Because little research has been done on the selection of business locations from the perspective of SMEs, this research aims to identify the determinants that influence the decision of SMEs when selecting a business location for their business activities. The research was conducted using a survey questionnaire to identify the factors influencing SME owners' decision about their business location. This article analyzes surveys of 251 respondents who are SME owners in Malaysia to explore the determinants of being a property occupier.
The commonality of the determinants was categorized across different real estate sectors, such as office buildings, commercial retail lots, retail, residential units for commercial purposes and industrial properties. Analyzing the importance of these criteria, the findings showed that the main determinants of SMB owners are largely focused on real estate characteristics, followed by service characteristics, location characteristics, affordability characteristics and developer characteristics.
- Research Background
- Problem Statement
- Research Questions
- Research Objectives
- Significant of Research
As such, the nature of the business will influence the decision of SME owners to choose a business premises. The aforementioned factors will be investigated if they are related to the decision-making process of SME owners. What are the most influential factors and the least influential factors that will influence the decision of SME owners regarding the choice of business premises.
Among the independent variables, which attributes have the most important relationship that will influence SME owners when choosing a business space. To determine the level of importance of the identified factors for SME owners when choosing a business premises.
- Introduction
- Small and Medium Enterprises
- Purchaser’s Buying Behaviour
- Consideration factors for SMEs in choosing a business premise
- Affordability Attributes
- Location Attributes
- Property attributes
- Services Attributes
- Developer Attributes
In addition, the reputation of the company or industrial park can be another contributor to choosing a business premises. Most of the researchers concluded that location is the key factor for office space (Mazzarol & Choo, 2003; Škevin, 2011). Price is one of the most important factors that SME owners will consider when choosing their business premises, be it new acquisition or leasing of the property.
The basic offer, including banks, public transport, restaurants and grocery stores, is also one of the decisive factors in the choice of business premises for SME owners. The purchasing behavior of SME owners can be influenced by their personal factors and property characteristics.
- Introduction
- Research Procedure
- Research Framework
- Hypotheses Development
- Population
- Sampling
- Data Collection Tool
- Data Presentation Instruments
- Factor Analysis
- Regression Analysis
- Relative Importance Index
In addition, we have preliminary reviews on the level of importance of each factor and will be able to build a construct for the final research paper to compare with the literature reviews. The self-completed questionnaire will be distributed to the respondents after the pre-testing of the questionnaire. All data collected from the survey questionnaire will be collected and entered into SPSS software.
Therefore, a structured questionnaire will be developed and administered to the respondents, in order to identify the main criteria that the SME owners consider when making decisions to choose a business premises. Hence, the research population of this survey will be SME owners in Malaysia regardless of any region or states. For the purpose of this research, 250 SME owners will be randomly selected for the survey.
SME owners through a group of business networks composed of entrepreneurs will be randomly selected to answer the questionnaire. To collect primary data, a closed-ended structured questionnaire with multiple possible answers will be prepared, which will be used according to the sample of respondents selected for the research. The data collected is expected to show that the factors or properties of the property are significantly related to the choice of business premises of SME owners.
Therefore, we must test whether it is assumed that any changes in Y (site selection decision) are related to changes in X (affordability characteristics), which means that we must prove that if the acquisition or rental price of the property is high, selection decision (Y) will positively be influenced. Next, the data collected from the survey will be analyzed and the relative importance of independent variables will be calculated. Then the most important criteria or determining factor will be revealed and ranked based on their contribution to Relative Importance Index (RII).
- Introduction
- Descriptive analysis on respondents’ demographic profile
- Factor Analysis
- Regression Analysis
- Relative Importance Index
From the collected data, as shown in Table 4.2, we can conclude that all respondents were SME owners. As discussed in the literature review in Chapter 2, several factors were identified that SMEs consider when choosing business premises, so there are six variable factors and the parameters are drawn (Table 4.4) according to their characteristics in order to carry out the research . I choose this place for my business because it is close to my suppliers. It is important for my space to be located near my clients and business partners. My business premises must be close to key population areas.
