Choosing a Facility Location

Why Facility Location Matters

Choosing the right site for a new facility is a strategic decision that can affect profitability, growth, and competitiveness for years to come. A well‑chosen location reduces operating costs, improves supply‑chain efficiency, and gives you access to the talent you need.

Key Criteria for Site Selection

1. Cost Considerations

Land or lease price – Compare purchase versus rental rates in each market.
Total Cost of Ownership (TCO) – Include taxes, insurance, utility rates, and anticipated capital improvements.
Moving & set‑up expenses – Budget for equipment relocation, retro‑fitting, and permitting.

2. Infrastructure & Utilities

Reliable electricity, water, and gas supply.
High‑speed internet or fiber connectivity for IT‑intensive operations.
On‑site waste‑management and environmental compliance capabilities.

3. Labor Market and Talent Pool

Availability of skilled workers for your specific industry.
Average wage levels and labor‑union presence.
Proximity to training institutions or technical schools.

4. Regulatory Environment

Local zoning laws and land‑use restrictions.
Environmental regulations that could limit expansion.
Tax incentives, grants, or subsidies offered by municipal or state governments.

5. Logistics and Transportation

Access to major highways, rail lines, ports, or airports.
Distance to key suppliers and major customers.
Availability of freight services and loading docks.

Industry‑Specific Examples

Below are quick snapshots of how the above criteria play out in three common sectors.

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Manufacturing – Prioritize heavy‑duty power, proximity to raw‑material suppliers, and easy truck/rail access.
Warehousing & Distribution – Focus on highway proximity, ceiling height, dock count, and low property taxes.
Technology / R&D – Look for high‑speed internet, nearby universities for talent, and a business‑friendly tax environment.

Step‑by‑Step Checklist for Choosing a Facility Location

Step	Action	Tools / Resources
1	Define strategic goals (cost reduction, market access, talent, etc.).	Business plan template – https://mrdashboard.com/business-plan-template/
2	Create a weighted scoring model for each criterion.	Balanced scorecard and strategy map toolkit – https://mrdashboard.com/balanced-scorecard-and-strategy-map-toolkit/
3	Gather data on candidate sites (cost, utilities, labor pool, regulations).	Financial statements templates – https://mrdashboard.com/financial-statements-templates/
4	Score each site and compare total TCO.	Excel long‑tail keyword generator – https://mrdashboard.com/excel-long-tail-keywords-generator/
5	Conduct site visits and validate assumptions.	Small business growth strategy pack – https://mrdashboard.com/small-business-growth-strategy-pack/
6	Finalize decision and negotiate lease/purchase terms.	Finance profit growth toolkit – https://mrdashboard.com/finance-profit-growth-toolkit/

Tools & Templates to Streamline Your Decision

Leverage these free resources to add rigor to your site‑selection process:

Business Plan Template – Align facility goals with overall strategy.
Small Business Growth Strategy Pack – Identify growth drivers and funding needs.
Financial Health & Profit Boost Strategy Pack – Model cash‑flow impacts of each location option.
Balanced Scorecard & Strategy Map Toolkit – Create a visual scoring matrix.

Ready to Make the Right Move?

Start applying these guidelines today with our free Business Plan Template. A solid plan gives you the confidence to negotiate terms, secure financing, and launch a facility that fuels long‑term success.

Suggested tags: Facility Location, Site Selection, Operations Management

Suggested category: Operations