Track: Operations Management and Operations Research

Abstract

SMMEs are rivers of the economic growth in many countries. In South Africa they play a strategic role of mediating the triple challenge of poverty, unemployment, and inequality. However, many SMMEs stop to exist within the first five years because of diverse challenges which they face regularly. Numerous SMMEs owners/managers do not pay attention to the importance of location decisions, yet a business location decision can dramatically impact the performance and survival of a business. Several factors affect a location decision, which either provide a positive or negative outcome on a business performance. The objective of this study is to investigate the location factors that may affect location decision and how these factors affect the performance of SMMEs. The results of the study shows that positive relationships existed between electricity affordability, customer flows, safe and healthy area and the dependent variable (business performance). Affordability of Electricity tariff attained the strongest positive relationship; showing that business owners/managers consider electricity fees as an important factor to observe when searching for suitable business premises. This study provides SMMEs owners and managers with empirical evidence that location factors indeed affect location selection, hence the business performance.