1. CHOOSING THE RIGHT LOCATION AND LAYOUT

2. Choosing a Location The right region of the country The right state in the region The right city in the state The right site in the city Where is the growth potential???? Dr. Jerry Kudlats

3. Choosing the Region: Sources of Information Census data ◦ http://www.census.gov/ http://www.census.gov/ ◦ http://factfinder.census.gov http://factfinder.census.gov ZoomProspector ◦ www.zoomprospector.com www.zoomprospector.com Population Reference Bureau ◦ www.prb.org www.prb.org STAT-USA ◦ http://www.statusa.gov http://www.statusa.gov Dr. Jerry Kudlats

4. Choosing the Region: Sources of Information Commercial Atlas and Marketing Guide Zip Code Atlas Geographic Information Systems (GIS) ◦ U.S. Census Department’s TIGER Dr. Jerry Kudlats (continued)

5. Geographic Information Systems (GIS) Computerized programs combining map- drawing with database management capability. Search through virtually any database and then plot the results on a map. Visual display reveals otherwise hidden trends. Dr. Jerry Kudlats

6. Choosing the State Proximity to markets ◦ reduces distribution costs Proximity to needed raw materials ◦ Closer to suppliers the better - Reduces costs to make product Wage rates ◦ Wages very state to state affecting cost of doing business Labor supply needs ◦ 2 factors - # of workers available and their level of education Business climate ◦ City/state restrictions – ie blue laws (Sunday closings) Tax rates ◦ Special tax rate incentives – Kia in Georgia, or Mercedes in AL. Internet access ◦ Make sure hi speed access – DSL or T1 is available Total operating costs ◦ Wages, taxes, utilities, rent all affect the business venture Dr. Jerry Kudlats

7. State Evaluation Matrix State Weighted Score (Weight x Score ) Location CriterionWeight Score (Low = 1, High = 5)State 1State 2State 3 Quality of labor force Wage rates Union activity Property/building costs Utility costs Transportation costs Tax burden Educational/training assistance Start-up incentives Raw material availability Quality of life Other: Other Total Score Dr. Jerry Kudlats TABLE 14.1

8. Choosing the City Population trends Competition Clustering Compatibility with community Local laws and regulations Zoning regulations – commercial vs. residential Dr. Jerry Kudlats

9. Choosing the City Appropriate infrastructure Cost of utilities and public services Incentives Quality of life Dr. Jerry Kudlats (continued)

10. Location Criteria for Retail and Service Trade area size – the region from which a business can expect to draw customers Retail compatibility Degree of competition Dr. Jerry Kudlats

11. Retail & Service Location Options Central Business Districts (CBDs) Neighborhood locations Shopping centers and malls Dr. Jerry Kudlats

12. Shopping Centers and Malls Neighborhood shopping centers ◦ 3 to 12 Stores; anchor is supermarket or drugstore; serves up to 40,000 people – usually within 10 minutes travel time. Community shopping centers ◦ 12 to 50 stores; anchor is department or variety store; serves 40,000 to 150,000 people. Power centers ◦ Combine drawing power of a mall with convenience of neighborhood shopping center; anchor stores typically occupy 80% of space. Dr. Jerry Kudlats

13. Shopping Centers and Malls Theme or festival centers ◦ Employ a unifying theme, often involving entertainment, to attract tourists. Outlet centers ◦ Feature manufacturers’ and retailers’ outlet stores selling name-brand goods at discount prices; usually follows “open air” design. Lifestyle centers ◦ Located near affluent residential neighborhoods; designed to look more like a central business district than a shopping center or mall. Dr. Jerry Kudlats (continued)

14. Shopping Centers and Malls Regional shopping malls ◦ 50 to 100 stores; anchor is one or more major department stores; draws customers from a large trading area, often 5 to 15 miles or more. Super-regional shopping malls ◦ Similar to a regional mall but bigger; trading area is 25 miles or more in all directions. ◦ Examples  Mall of America (Bloomington, MN), the largest mall in the U.S.  West Edmonton Mall (West Edmonton, Canada), the largest mall in North America. Dr. Jerry Kudlats

