Site Selection and Layout Planning

1. Site Selection and Layout Planning CH 9

2. 9.1 Objectives • List the factors involved in deciding on a community in which to locate a business. • Identify the factors to consider when selecting a business site. • Describe the resources that can be used in finding potential business sites. • Explain the steps involved in analyzing potential sites for a business and choosing between those sites. • Describe the advantages of starting a business at home or in an incubator.

3. Factors in Community Selection As an entrepreneur, the decision of where to locate your new business is an important one. A location can determine who sees your business and how easily customers can get to it. Factors to consider when selecting a community include: • economic base • financial incentives • population makeup • labor supply

4. Is the Economic Base Favorable? • ECONOMIC BASEthe major industries that provide employment in an area • First, you should determine the community’s economic base • That base can be either primarily industrial or primarily service-oriented • What is major source of income in a community? • Is it industrial, service oriented or some other • source of income? • Is this income growing or shrinking?

5. Are There Financial Incentives? • incentivea reward or advantage that helps businesses, including lower taxes, cheaper land, and employee training programs • A community may try to attract new businesses to locate there by offering a special incentive. • Incentives include: Lower taxes, cheaper land and employee training programs.

7. What Is the Makeup of the Population? Trends such as aging populations or young families can affect businesses. These trends determine who will spend, how much they will spend, and what types of products or services they will want. Demographics and population size can tell you if a location matches your target market.

8. What Is the Makeup of the Population? CENSUS TRACTa small geographic area into which a state or country is divided for the purpose of gathering and reporting census data. Access the Census Bureau’s Census 2010 Web site to research the demographics of a census tract that interests you.

9. Does the Labor Supply Match Your Needs? • When considering a community, consider your labor needs and how well the local labor pool meets those needs. Business owners need to consider: • how many employees they need • If the labor pool meets their needs • if the available pool has the appropriate skills

10. Criteria for Site Selection Once you determine that a community is suitable for your business, you can begin looking at sites. The factors to consider and the criteria used to judge sites vary with the type of business activity

11. Retail Business Considerations • Retail businesses need to determine their trade area in order to be accessible to their target market. • trade areathe region or section of the community from which a business draws customers

12. Retail Business Considerations • Once you pinpoint a community you want to serve and determine your business’s trade area, examine these issues: • number and size of competing businesses • nature of the competition • character of the area • accessibility and traffic

13. Service/Wholesale Business Considerations Service and wholesale businesses have similar needs to those of retail businesses. However, many service and wholesale businesses do not have customers coming to their business sites and do not need expensive, high-profile locations.

14. Manufacturing/Extraction Business Considerations • Manufacturing/extraction businesses need to be accessible to sources of supply and transportation and are subject to local zoning laws. • INDUSTRIAL PARKan area set aside in a community for industrial use • usually located close to major transportation routes.

15. E-Business Considerations Location and space are not major considerations for an e-business because electronic business sites can be located almost anywhere and require little space. However, larger operations need more space for equipment, personnel, and shipping.

16. Locating Potential Sites There are a number of ways to locate potential business sites. • Read the classified sections of newspapers. • Consult with realtors who specialize in business properties. • Conduct visual surveys by driving through prospective communities. • Network with personal or business contacts.

17. Site Analysis and Decision Making Once an entrepreneur identifies possible sites for a business, he or she must consider three things before making a decision: • the surrounding area • the building • the costs of buying, building, or leasing

18. Surrounding Area Analysis Surrounding areas should be evaluated by the same criteria used for site selection: • number and size of competing businesses • nature of the competition • character of the area • accessibility and traffic

19. Building Evaluation The building must be large enough to take care of present needs and to allow for expansion. Check the building’s interior to see how it meets your needs and the exterior’s construction, soundness, appearance, and parking.

20. Lease, Buy, or Build? Most experts say that leasing is best for a beginning business. • Leasing limits liability • Leasing has the least amount of start-up costs • Leasing costs are tax deductable • However, buying or building is least expensive for a long-term investment

21. Making Your Decision For each of the possible sites, compare these variables: • cost • advantages and disadvantages • desirability

22. Alternative Sites • Two sites that do not fit the traditional mold are the home-based business and the incubator. • INCUBATORan enterprise that is set up to provide flexible and affordable leases, office space, equipment, management assistance, mentoring assistance, and access to financing for new businesses

23. Layout Planning • 9.2 OBJECTIVES • List the steps in layout planning that are common to all businesses. • Describe the layout needs for each type of business. • Discuss the final details of layout planning.

24. Physical Layout • A well-planned layout can mean a more efficient operation, a more appealing sales floor, and greater customer convenience. • LAYOUT a floor plan or map that shows the interior and exterior arrangement of a business, including such items as display cases, lighting fixtures, traffic patterns, landscaping, and parking spaces

25. Physical Layout Six Steps in Layout Planning Define the objectives of the facility. 1 2 Identify the primary and supporting activities that will take place. 3 Determine access, arrangement, and flow among the activities. 4 Determine space requirements for all activities. 5 Design alternative layouts for the facility. 6 Evaluate the various layouts and choose one.

26. Layout Needs and Possibilities Although the steps in layout planning are the same for all businesses, the options and considerations are not. Different types of businesses have different operational needs.

27. Manufacturing Businesses production processes production sequence Layout Considerations for Manufacturing Businesses space requirements materials flow environmental needs control

28. Manufacturing Businesses Types of Manufacturing Layouts product layout product layout fixed-product layout fixed-product layout process layout process layout

29. Manufacturing Businesses In a product layout, all machines and supporting activities are arranged along a product flow line. As products come down the line, something is done to them at each workstation. • WORKSTATION an area in a business with equipment for a single worker

30. Retail Businesses products to be sold projected clientele sales per square foot of selling space Retail LayoutConsiderations aisle exposure sales value of area within store product coordination

31. Wholesale Businesses • When planning the layout of a wholesale business, storage and space utilization are the most important considerations. • When planning for storage, follow these guidelines: • Store popular items near shipping points. • Store items together that were received together and will be shipped together. • Provide a wide variety of storage space. • Assign storage space on the basis of handling ease and popularity.

32. Service Businesses The physical layout of a service business depends largely on the specific service it provides. There is no prescribed set of guidelines or patterns for these enterprises.

33. Extraction Businesses Like service businesses, extraction firms have unique layouts. They share a few common features: an office area, storage areas for equipment and supplies, and the extraction business site itself.

34. E-Businesses The layout of an e-business depends on its site and its operations. If the e-business ships products, storage and shipping areas are needed.

35. The Components ofan Effective E-Commerce Site The Internet has developed into an enormous consumer network with many e-commerce sites. A successful e-commerce site incorporates good content and design, offers credit card processing, and has a security certificate.

36. E-Commerce Site • payment gateway software that automatically processes credit-card information so that it does not have to be manually typed in • real-time transaction: a process that instantly transfers funds from buyer to seller • security certificate: a credential issued by a third-party company that assures the user that all transactions made on a Web site are private and safe • sticky content: the information and features on a Web site that gives users a compelling reason to visit it

37. Finishing Touches Once a business owner chooses a particular layout, he or she can begin planning the finishing touches. Such details include planning interior design features, as well as alterations or improvements to the facade. • FACADE the face or front of a building

38. Planning for Office Space • You have two options to consider when planning office space: • open office layout: best if cost, space, employee supervision, or access to files and equipment are important • closed office layout: if privacy and noise reduction are of primary concern

39. Planning for Office Space • You can define the traffic patterns of an office space with appointments. • APPOINTMENTS the furniture, equipment, and accessories contained in a building