger of putting off relocating because you 'can't afford it now,' " warned Weber. "Some ownermanagers find that, as time goes by and their competitive positions worsen, they can afford relocating even less. They learn the hard way that if a company stays too long in a location it can die in that location." Even a company that is performing satisfactorily can benefit from regular reviews of the pros and cons of its location. "What about technological improvements?" wrote Weber. "Have you ever thought that, if you move, you could take advantage of the technological improvements that have come along in your industry since your present facility was built? If your facility has become a competitive liability because of such innovations, moving to another building may be the most economical way to become competitive again." Most business consultants counsel their clients to do two things to avoid getting stuck with an inadequate business facility and/or location: 1) plan for the future; and 2) pay attention to the tell-tale signs that are often buried in the business's balance sheet. "Facility costs are a normal everyday concern," wrote Wadman Daly inRelocating Your Workplace, "but their relationship to other operating and overhead expenses can alter gradually in ways that, once perceived, suggest a facility change. Rent, operating expense, maintenance, taxes and insurance, etc., should be monitored as a percent of one or more preferred productivity measures to serve as a good indicator of the need for facility change."

With the markets becoming competitive and demand for industrial land on the rise, site selection is becoming one of the most defining factors. More so, if it is a chemical plant, as it is tagged on with the social and environmental impact. Scrutinising the relevant factors will lead to the determination of the ideal site for setting up of a unit. Site selection can be best described as a logic-driven exercise that needs to be carried out systematically. When it comes to actually finalising a site for a plant set-up, it is an investment decision having a lot of implications. Therefore, this calls for a lot of time and thought before selecting the site. For a manufacturing firm, it is certainly not a real estate investment alone. Compared to the total investment in plant and machinery, the real estate cost component may end up as a 5-10 percent factor. Hence, before finalising the site deal, companies need to consider several issues that have the potential to impact the business prospects. Given below is a generic list of factors, which usually influences the decisions. Political climate: A hassle-free and pro-industrial environment is desired. The broad indicators will be a historical track record of the area. While most established industrial areas will qualify in this aspect, there are few regions in the country that are still not really favourable. A chemical plant set-up in a sensitive densely-populated region may not be the most suitable, if the discharge is toxic even after treatment. One must consider this factor in detail, as some of the issues may be raised after the plant is up and running. This is more applicable if it is a freehold land and not an Industrial Development Corporations allotted land.

