1. 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

2. 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.

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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.

13. 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?

14. 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.

15. 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?

16. 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

17. 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

18. 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.*

19. 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.*

20. 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

21. 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.

22. 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*

23. 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

24. 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

25. 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

26. 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

27. 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

28. 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

29. 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.

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

31. 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

32. 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.*

33. 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