Business Location Guide: Find the Perfect Spot for Success

1. Locate and Set Up Your Business 8.1 Choose a Location 8.2 Obtain Space and Design the Physical Layout 8.3 Purchase Equipment, Supplies, and Inventory

2. Lesson 8.1Choose a Location Goals • Identify options for locating a retail business. • Discuss factors to consider when choosing a location for a nonretail business. • Identify the benefits of locating a business online. • Describe steps to take in selecting a site. Chapter 8

3. Vocabulary • industrial park • enterprise zones • e-commerce • trade area Chapter 8

4. Locating a Retail Business • The right location for your business depends on: • the kind of business you plan to operate • the type of customer you want to reach • Also consider whether you will have • inside sales • outside sales Chapter 8

5. Downtown Areas • Positive features of a downtown location include: • easy accessibility • convenient access for downtown workers Chapter 8

6. Negative features of a downtown location include: • higher crime rate • traffic jams • a lack of • free or convenient parking • customers in the evening Chapter 8

7. Neighborhood Shopping Centers • consist of 3 to 15 stores • good for stores selling goods or services that people need to purchase frequently • rent is usually low • convenient for local shoppers Chapter 8

8. Community Shopping Centers • larger than neighborhood centers • serve residents from many neighborhoods • large anchor stores can increase customer traffic Chapter 8

9. Regional Shopping Centers • designed to attract customers from an entire region • have 40 to 100 stores • anchored by two or more large department stores • focus on apparel • rents are high Chapter 8

10. Super-Regional Shopping Centers • largest classification of shopping centers • more than 100 stores • anchored by three or more department stores • very high rents • not recommended for new businesses Chapter 8

11. Stand-Alone Stores • may be located just outside of shopping centers or far from other businesses • depend on drive-by traffic • less expensive rent • advertising is often necessary Chapter 8

12. Warehouses • among the cheapest rent • few frills • often charge customers lower prices • heavy advertising required Chapter 8

13. What are the main options for locating a retail business? Chapter 1

14. Locating a Nonretail Business • Service Businesses • If offering an inside service, location is very important as customers will visit the business. • restaurants or hair salons • If offering an outside service, location is less important as customers will not visit the business. • plumbing or carpet cleaning Chapter 8

15. Industrial Businesses • Manufacturing and wholesale companies ship their products directly to customers. • do not rely on customer traffic • industrial park • a section of land that is zoned exclusively for industrial businesses • space is less expensive Chapter 8

16. enterprise zones • areas that suffer from lack of employment opportunities • businesses can qualify for favorable tax treatment depending on the number of jobs they create Chapter 8

17. Home-Based Businesses • Benefits of home-based businesses include: • cost savings • more freedom • convenience • Challenging aspects of home-based businesses include: • lack of space can limit expansion • it can be hard to separate business and family life • a feeling of isolation can arise Chapter 8

18. What are some of the factors to consider when selecting a location for a nonretail business? Chapter 1

19. Starting a Virtual or Online Business • e-commerce • buying and selling products or services over the Internet Chapter 1

20. Benefits of Virtual or Online Businesses • an immediate presence • business costs are less • a global customer base is possible • time restrictions are not a problem • can electronically manage information about customer behavior Chapter 1

21. Virtual or Online Business Precautions • Buy your own domain (web address). • Use a creative website design that appeals to customers. • Be sure your website has a fast loading speed. • Keep your website current. Chapter 1

22. What are some benefits of having a virtual or online business? Chapter 1

23. Selecting Your Site • trade area • the area from which you expect to attract customers • identify the location of • competitors • businesses that would attract a similar customer base but that would not compete directly with you Chapter 8

24. Location Type and Availability • Determine which type of location is best for your business. • Determine what spaces of this type are available in your trade area. Chapter 8

25. Evaluate the Location • Factors to consider when picking a location include: • safety • attractiveness • Does the location attract your target market? • Is parking adequate? • Are surrounding businesses thriving? Chapter 8

26. What are some of the factors you should consider when selecting a site for your business? Chapter 1

27. Lesson 8.2Obtain Space and Design the Physical Layout Goals • Compare purchase and lease options. • Describe layout considerations for different types of businesses. Chapter 8

28. Vocabulary • tenant • landlord • gross lease • net lease • percentage lease • visual merchandising Chapter 8

29. Lease or Buy Space • Buying advantages include: • You can receive a tax deduction on the loan interest for the building. • The loan payment may be no larger than a lease payment. Chapter 8

30. Disadvantages of buying include: • Most entrepreneurs lack the money to purchase property for their business. • You are locked into a specific location. • You are responsible for building maintenance costs. Chapter 8

31. Commercial Leases • tenant • the person who pays rent to occupy the space owned by someone else • landlord • the person who owns and rents out the building or space Chapter 8

32. There are three types of commercial leases. • gross lease • tenant pays monthly rent • landlord pays property expenses • net lease • landlord pays building insurance • tenant pays rent, taxes, and other expenses Chapter 8

33. percentage lease • the tenant pays a base monthly rent • the tenant also pays a percentage of monthly revenue as rent • most common for prime retail locations Chapter 8

34. You should always consult with an attorney before signing a commercial lease. Chapter 8

35. Compare Costs of Doing Business • When deciding where to locate your business you should calculate how much rent you will pay per customer. • Rent per customer = Rent per month ÷ customers per month Chapter 8

36. Chapter 8

37. Name three kinds of commercial leases. Chapter 1

38. Design the Layout of Your Business • Your layout needs to include space for: • employees • customers • merchandise • equipment • restrooms • stockroom/storage • offices Chapter 8

39. Create the Floor Plan Chapter 8

40. Layout of a Retail Business • visual merchandising • the process of combining products, environments, and spaces into an appealing display to encourage the sale of products or services Chapter 8

41. The goal of your layout should be twofold: • It should attract customers to your store and keep them coming back. • It should meet the needs of your business. Chapter 1

42. Layout of a Service Business • For businesses where customers visit the site, the layout should be considered as carefully as a retail business. • As customers do not visit on-site service businesses, organization of supplies should be the focus of the layout. Chapter 8

43. Layout of a Wholesale Business • focus on price and quality • Layout should be efficient and well-organized to facilitate shipping and receiving. Chapter 8

44. Layout of a Manufacturing Business • The layout should facilitate the production process. • Work teams should be close together. • Supervisors should be in close proximity to the people they supervise. Chapter 8

45. Exits should be clearly marked and easily accessible. • Hazardous materials should be safely stored. • Equipment and machinery should be positioned in a way that minimizes the potential for accidents. Chapter 8

46. What are the major considerations for choosing a layout for a business? Chapter 1

47. Lesson 8.3Purchase Equipment, Supplies, and Inventory Goals • Explain how to find and choose vendors for your business. • List factors that determine the needed level of inventory. Chapter 8

48. Vocabulary • inventory • vendors • quote • reorder point Chapter 8

49. Obtain Equipment and Supplies • inventory • the products and the materials needed to make the products that a business sells to its customers • When starting a business, order the minimum quantity you need right now. Chapter 8

50. Chapter 8