Site infrastructure: While basic infrastructure like power and water is a must, as on date, availability of these basic facilities vary across regions. Also, it will depend on the type of process plant being set up. A continuous process plant may require continuous power supply where as a Distributed Generation (DG) support system may become unviable. Certain industries may require a large supply of water also. A check on the reservoirs and sources are best advised under such circumstances. Natural gas networks are still being proposed in various parts of the country, which can be a driving factor for many. Location infrastructure: Proximity to ports will be critical, if it is more of an import- or export-oriented unit. Connectivity through air, sea, roads and rail should also be considered. While highways are being widened in various regions, quality of internal roads to industrial estates is still one of the reasons for favouring a site over another. Currently, as the freight train lines are being revamped across the country, locating the site in proximity and in parallel to container rail stations is advantageous. Availability of a common effluent treatment plant or a sewage treatment plant will be important in case of plants having significant effluent discharge. Strategic fit of the macro location: All said and done, the location selected should make business sense. Weightages have to be assigned to criteria in order to finally determine on what to compromise and what not to. If not, there is a possibility that one can be flooded with choices and this will result in more time in taking the final decision. Neighbouring industries: Sometimes the best indicators are the neighbouring industries. It will offer the required insight into the industrial estate related to infrastructure, manpower availability, operations environment, etc. Discussions with existing plants may throw light on factors such as flooding, power outages, lack of water supply during summer season, etc. Also proximity to raw materials or clients may significantly impact the business prospects. A Just-In-Time or continuous supply of the product requirement to the client may result in the attempt to find alternative solutions to any deficiency in the location. Buying existing unit: In case a chemical unit is to be set up on a land, which was utilised in the past for any activity, investigations need to be carried out to assess the physical condition of the land. Discharge to the soil, levels of penetration of the discharge, condition of ground water, etc. need to be analysed. Reusability of an existing unit is mostly not viable as most chemical plant structures are highly customised. Time and cost factors related to demolition/modification, among others, which will affect the operation start-up date, have to be estimated in advance. Buy vs lease: The trend in the past for any large industry set-up has been to own the land or take it on a perpetual lease from the concerned State Governments industrial body. In recent times, many multinational organisations that realise the potential benefits of having a manufacturing unit in the country are considering an initial lease with buy-back options. While a financial analysis may prove that leasing out from a landlord will be more expensive than owning the land over a longer period, many multinational organisations are preferring a lease (or sub-lease in case of an Industrial Development Corporation land), if they are more or less testing the waters in new markets with respect to products manufactured from the particular facility. Special zones: Setting up a unit in Special Economic Zone (SEZ) or Export-oriented units (EoU) or Industrial Development Centre (IDC) is more or less a financial decision. Any organisation must scrutinise the financial benefits associated with these zones in terms or tax rebates, duty waivers and other factors vis--vis the business markets the particular unit will be catering to. What today might be more of an EoU may have a fair share of domestic sale in the next five years. Greenfield projects: Most contracts in the chemical industry are taken up by specialised engineering contractors. The degree of land development work required also has to be assessed. The type of land whether marshy or rocky will have implications in the pilings required and have a bearing on the construction timelines. Land orientation or dimensions will also play a part as many-a-time it is not possible for chemical units to spread out or reorient according to the land orientation. Mostly, a square or a well-proportioned rectangular site is preferred. This has to be arrived upon at an early stage as land availability vs required dimensions can be a challenging factor in many markets. Expandability: Very rarely will an organisation invest without plans for expansion. This being the case, an option of expandability is crucial. While ground coverage ratios are in play, it is important to foresee how much area-wise expansion is expected in a certain timeline. If expansion is highly sought-after, availability of adjoining land must be considered at an early stage as land may become scarce in future. Response centres: In case of fire or requirement of medical aid or infrastructure or if a quick response system is desired, government-owned industrial estates are best advised. In such situations, a dedicated body to approach in any emergency will be more readily available than in isolated standalone facilities. Approvals/permissions/land title: The approvals and permissions have to be sought in two perspectives. One is related to land & building, and the other will be related to the activity proposed. The land has to fall in the industrial use zone. With regard to chemical industries, there are further classifications based on the green, orange or red category the process falls under. Raw materials, processes, effluents and finished products will determine the category. Defining the ideal site Though land cost is one of the most important factors while determining the site for setting up of an industrial unit, for a chemical plant it is something that can come into play after various other mandatory criteria are met. An appropriate technical and financial analysis is what will lead one to the best possible site for a long-term set-up.

A company's location can be one of the biggest assets and contributing factors to its success. In the right location, companies can have access to a vibrant talent pool, target customers/audiences, key transportation systems, critical materials/supplies, and a thriving business environment. Therefore, developing a comprehensive and future-looking Site Selection Process is critical and needs to be aligned with the company's overarching strategy. Some of the key factors BLS reviews and develops during the site selection process include the following:

Feasibility Analysis: This analysis determines whether a company should pursue business relocation as a course of action. Assessment includes analyzing different operating costs and other factors associated with differ ent locations and determining what the major impacts associated with each alternative are. Infrastructure and Logistics Due Diligence/Analysis: This analysis reviews the sites and buildings space, and compare it against short term or long term needs. This analysis also reviews utility infrastructure (availability, cost, reliability) and transportation infrastructure (the evaluation of the transportation options and costs.)

Labor Market/Supply/Demand Analysis: This analysis reviews the prospective locations' ability to meet a company's short and longterm labor needs. We will assess the labor pool, in education/skill level, review unemployment and underemployment levels and evaluate labor market stress, among other factors. Preliminary Incentive Assessment and negotiation: Because economic development incentives are increasingly important to companies looking to offset some of the costs involved with large-scale deployments, we will integrate the incentives process early on in the overall site selection process. Cost of living: For a company considering a site selection strategy, it is important to understand the implications of not only the initial move, but the long term costs associated with maintaining a location within the community, for the company a nd its employees. Higher education presence: This review will illustrate potential talent pipeline for the company's future labor needs. In addition, higher education presence may have impact on certain industries including technology, research and development. Industry clusters: This analysis will examine a community's industry strengths, weaknesses and key clusters in the region. It will provide a company another measure, deciding to be closer to its competitors, customer base or both.