PowerPoint Presentation by Charlie Cook The University of West Alabama Copyright © 2006 Thomson Business & Professional Publishing. All rights reserved. Part 3 Developing the New Venture Business Plan The Location Plan

Copyright © 2006 Thomson Business & Professional Publishing. All rights reserved. Student 9–2 Looking Ahead After studying this chapter, you should be able to: 1. Describe the five key factors in locating the brick-and- mortar startup. 2. Discuss the challenges of designing and equipping a physical facility. 3. Understand both the attraction and the challenges of creating a home-based startup. 4. Understand the potential benefits of locating a startup on the Internet.

Copyright © 2006 Thomson Business & Professional Publishing. All rights reserved. Student 9–3 Brick-and-Mortar Location Factors Customer accessibility is a key factor in the location decision of retail and service businesses. Climate, competition, legal requirements, and the tax structure are types of environmental factors affecting the location decision. Availability of resources such as raw materials, labor supply, and transportation are important to location decisions. The entrepreneur’s personal preference is a practical consideration in selecting a location. An appropriate site must be available and priced within the entrepreneur’s budget.

Copyright © 2006 Thomson Business & Professional Publishing. All rights reserved. Student 9–4 Designing and Equipping a Physical Facility The ideal building is practical, not pretentious. The general suitability of a building depends on the functional requirements of the business. The comfort, convenience, and safety of the business’s employees and customers must not be overlooked. Most small manufacturing firms must use general- purpose equipment, although some can use special- purpose equipment for standardized operations. The cost of special-purpose equipment is high, and it has little or no resale value because of its highly specialized function.

Copyright © 2006 Thomson Business & Professional Publishing. All rights reserved. Student 9–5 Designing and Equipping a Physical Facility (cont’d.) Small retailers must have merchandise display racks and counters, mirrors, and other equipment that facilitate selling. Display counters and other retailing equipment should create an atmosphere appropriate for customers in the retailer’s target market. Entrepreneurs must select office equipment that reflects the latest advances in technology applicable to a particular business.

Copyright © 2006 Thomson Business & Professional Publishing. All rights reserved. Student 9–6 Home-Based Startups Home-based businesses are started to both make money and incorporate family lifestyle considerations. Operating a business at home can pose challenges, particularly in the areas of business image and legal considerations. Technology, especially the Web, has helped entrepreneurs start home-based businesses.

Copyright © 2006 Thomson Business & Professional Publishing. All rights reserved. Student 9–7 Internet and Small Business Startups E-commerce offers the opportunity to compete with bigger companies on a more level playing field. Internet operations can help small firms with cash flow problems by compressing sales cycles. E-commerce enables small firms to build stronger customer relationships. New versions of the business-to-business (B2B) model continue to develop and evolve. The three main advantages of online business-to- consumer (B2C) firms are speed of access, speed of transaction, and continuous access to products and services, often referred to as 24/7 e-tailing.

Copyright © 2006 Thomson Business & Professional Publishing. All rights reserved. Student 9–8 Internet and Small Business Startups (cont’d.) Auction sites are online firms that bring buyers and sellers together. The role of a Web site can range from merely offering content and information to permitting the buying and selling of products and services online.

Copyright © 2006 Thomson Business & Professional Publishing. All rights reserved. Student 9–9 Key Terms brick-and-mortar store enterprise zones business incubator general-purpose equipment special-purpose equipment home-based business zoning ordinances e-commerce Electronic Customer Relationship Marketing (eCRM) business model business-to-business (B2B) model business-to-consumer (B2C) model 24/7 e-tailing auction sites content/information-based model transaction-based model