In contrast to soft location factors hard location factors constitute quantifiable data about a city or municipality which is reflected in the company’s expenses. Due to their measurability they can directly be involved into location analysis. Hard location factors are of great importance regarding inclusion or continuation of a company’s operating activity, as they determine the economic capacity and sustainability of business locations.
Hard location factors can be systematised according to procurement, sales and production-related factors. The most important hard location factors include:
- Infrastructure (transport connection, communications network as broadband availability)
- Labour market (e.g. qualifications of labour, unemployment, labour costs)
- Building areas and commercial properties (rental and land prices, availability)
- Procurement source and markets (local industries)
- Local taxes and duties (e.g. level of land tax, level of business tax)
- Subsidies and funding programs
- Retail purchasing power
- Research institutions
Finally, the choice of the most essential location factors for a company depends on a variety of determinants, such as industry, intention of project, requirements and needs. Every company has to face this question individually and in advance. In any case, a business location should at least fulfil the essential criteria which are specifically relevant for a company.