CHOOSING THE RIGHT LOCATION AND LAYOUT

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CHOOSING THE RIGHT LOCATION AND LAYOUT
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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????

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Choosing the RegionSources of Information

• Census data
• http//www.census.gov/
• http//factfinder.census.gov
• ZoomProspector
• www.zoomprospector.com
• Population Reference Bureau
• www.prb.org
• STAT-USA
• http//www.statusa.gov

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Choosing the RegionSources of Information
(continued)

• Commercial Atlas and Marketing Guide
• Zip Code Atlas
• Geographic Information Systems (GIS)
• U.S. Census Departments TIGER

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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.

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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

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State Evaluation Matrix
State Weighted Score (Weight x Score) State Weighted Score (Weight x Score) State Weighted Score (Weight x Score)
Location Criterion Weight Score (Low 1, High 5) State 1 State 2 State 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      
TABLE 14.1
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Choosing the City

• Population trends
• Competition
• Clustering
• Compatibility with community
• Local laws and regulations
• Zoning regulations commercial vs. residential

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Choosing the City
(continued)

• Appropriate infrastructure
• Cost of utilities and public services
• Incentives
• Quality of life

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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

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Retail Service Location Options

• Central Business Districts (CBDs)
• Neighborhood locations
• Shopping centers and malls

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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.

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Shopping Centers and Malls
(continued)

• 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.

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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.

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FIGURE 14.1 Shopping Mall Patterns
Source International Council of Shopping
Centers.
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Retail and Service Location Options
(continued)

• Near competitors
• Inside large retail store
• Outlying areas
• Home-based businesses
• Low cost to set up

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Location Decisions for Manufacturers

• Foreign trade zones
• Area in or near a U.S. customs port of entry.

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FIGURE 14.2 How a Foreign Trade
Zone (FTZ) Works
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Manufacturing Locations

• Foreign trade zones
• Empowerment zones
• Business incubators

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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.

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FIGURE 14.3 Business Incubator Tenants
by Industry Source National Business
Incubation Association.
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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.

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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 customers
  eyes.
• The entrance must invite customers to come in.

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Layout External Factors
(continued)

• Must comply with Americans with Disabilities Act
  (ADA).
• Pay attention to the business sign, the most
  direct method of reaching potential customers.

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A Business Sign

• Tells potential customers who you are and what
  youre 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.

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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.
• Environmental-friendly design for efficiency and
  appeal.

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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!!

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Three Retail Layout Patterns
In addition to the text

• Grid
• Rectangular with parallel aisles formal
  controls traffic flow uses selling space
  efficiently.
• Supermarkets and self-service discount stores.

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Three Retail Layout Patterns
In addition to the text

• Free-Form
• Free-flowing informal creates friendly
  environment flexible.
• Small specialty shops.

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Three Retail Layout Patterns
In addition to the text

• Boutique
• Divides store into a series of individual
  shopping areas, each with its own theme unique
  shopping environment.
• Small department stores.

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Layout for Manufacturers

• Type of product
• Type of production process
• Ergonomic considerations
• Economic considerations
• Space availability within the facility

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Manufacturing Layouts

• Analyzing production layouts Avoid the 7 forms
  of waste
• Transportation
• Inventory
• Motion
• Waiting
• Overproduction
• Processing
• Defects

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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.