مستند PDF 15

Section 3:
Launching the Business
Copyright © 2019, 2016, 2014 Pearson Education Ltd. All Rights Reserved
Essentials of Entrepreneurship and Small
Business Management
Ninth Edition, Global Edition
Chapter 14
Choosing the Right Location
and Layout
Copyright © 2019, 2016, 2014 Pearson Education Ltd. All Rights Reserved.
Learning Objectives (1 of 2)
1. Explain the stages in the location decision: choosing the
region, the state, the city, and the specific site.
2. Describe the location criteria for retail and service
businesses.
Learning Objectives (2 of 2)
3. Outline the location options for retail and service
businesses; central business districts, neighborhoods,
shopping centers and malls, retail competitors, shared
spaces, inside large retail stores, nontraditional locations,
at home, and on the road.
4. Explain the site selection process for manufacturers.
5. Describe the criteria used to analyze the layout and
design considerations of a building, including the
Americans with Disabilities Act.
6. Explain the principles of effective layouts for retailers,
service businesses, and manufacturers.
Choosing a Location
• Having the right location for a business can be an
important source of competitive advantage.
• Consider:
– The right region of the country
– The right state in the region
– The right city in the state
– The right site in the city
Choosing the Region: Sources of
Information (1 of 3)
• Census data
– www.census.gov
– http://factfinder.census.gov
• Zoom Prospector
– http://zoomprospector.com/
• Population Reference Bureau
– www.prb.org/DataFinder.aspx
• Zip Code Atlas and Market Planner
• Lifestyle Market Analyst
• Site Selection
• Editor and Publisher Market Guide
• The American Marketplace: Demographics and Spending
Patterns
• Small Business Development Center
– http://sba.gov
• Population Reference Bureau
– http://prb.org/
• Euromonitor International
– http://euromonitor.com/
• OECD
– http://oecd.org/
Choosing the State (1 of 4)
• Proximity to markets
• Proximity to needed raw materials
• Wage rates
• Labor supply needs
• Business climate
Table 14.1 Most and Least
Small-Business-Friendly States
States Most Friendly to Small Businesses Blank
1. Nevada 6. Washington
2. Texas 7. Indiana
3. South Dakota 8. Arizona
4. Wyoming 9. Alabama
5. Florida 10. Ohio
States Least Friendly to Small Businesses Blank
41. Oregon 46. Vermont
42. Iowa 47. Minnesota
43. Connecticut 48. New York
44. Maine 49. New Jersey
45. Hawaii 50. California
Source: Based on Raymond J. Keating, Small Business Policy Index 2017, Small Business & Entrepreneurship Council,
21st Annual Edition, February 2017, p. 2.
• Wage rates
• Size and quality of labor force
• Tax rates
Figure 14.1 State Business Tax Climate Index
Source: Jared Walczak, Scott Drenkard, and Joseph Henchman, 2017 State Business Tax Climate
Index, Tax Foundation, September 28, 2016, p. 1.
• Wage rates
• Tax rates
• Internet access
Internet Download Speeds
Figure 14.2 Average Internet Peak Download Speeds
(Mbps) by State
Source: Based on data from “Internet Connection Speed Map,” FastMetrics, 2017,
www.fastmetrics.com/internet-connection-speedmap-usa.php#average-speeds-by-state.
• Wage rates
• Tax rates
• Internet access
• Total operating costs
Table 14.2 State Evaluation Matrix
State Weighted Score (Weight * Score)
Score
Location Criterion Weight State 1 State 2 State 3
(Low = 1, High = 5)
Quality of labor force Blank Blank Blank Blank Blank
Wage rates Blank Blank Blank Blank Blank
Union activity Blank Blank Blank Blank Blank
Property/building costs Blank Blank Blank Blank Blank
Utility costs Blank Blank Blank Blank Blank
Transportation costs Blank Blank Blank Blank Blank
Tax burden Blank Blank Blank Blank Blank
Educational/training assistance Blank Blank Blank Blank Blank
Start-up incentives Blank Blank Blank Blank Blank
Raw material availability Blank Blank Blank Blank Blank
Quality of life Blank Blank Blank Blank Blank
Other: Blank Blank Blank Blank Blank
Blank Blank Total Score Blank Blank Blank
Table 14.3 Best and Worst States for Doing
Business (1 of 2)
Top 10 States for Doing Business

