1. LOCATE AND SET UP YOUR BUSINESS
Entrepreneurship
4/19/2017
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

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

3. LOCATION POSSIBILITIES
Downtown areas
Neighborhood shopping centers
Community shopping centers
Regional shopping centers
Super-regional shopping centers
Stand-alone stores
Warehouses

4. DOWNTOWN AREAS Advantages Disadvantages Central
Likely to attract business shoppers
Disadvantages
Parking problems
Distance from suburbs
Crime
Lack of evening shoppers

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

6. COMMUNITY SHOPPING CENTERS
1 or 2 Anchor Stores and 10 or more smaller stores
Advantages
Anchor stores bring in customers
Moderate rent
Disadvantages
Distance is too great when convenience is important

7. ANCHOR STORE Larger stores that advertise a lot and attract customers from the community
EXAMPLES
JC Penney
Macy’s
Wal-Mart
K-Mart
Kroger
Walgreens

8. REGIONAL SHOPPING CENTERS
3 or 4 Anchor Stores and 40 or more other stores
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

9. SUPER-REGIONAL SHOPPING CENTERS
Very large and have hundreds of stores.
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

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

11. WAREHOUSES Advantages Disadvantages 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

12. BEGIN SELECTION OF YOUR SITE
The trade area is the area from which you expect to attract customers.
Location type and availability

13. 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?

14. 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.

15. LOCATION FOR A SERVICE BUSINESS
For some service businesses, location is as important as it is for a retail business.
Is location always important?

16. 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.

17. OPERATE YOUR BUSINESS FROM HOME
Zoning laws
Office space considerations
Advantages and disadvantages
Can write off percentage of home costs
No travel expenses
Work when convenient for you
Distractions

18. 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.

19. LEASE OR BUY SPACE Kinds of commercial leases
Gross lease—Tenant pays rent, landlord pays everything else.
Net lease—Tenant pays rent plus all other expenses except landlord pays insurance.
Percentage lease—Tenant pays rent plus pays a percentage of sales.
Compare different locations
Calculating rent per customer
Rent per Month ÷ Estimated Customers per Month

20. Why Lease/Rent? Not enough money to buy
Easier to get out of lease than sell
Landlord generally handles building maintenance

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

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

23. LAYOUT OF A RETAIL BUSINESS
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

24. LAYOUT OF A SERVICE BUSINESS
Layout is influenced by where services take place:
At the business location—Just like a retail business
At the customer’s location (on-site)—Organization is the only concern

25. 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

26. 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

27. 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.

28. OBTAIN EQUIPMENT AND SUPPLIES
Identify suppliers
Evaluate proposals

29. 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

30. 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.