Any business enterprise, firm or industry is located where it is convenient and economical, as the entrepreneur has to aim at maximizing profits out of that location. The location of a business enterprise or firm is thus influenced by the following locational factors.

Raw Materials availability :- many manufacturing firms tend to be located near sources of raw materials so as to minimize transport costs of delivering the raw materials. Industries heavily attracted to raw material sources are called raw material oriented industries.

Market:-Location of a business enterprise may also be a function of market availability and accessibility. If the product is heavy or bulky, then the processing industry may have to be located near the market to ease transport to the market. These are termed market oriented industries.

Sources of power and fuel:- Power and fuel are influential factors in industrial location especially where production is highly mechanized. Some plants need a lot of power for their operations and may tend to be located near power sources, although since power is mobile, this factor may have limited influence on location. Industries, which are highly attracted and located near power sources, are termed " power oriented" industries.

Transport and communication; cheap and quick transport is necessary to facilitate movement of raw materials to the factory and finished goods to market, transport is also needed for movement of staff and equipment as much as communication is equally vital. Therefore most businesses tend to be located near good transport and communication infrastructure, hence transport oriented industries.

Labour supply:-Labour as a factor of production may have some importance in locating an industry. Cheap unskilled labour is in most cases immobile such that industry or firm which requires much unskilled labour should be established where the labour is abundant,. Since labour oriented industries aim at reducing labour costs hence total costs of production.

Nature of the product:- Industries dealing in highly perishable products influence location towards the market. This is to ensure that the products are consumed as fast as they are produced to avoid wastage and spoilage.

Accessibility to Commercial centres. Nearness to financial institutions and social service like health centres, recreational facilities etc is important for location of any industry or business enterprise. Such services are vital and many firms will tend to locate within close proximity to them

Political Climate; Stable political atmosphere attracts both local and foreign investors to locate business in a particular place or area. Political instability would scare off investors from locating their business firms in such area.

Government policy:- Government could influence the location of industries in some areas by providing subsidies and tax holidays to investors locating their business firms or industries in those areas.

Industrial inertia:- Many firms and industries tend to be located where others have already existed, so that they can enjoy economies of concentration. ( economies of scale) . These include already existing infrastructure like roads, schools, medical centres, labour etc. This leads to localisation.

There is need for the basic infrastructure like schools

Cost of land and room for expansion:- One reason why there are no industries in the centre of any major city or town is that land there is very expensive . Industries therefore tend to be located in the suburbs where land is fairly cheaper.

Climatic factors:-Good climate for settlement and raising of crops and animals may also attract the location of an industry or business firm in a particular area. Harsh climate could discourage industries or business location in an area;-

Topography:- Steep rugged landscape or easily flooded area that poses difficulty to construction will discourage location of industries and vice versa.