Rank Based
Taxes and on Workforce Living
Overall Rank* State Regulations Quality Environment
1 Texas #6 #5 #10
2 Florida 7 23 9
3 North Carolina 15 10 3
4 Tennessee 4 8 8
5 Indiana 10 4 17
6 Arizona 12 14 11
7 South Carolina 11 19 6
8 Georgia 14 9 7
9 Nevada 3 22 21
10 Ohio 24 7 23
Table 14.3 Best and Worst States for Doing
Business (2 of 2)
Bottom 10 States for Doing Business
Taxes and Workforce Living
Rank* State Regulations Quality Environment
41 Rhode Island #44 #37 #39
42 Mississippi 33 48 50
43 Maryland 45 45 41
44 Hawaii 43 49 4
45 Massachusetts 47 16 38
46 Connecticut 48 36 37
47 New Jersey 42 40 48
48 Illinois 46 44 45
49 New York 49 38 47
50 California 50 35 26
*Rank is the result of a survey by Chief Executive magazine that asked 650 business leaders to rank the states on factors
such as taxes, regulatory burden, quality of workforce, and quality of life.
Source: Based on “2016 Best and Worst States for Business,” Chief Executive, May 6, 2016,
http://chiefexecutive.net/2016-best-and-worst-states-forbusiness-full-list/.
Choosing the City (1 of 3)
• Population trends
Table 14.4 States with the Most Top
Micropolitan Areas
State Number of Top 100 Micropolitan Areas
Ohio 19
Kentucky 9
Indiana 6
North Carolina 6
Georgia 5
Illinois 5
Tennessee 4
Alabama 4
Nebraska 4
Michigan 4
Source: Based on Ron Starner, “The Findlay Formula Effect,” Site Selection, March 2016, pp. 115–129.
• Population trends
• Competition
• Clustering
• Compatibility with community
• Local laws and regulations
– Zoning laws
– Variance
• Appropriate infrastructure
• Incentives
• Quality of life
Choosing the Site
• Test the suitability of potential locations by opening
“pop-up” stores.
• Consider downsizing outlets to lower start-up and
operating costs and to allow for more location options
that are not available to full-sized stores.
– Example: Burger King
Location Criteria for Retail and Service
Businesses (1 of 3)
• Trade area size:
– The region from which a business can expect to draw
customers.
• Retail compatibility
• Degree of competition
• Index of retail saturation (IRS)
Index of Retail Saturation
Where:
C = Number of customers in the trading area
RE = Retail expenditures equals the average expenditure
per person for the product in the trading area
RF = Retail facilities = the total square feet of selling space
allocated to the product in the trading area
Businesses (2 of 3)
• Trade area size:
– The region from which a business can expect to draw
customers.
• Retail compatibility
• Degree of competition
• Index of retail saturation (IRS)
• Reilly’s law of retail gravitation
Reilly’s Law of Retail Gravitation
where
BP = the distance in miles from location A to the break point
d = the distance in miles between locations A and B
Pb = the population surrounding location B
Pa = the population surrounding location A
Businesses (3 of 3)
• Transportation network
• Physical and psychological barriers
• Customer traffic
• Adequate parking
• Reputation
• Visibility
Retail & Service Location Options (1 of 2)
• Central Business Districts (CBDs)
• Neighborhood locations
• Shopping centers and malls
Shopping Centers and Malls (1 of 5)
• Strip shopping centers
– The smallest of all shopping centers, but make up the
bulk of all the centers in the United States.
• Neighborhood shopping centers
– 5 to 20 stores; anchor is supermarket or drugstore;
serves up to 40,000 people.
• Community shopping centers
– 15 to 40 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.
• 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.
• Regional shopping malls
– 40 to 80 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.
– Example:
▪ West Edmonton Mall (West Edmonton, Canada),
the largest mall in North America.
Evaluating a Location
• Is there a good fit with other products and brands sold in
the mall or center?
• Who are the other tenants?
• Demographically, is it a good fit?
• How much foot traffic does it generate?
• What is the average sales per square foot?
• How much vehicle traffic does it generate?
• What is the vacancy rate?
• How much is the rent, and how is it calculated?
Retail & Service Location Options (2 of 2)
• Near competitors
• Shared spaces
• Inside large retail store
• Nontraditional locations
• Home-based businesses
• On the road
Location Decisions for Manufacturers (1 of 2)
• Foreign trade zones:
– a specially designated area in or near a U.S. customs
