LOCATE AND SET UP YOUR BUSINESS Entrepreneurship 4/20/2017 Chapter 8 LOCATE AND SET UP YOUR BUSINESS 8.1 Choose a Retail Business Location 8.2 Choose a Location for a Non-Retail Business 8.3 Obtain Space and Design the Physical Layout 8.4 Purchase Equipment, Supplies, and Inventory Chapter 8

Lesson 8.1 CHOOSE A RETAIL BUSINESS LOCATION Chapter 8 Lesson 8.1 CHOOSE A RETAIL BUSINESS LOCATION GOALS Research retail location possibilities. Begin to select your location.

LOCATION POSSIBILITIES (Main options for locating a retail business)* Chapter 8 LOCATION POSSIBILITIES (Main options for locating a retail business)* Downtown areas Neighborhood shopping centers Community shopping centers Regional shopping centers Super-regional shopping centers Stand-alone stores Warehouses

DOWNTOWN AREAS* Advantages Disadvantages Downtown Central Area Chapter 8 DOWNTOWN AREAS* Advantages Downtown Central Area Accessible Likely to attract business shoppers Disadvantages Parking problems Distance from suburbs Crime Lack of evening shoppers

NEIGHBORHOOD SHOPPING CENTERS Chapter 8 NEIGHBORHOOD SHOPPING CENTERS Advantages Supermarkets and other businesses bring in customers Low rent Disadvantages Attracts only customers who live in area

COMMUNITY SHOPPING CENTERS* Chapter 8 COMMUNITY SHOPPING CENTERS* Advantages Anchor stores bring in customers Moderate rent Disadvantages Distance is too great when convenience is important

REGIONAL SHOPPING CENTERS Chapter 8 REGIONAL SHOPPING CENTERS Advantages Anchor stores bring in customers Walk-in traffic Attracts customers from a large area Disadvantages Distance is too great when convenience is important High rent

SUPER-REGIONAL SHOPPING CENTERS Chapter 8 SUPER-REGIONAL SHOPPING CENTERS Advantages Huge number of customers Services a large area Disadvantages Very high rent Competition from many companies Distance is too great when convenience is important

STAND-ALONE STORES Advantages Disadvantages Rent can be lower Chapter 8 STAND-ALONE STORES Advantages Rent can be lower No competition next door Disadvantages No anchor store to attract customers Extra expense of advertising

WAREHOUSES Advantages Disadvantages Low rent Chapter 8 WAREHOUSES Advantages Low rent Can charge lower prices than competition Disadvantages No anchor store to attract customers Requires heavy advertising Customers may not be aware of your business

BEGIN SELECTION OF YOUR SITE Chapter 8 BEGIN SELECTION OF YOUR SITE Some factors you should consider when selecting a specific site for your retail business include:* Trade Area Where competitors are located, location type and availability, convenience for customers The trade area is the area from which you expect to attract customers. Avoid locating too close to competitors and try to draw from a different area. Location type and availability

BEGIN SELECTION OF YOUR SITE Chapter 8 BEGIN SELECTION OF YOUR SITE Rent is lower in neighborhood shopping centers than in community and regional centers because neighborhood shopping centers won’t attract as many customers, thus sales are low; high supply and low demand.

QUESTIONS TO ASK Is the location safe? Is it attractive? Chapter 8 QUESTIONS TO ASK Is the location safe? Is it attractive? Does it seem to attract the kind of customers your business will be targeting? Is it easy to reach? Is parking adequate? Do businesses in the vicinity seem to be thriving?

Lesson 8.2 CHOOSE A LOCATION FOR A NON-RETAIL BUSINESS Chapter 8 Lesson 8.2 CHOOSE A LOCATION FOR A NON-RETAIL BUSINESS GOALS Examine a location for a service business. Select a location for an industrial business. Operate your business from your home.

LOCATION FOR A SERVICE BUSINESS Chapter 8 LOCATION FOR A SERVICE BUSINESS For some service businesses, location is as important as it is for a retail business. Main factors determining where to locate an industrial business include:* Availability of good employees Low cost Is location always important?

