1. Selecting a Location My husband said he needed more space, so I locked him outside. Roseanne Barr The three most important business decisions are location, location, location

2. Physical Location The location decision is critical to the businessThe location decision is critical to the business –Location, location, location! Location decisions also apply to the internetLocation decisions also apply to the internet –See “In the Spotlight” p. 188 on computer accessory entrepreneur –“In the Trenches” (p. 191) on cost of web presence

3. 9-3 Small Business Management, 11th edition Longenecker, Moore, and Petty © 2000 South-Western College Publishing Finding an Optimum Location for a Small Business Personal Preference Work at home Friends and relatives nearby Lifestyle advantages Customer Accessibility Convenience for target customers Environmental Conditions Laws and taxes Weather Competition Resource Availability Incubator or leasing options Raw materials Transportation Labor supply Site Availability and Costs

4. Assessment of Business Locations What is the ideal location for a child’s lemonade stand?What is the ideal location for a child’s lemonade stand? What is the ideal location for a coffee place on campus?What is the ideal location for a coffee place on campus? Assessment of role of location in business closure - Example of Ground RoundAssessment of role of location in business closure - Example of Ground Round

5. Environmental Factors and Resources EnvironmentEnvironment –Taxes –Labor cost –Utilities ResourcesResources –Labor –Raw materials –Transportation How does Syracuse measure-up as a potential location?

6. Lease or Buy Usually better to lease, initiallyUsually better to lease, initially –Lower start-up investment Although building can be financed, need downpaymentAlthough building can be financed, need downpayment –Flexibility to move for expansion

7. Lease or Buy Better to Lease or Buy?Better to Lease or Buy? –Leasing preferred When little available for downpaymentWhen little available for downpayment Expect asset turnoverExpect asset turnover Unable to take advantage of some of the tax benefits associated with fixed assetsUnable to take advantage of some of the tax benefits associated with fixed assets –No right answer, but funding limitations for start-ups often favor leasing

8. Ownership of Real Estate Business real property should be owned individuallyBusiness real property should be owned individually –Either by the entrepreneur, or other family members –Allows payout to passive family members –Allows payout to entrepreneur without payroll taxes –Some tax benefits

9. Other Location Options Business incubatorsBusiness incubators –Provides for sharing of many costs Discussion of “You Make the Call”, Situation 2 on p. 206 Home-officeHome-office –Need to maintain professional appearance –Zoning restrictions may affect some businesses –Home office tax deduction

10. 9-7 Small Business Management, 11th edition Longenecker, Moore, and Petty © 2000 South-Western College Publishing Grid Pattern of Store Layout Display Racks Racks Restrooms Storage Office Displa y Display Racks Check-out Doo r

11. 9-8 Small Business Management, 11th edition Longenecker, Moore, and Petty © 2000 South-Western College Publishing Free-Flow Pattern of Store Layout Door Racks Display Racks Check-out Office Storage Display Table