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

Lesson 8.1 Choose a Location Learning Objectives 8.1-1 Identify options for locating a retail business. 8.1-2 Discuss factors to consider when choosing a location for a nonretail business. 8.1-3 Identify the advantages and disadvantages of having a business online. 8.1-4 Describe steps to take in selecting a site. Chapter 8

Essential Question How do you decide where to locate your business? Khoa Phan – video animator for vine/twitter Can run his business from home. Started promoting his videos when twitter purchased vine. The type of media he created can be used for marketing Chapter 8

Good locations come at a price, questions to consider What are types of jobs that require expensive locations What are types that don’t require expensive locations What goes into the price of a location? If you build it will they come? Is your business “inside sales” or “outside sales? Chapter 8

Locating a Retail Business Downtown Areas (usually central) not Miami which makes it difficult. Issues: crime, traffic, parking, less customers at night Neighborhood Shopping Centers (strip mall) Issues: lack of reach Community Shopping Centers(town & country) have anchor stores like Walmart, kohls – issues might be bad anchor store or higher rent Chapter 8

Locating a Retail Business cont. Regional Shopping Centers (malls) Issues: high rent, too distant for convience, mall rules and times. Super-Regional Shopping Centers (mega malls) malls of American Minnesota 500 stores Issues: travel too far, not good for small business Stand-Alone Stores (auto places) Warehouses (furiniture or appliance dealers Chapter 8

Locating a Nonretail Business Service Businesses Sometimes have same consideration as the retail stores i.e. restaurants. Industrial Businesses Industrial park: Section of land that is zoned for industrial businesses only Enterprise zones: Areas that suffer from lack of employment opportunities (so they incentivize these areas with tax breaks) Chapter 8

Locating a nonretail business Home-Based Businesses Cost saving More freedom (from leases for example) Convenience (hours, cloth, no commute) Can save and grow a business Disadvantage: Limited space Lack of separation work/life isolation Chapter 8

Starting a Virtual or Online Business E-commerce Buying and selling products or services over the Internet What are good examples? Do we know anyone who has this? Chapter 8

Starting a Virtual or Online Business (continued) Advantages of Virtual or Online Businesses Quick and easy setup Cost savings Large customer base No time restrictions Ease of data collection Chapter 8

Starting a Virtual or Online Business (continued) Disadvantages of Virtual or Online Businesses Special expertise needed Internet downtime Security breaches Old fashion views Or the need of trials Chapter 8

Starting a Virtual or Online Business (continued) Virtual or Online Business Precautions Do not use free web space. Buy it. Use a creative website that appeals to customers. Be aware of the loading speed of your website. Don’t leave outdated information on your website. Chapter 8

Selecting Your Site/location Buy a map and highlight your trade area Trade area The geographic area from which you expect to attract a majority of your customers Highlight appropriate area in one color and competition in another. Location Type and Availability Evaluate the Location Chapter 8

BBQ Story Things you got to think about? Explain why jimmy t’s rib house failed. Chapter 8

ASSESSMENT 8.1 Why is rent lower in strip malls vs regular malls? Has advancements in technology made it easier to work from home? If so how? Why would you highlight your competitors in a trade map? Chapter 8

Lesson 8.2 Obtain Space and Design the Physical Layout Learning Objectives 8.2-1 Compare purchase and lease options. 8.2-2 Describe layout considerations for different types of businesses. Chapter 8

Essential Question What should you consider before obtaining property and designing layout. Store layout issues example: the cloth store that changed the cash register to the back to free up some space. What do you think happen? Chapter 8

Lease or Buy Space Commercial Leases Tenant: The person who pays rent to occupy space owned by someone else Landlord: The person who owns and rents out buildings or space Chapter 8

Lease or Buy Space (continued) Commercial Leases (continued) Gross lease: The tenant pays rent each month for the space occupied, and the landlord covers all property expenses for that space, such as property taxes, insurance on the building, and building maintenance. Chapter 8

Lease or Buy Space (continued) Commercial Leases (continued) Net lease: The landlord pays building insurance, and the tenant pays rent, property taxes, and any other expenses. Percentage lease: The tenant pays a base rent plus a percentage of revenue each month. Chapter 8

Compare Costs of Doing Business Compare rents by figuring out the rent per customer. Rent per month /(divided by) projected customer traffic per month Sometimes the rent is higher but the rent per customer is better due to better traffic Chapter 8

Design the Layout Create the Floor Plan (measure everything) measure twice cut once 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 Ways to send a good message: good lighting, think about window display (new vs seasonal), make entrance inviting, leave at least 4 feet aisle space, organized, attractive in store displays, use wall space wisely, cash register location is important Chapter 8

Layout of a Service Business (home vs away) The layout for service business that need customers to go to your business ie restaurants are different than travel service business. Retail types like restaurants need to be treated like retail but space is even more important On site service need to worry more about organization layouts Chapter 8

Layout of a Wholesale Business Locate in a one story warehouse Keep merchandise close to the shipping dock Store popular items in accessible locations Secure areas for any size merchandise Keep walkways free of merchandise Store items safely: i.e. don't stack too many items Chapter 8

Layout of a Manufacturing Business Work team areas should be situated close to each other Supervisors should have good views of workers Exits should be clearly marked Hazardous material should be stored carefully Equipment should be positioned for productivity and safety Chapter 8

Sample Floor Plan Chapter 8

Assessment 8.2 Of the type of leases we discussed what is they type you would prefer and why? Why draw a floor plan before you set up shop? What is the better rent per customer Downtown rent per month $1,200 with traffic of 9,500 per month or strip mall of rent $2,800 with 18,000 traffic per month? Chapter 8

Lesson 8.3 Purchase Equipment, Supplies, and Inventory Learning Objectives 8.3-1 Explain how to find and choose vendors for your business. 8.3-2 List factors that determine the needed level of inventory. Chapter 8

Essential question What should you consider when selecting vendors and purchasing inventory? Chapter 8

Obtain Equipment and Supplies Inventory The products that a business sells to its customers as well as the materials needed to make those products Identify Suppliers Vendors: Companies that sell products and services to businesses Evaluate Proposals Quotes: estimate of the price for merchandise or service Chapter 8

Sample Supply Needs Chapter 8

Purchase Inventory Purchase Inventory for a Startup Business Purchase Inventory for an Ongoing Business Reorder point: A predetermined level of inventory that signals when new stock should be ordered Chapter 8

Chapter 8