Final answer:
Capital-intensive businesses require significant investments in money, equipment, land, and resources to begin and run their operations, demanding considerable amounts of investment capital and a focus on long-term cost savings.
Step-by-step explanation:
Businesses that require substantial amounts of money, equipment, land, and other material resources to initiate and sustain operations fit the description of capital-intensive businesses. This type of business demands significant upfront investment capital, which can come from various investors, including wealthy individuals, groups of shareholders, banks specializing in investment capital, and venture capitalists.
Larger considerations like land cost, capital availability, and the choice of production technology are quintessential in deciding business operations and locations. Capital-intensive businesses often involve heavy machinery, large-scale infrastructure, and significant amounts of financial resources to purchase and maintain these assets. When comparing production technologies, these businesses lean towards those investments which offer long-term savings on total costs, even if it requires more initial capital.
Factors like local property prices, availability of adequate facilities, and potential spatial diseconomies of scale due to location also influence the decisions in setting up capital-intensive ventures. An industrial site location analysis is a crucial step that takes into account these factors for achieving profitability.