There are three primary influences on a business's location: proximity (to market, labor, materials, and competitors), the nature of the business activity (retail, service, or manufacturing), and the impact of the internet. Getting these factors right is crucial for business effectiveness.

Proximity is about how close a business needs to be to its market, labor, materials, and competitors. For example, a fish-and-chip shop needs to be close to its customers, while a graphic designer does not. Businesses also need to consider proximity to skilled labor, raw materials for cost savings, and sometimes even competitors, as profitable locations often attract multiple businesses.

The type of business activity (retail, service, or manufacturing) significantly impacts location decisions. Retail businesses like Starbucks often locate in busy areas to be close to customers, contending with competitors. Service businesses may or may not need to be close to customers, depending on the service. Manufacturers often prioritize proximity to raw materials and labor, locating in industrial estates with good infrastructure.

The internet has revolutionized business location, with e-commerce making physical premises less essential. Operating online offers benefits like low costs, access to a global market, 24/7 availability, and flexible hours. Many new businesses opt for an online-only presence, while others adopt a 'bricks and clicks' approach, combining online and physical stores to leverage the advantages of both, as exemplified by Nike.