15. FIGURE 14.1 Shopping Mall Patterns Source: International Council of Shopping Centers.

16. Retail and Service Location Options Near competitors Inside large retail store Outlying areas Home-based businesses ◦ Low cost to set up Dr. Jerry Kudlats (continued )

17. Location Decisions for Manufacturers Foreign trade zones ◦ Area in or near a U.S. customs port of entry. Dr. Jerry Kudlats

18. FIGURE 14.2 How a Foreign Trade Zone (FTZ) Works

19. Manufacturing Locations Dr. Jerry Kudlats Foreign trade zones Empowerment zones Business incubators

20. Business Incubators Organizations that combine low-cost, flexible rental space with a multitude of support services for their small business residents. More than 1,100 in operation across the U.S. They work! ◦ Companies that “graduate” from incubators have a success rate of 87%. ◦ 84% of graduates stay in the local community, creating local job opportunities. Dr. Jerry Kudlats

21. FIGURE 14.3 Business Incubator Tenants by Industry Source: National Business Incubation Association. Dr. Jerry Kudlats

22. Layout The logical arrangement of the physical facilities of a business that contributes to efficient operations, increased productivity, and higher sales. Study: Employees believe that the quality and quantity of their work would increase by an average of 25% with better workplace design. Dr. Jerry Kudlats

23. Layout: External Factors The size must be adequate to accommodate business needs. The appearance must create the proper image or “personality” for the business in the customer’s eyes. The entrance must invite customers to come in. Dr. Jerry Kudlats

24. Must comply with Americans with Disabilities Act (ADA). Pay attention to the business sign, the most direct method of reaching potential customers. Dr. Jerry Kudlats () (continued) Layout: External Factors

25. A Business Sign Tells potential customers who you are and what you’re selling. Contrasting colors and simple typeface. Should be visible, simple, and clear. Should be legible both day and night. Must be maintained properly. Must comply with local sign ordinances. Dr. Jerry Kudlats

26. Building Interiors Ergonomics is an integral part of any design. Proper layout and design pays off in higher productivity, efficiency, or sales. Proper lighting is measured by what is ideal for the job being done – the u se of natural light can increase retail sales. Sound and scent should appeal to all customers and can boost sales. Environmental-friendly design for efficiency and appeal. Dr. Jerry Kudlats

27. Layout Guidelines Know your customers’ buying habits and plan your layout accordingly. Display merchandise as attractively as your budget will allow. Display complementary items together. Recognize the value of floor space; never waste valuable selling space with non- selling functions. High mark up items = prime space!! Dr. Jerry Kudlats

28. Three Retail Layout Patterns Grid ◦ Rectangular with parallel aisles; formal; controls traffic flow; uses selling space efficiently. ◦ Supermarkets and self-service discount stores. Dr. Jerry Kudlats In addition to the text

29. Three Retail Layout Patterns Free-Form ◦ Free-flowing; informal; creates “friendly” environment; flexible. ◦ Small specialty shops. Dr. Jerry Kudlats In addition to the text

30. Three Retail Layout Patterns Boutique ◦ Divides store into a series of individual shopping areas, each with its own theme; unique shopping environment. ◦ Small department stores. Dr. Jerry Kudlats In addition to the text

31. Layout for Manufacturers Type of product Type of production process Ergonomic considerations Economic considerations Space availability within the facility Dr. Jerry Kudlats

32. Manufacturing Layouts Analyzing production layouts: Avoid the 7 forms of waste ◦ Transportation ◦ Inventory ◦ Motion ◦ Waiting ◦ Overproduction ◦ Processing ◦ Defects Dr. Jerry Kudlats

33. Conclusion Location is an important decision for businesses in the areas of: ◦ Retail ◦ Service ◦ Manufacturing The criteria for site selection, layout, design, and ADA considerations present challenges and opportunities for entrepreneurs. Dr. Jerry Kudlats