LOCATION FOR A SERVICE BUSINESS* Chapter 8 LOCATION FOR A SERVICE BUSINESS* Five types of service businesses for which location is important are: Insurance Office Doctors Office Architect Employment agency Restaurant

LOCATION FOR A SERVICE BUSINESS* Chapter 8 LOCATION FOR A SERVICE BUSINESS* Five types of service businesses for which location is not important are: Lawn service Painter Carpenter Upholsterer Taxi company

LOCATION FOR AN INDUSTRIAL BUSINESS Chapter 8 LOCATION FOR AN INDUSTRIAL BUSINESS Industrial parks are sections of land that can be used for industrial business locations. Enterprise zones are areas that suffer from lack of employment opportunities. Businesses that locate in enterprise zones are eligible for favorable tax treatment because the government want to encourage employment for the residents.*

OPERATE YOUR BUSINESS FROM HOME Chapter 8 OPERATE YOUR BUSINESS FROM HOME Zoning laws Office space considerations Advantages and disadvantages Advances in technology allow home-based businesses to purchase high-tech equipment for reasonable prices.*

OPERATE YOUR BUSINESS FROM HOME* Chapter 8 OPERATE YOUR BUSINESS FROM HOME* Advantages of operating your business from home include: Rent Utility Insurance Other costs are reduced or eliminated Tax deductions You don’t need to commute

Lesson 8.3 OBTAIN SPACE AND DESIGN THE PHYSICAL LAYOUT Chapter 8 Lesson 8.3 OBTAIN SPACE AND DESIGN THE PHYSICAL LAYOUT GOALS Evaluate leasing versus buying space. Consider the costs and kinds of leases. Design the layout for different types of businesses.

LEASE OR BUY SPACE Kinds of commercial leases* Chapter 8 LEASE OR BUY SPACE Kinds of commercial leases* Gross lease – does not pay expenses Net lease – pays expenses Percentage lease – pays rent plus percent of revenue Compare different locations Calculating rent per customer You determine rent per customer by dividing the amount of monthly rent by the number of projected customers per month*

DESIGN THE LAYOUT OF YOUR BUSINESS Chapter 8 DESIGN THE LAYOUT OF YOUR BUSINESS Your layout must include enough space for: Employees Customers Merchandise Equipment Restrooms Stockrooms Storage Offices

Supplies and Inventory Chapter 8 CREATE THE FLOOR PLAN Cash registers Clothing Supplies and Inventory Dressing rooms Clothing tables Clothing racks Counter Window display Sample Floor Plan

LAYOUT OF A RETAIL BUSINESS, Creating a positive message* Chapter 8 LAYOUT OF A RETAIL BUSINESS, Creating a positive message* Choose appropriate lighting Think carefully about window displays Make the entrance inviting Use common sense when organizing the merchandise in your store Leave at least four feet of aisle space Create attractive in-store displays Use wall space wisely Place the cash register in a central location

LAYOUT OF A SERVICE BUSINESS Chapter 8 LAYOUT OF A SERVICE BUSINESS Layout is influenced by where services take place: At the business location At the customer’s location—on-site

LAYOUT OF A WHOLESALE BUSINESS 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 Be sure there are areas that accommodate merchandise of all sizes Keep walkways free of merchandise Store items safely

LAYOUT OF A MANUFACTURING BUSINESS Chapter 8 LAYOUT OF A MANUFACTURING BUSINESS Work teams should be situated close together Supervisors should be able to easily observe the people they supervise Exits should be clearly marked and easily accessible Any hazardous materials should be stored safely Equipment and machinery should be positioned in a way that reduces the chance of an accident

Lesson 8.4 PURCHASE EQUIPMENT, SUPPLIES, AND INVENTORY Chapter 8 Lesson 8.4 PURCHASE EQUIPMENT, SUPPLIES, AND INVENTORY GOALS Acquire equipment and supplies by evaluating different vendors. Determine the level of inventory needed for your business.

OBTAIN EQUIPMENT AND SUPPLIES Chapter 8 OBTAIN EQUIPMENT AND SUPPLIES Identify suppliers Evaluate proposals

STANDARD EQUIPMENT AND SUPPLY NEEDS FOR MOST BUSINESSES* Chapter 8 STANDARD EQUIPMENT AND SUPPLY NEEDS FOR MOST BUSINESSES* TYPE ITEMS Furniture Desks, chairs, bookcases, filing cabinets, tables, computer stands Fixtures Lamps, overhead lights Office Equipment Computers, modems, fax machines, telephones, photocopiers Office Supplies Stationery, pens and pencils, scissors, tape, staplers, paper clips, file folders, calendars Maintenance Supplies Toilet paper, paper towels, cleaning supplies Kitchen Supplies Coffee maker, small refrigerator, coffee, tea

Chapter 8 PURCHASE INVENTORY Inventory is the quantity of goods and materials on hand Purchase inventory for Start-up business Ongoing business The reorder point is a predetermined level of inventory when new stock must be purchased. Determine the amount of inventory to keep in stock by establishing reorder points for each product you sell; determine costs of carrying inventory.*

Chapter 8 CHOOSING VENDORS * When choosing a vendor one must research different vendors using published material, the internet, and word of mouth. Then evaluate different vendors’ merchandise and price quotes