port of entry that allows resident companies to import
materials and components from foreign countries;
assemble, process, manufacture, or package them;
and then ship the finished product while either reducing
or eliminating tariffs and duties.
Figure 14.3 How a Foreign Trade Zone Works
Location Decisions for Manufacturers (2 of 2)
• Foreign trade zones
• Business incubators:
– an organization that combines low-cost, flexible rental
space with a multitude of support services for its small
business residents.
• Accelerator:
– an organization that provides business start-ups a
range of valuable support services in return for a share
of equity, typically 2–10% of the company’s stock,
usually in a “boot camp” experience that lasts only a
few months.
Business Incubators
• Organizations that combine low-cost, flexible rental space
with a multitude of support services for their small business
residents.
• More than 1,500 in operation across the United States.
• They work!
– Companies that “graduate” from incubators have a
success rate of between 75% and 87%.
– 84% of graduates stay in the local community, creating
local job opportunities.
Layout
• Layout:
– The logical arrangement of the physical facilities of a
business that contributes to efficient operations,
increased productivity, and higher sales.
• In the United States, 23% of workers are dissatisfied with
their work environments.
Figure 14.4 Work Space Design Characteristics in
the United States (part a) and Globally (part b)
Source: Based on Steelcase Global Report, 2014, p. 212.
Layout: External Factors (1 of 6)
• Size and adaptability
– The size must be adequate to accommodate business
needs.
• Construction and appearance
– The appearance must create the proper image or
“personality” for the business in the customer’s eyes.
Window Displays That Sell
• Tips for window displays that sell:
– Keep displays simple.
– Keep displays clean and current.
– Change displays frequently.
– Get expert help if necessary.
• Entrances
– The entrance must invite customers in.
• The Americans with Disabilities Act
– Must comply with Americans with Disabilities Act (ADA).
• Signs
– Pay attention to the business sign, the most direct
method of reaching potential customers.
Business Signs
• Tell potential customers who you are and what you’re
selling.
• Should have 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.
• Building interiors
– Ergonomics: the science of adapting work and the
work environment to complement employees’ strengths
and to suit customers’ needs.
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 use of natural light can increase retail
sales.
• Sound and scent should appeal to all customers and can
boost sales.
• Environmentally friendly design for efficiency and appeal.
• Building interiors
– Ergonomics
• Drive-through windows
– Can be a relatively inexpensive way to increase sales.
– Account for 60–70% of sales in quick-service
restaurants.
• Sight, sound, and lighting
– Support brand and image using colors and visual cues.
– A business’s “soundscape” can have an impact on the
length of time customers shop and the amount of
money they spend.
– Use scent as a sales tool.
– Study: Stores using natural light experience sales that
are 40% higher than similar stores using fluorescent
lighting.
• Sustainability and environmentally friendly design
– Recycled materials; high efficiency lighting, fixtures,
and appliances
– LEED principles
Layout for Retailers
• 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.
Figure 14.6 Space Values for a Small Store
Source: From Dale M. Lewison, Retailing, 6th ed. Copyright © 1997 by Dale M. Lewison. Reprinted with permission.
Layout for Manufacturers
• Type of product
• Type of production process
• Ergonomic considerations
• Economic considerations
• Space availability within the facility
Types of Manufacturing Layouts
Three basic layouts:
1. Product
2. Process
3. Fixed position
Designing Production Layouts
Avoid the seven forms of waste:
1. Transportation
2. Inventory
3. Motion
4. Waiting
5. Overproduction
6. Processing
7. Defects
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.
Copyright

مستند PDF 15

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

مستند PDF 15

Uploaded by

Copyright:

Available Formats

Section 3:

Launching the Business

Top 10 States for Doing Business

Source: Based on Steelcase Global Report, 2014, p. 212.

You might also like