Bartlett's Test of Sphericity also yielded the statistical significance value of 0.000 (Table 4.5), where the P value is less than 0.05 (P<0.05), indicating that the correlations between items were sufficiently large to allow for factor analysis. feed. Apparently, the majority of respondents, which is almost 60% (from Table 4.9), did not prefer their business premises to be located near government buildings, only 6.8%. The minimum (min), maximum (max), mean, and standard deviation results for both models were as shown in Table 4.10 and Table 4.11.
The model summary and ANOVA results in Table 4.12 and Table 4.13 showed that the R-squared and adjusted R-squared values were 29.2% and 26.8%, respectively, for commercial properties and 58.2% and 55.9%, respectively, for industrial properties. According to the results in Table 4.16, all five independent variables were statistically significant in the premise selection decision. According to the results, as summarized in Table 4.18, the highest-ranked factor that influenced the decision to choose premises based on business characteristics is the attributes of the real estate, hypothesis (H3) was accepted.
Subsequently, service attributes were the highest ranked factor influencing the choice of starting point in the context of grouped industrial properties. The hypothesis (H4) was accepted as shown in Table 4.19. Second, ownership characteristics will influence the decision when selecting a business premises and this finding is consistent with the study by Sanderson et al. After calculating the Relative Importance Index (RII) as shown in Table 4.20, we can confirm that the results in relationship to the importance level for each factor generated from both the factor analysis and the RII are identical except that similar values have been produced under RII (Good safety and security services, size of premises, good hygiene facilities and close proximity to commercial shops and stores ), where they finished in fourth and eighth place respectively.
Introduction
The results showed that the hypotheses about location and property characteristics were supported and had a significant impact on the SME owner's decision when choosing commercial real estate. On the other hand, three hypotheses were accepted about location attributes, property attributes and service attributes, which significantly influence the decision of an SME owner when choosing an industrial property. Obviously, the accepted hypotheses coincide with the results obtained in the factor analysis and relative importance index, which shows that the choice of business premises of the SME owner is strongly influenced by property attributes, service attributes and location attributes.
Achieving of Objectives
In contrast, SME owners in Malaysia paid less attention to the locational attributes of proximity to government offices, recreational and sports facilities, logistics hubs, warehouses, and were less likely to pay more to occupy a premises, even if it is built by a reputable developer. With these results, we achieved our second research objective by ranking the identified factors according to the degree of importance using the Relative Importance Index. Together with the results from factor analysis, both analyzes yielded similar results in terms of the ranking of determinant factors.
We can conclude that the data collected and the analysis was carried out correctly, as the results confirmed that the rankings were accurate. From the results of the study, the regression analysis showed that the hypotheses about location attributes and property attributes were accepted, as both independent variables are significantly related to the decision of SMEs on the choice of premises when choosing commercial real estate. In terms of industrial characteristics, location attributes, property attributes and service attributes were found to be significantly related to SMEs' premises selection decision.
Furthermore, there are mutual similarities between the two commercial and industrial properties, where the hypotheses of affordability and developer characteristics were not supported and did not have a significant relationship in making a decision on the choice of premises.
Implications
The findings of this study can be useful for property developers, urban planners and landlords in Malaysia. The identified determinants and analyzes can serve as a basis for future research, and the purchasing behavior of SME companies can be evaluated to gain further insight into future development projects and the development of future city development plans. Real estate developers should now consider the degree of importance of each determining factor when developing plans for their new construction projects.
Limitations and Recommendations
Factors Influencing Tenants' Decision to Occupy Office Buildings in Kuala Lumpur City Center - A Delphi Study. Riga's class A and B+ office space: An analysis of the main factors determining consumer choice. Store Location Selection Multiple Analytical Hierarchy Processes Problem for Decision Making in Turkey.
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Key factors for the success of investments in shopping centers on the example of the Polish commercial real estate market.
