OCATION

THE PLAN
LOCATING THE BRICK-AND-
MORTAR STARTUP
5-1
LOCATING THE BRICK-AND-
MORTAR STARTUP
 It describes the physical
presence of a building.
 Deals with its customers
face to face in an office
or store that the
business owns or rents.
Marty and Avery Walker relocating
their Volvo Rents business from
Austin to College Station, Texas.
Since their venture rents and sells
heavy equipment to construction
companies and other businesses,
it made sense to move 100 miles
from the saturated rental market
in Austin to be closer to the steady
building activity in College
Station.
IMPORTANCE OF THE LOCATION
DECISION
 If the site is particularly poor,
the business may never become
successful.
 The location decision has a
direct effect on an operation’s
costs as well as its ability to
serve customers.
 Customer Accessibility
KEY Business Environment
FACTORS Conditions
IN
SELECTING Availability of Resources
A GOOD
Personal Preference
LOCATION
Site Availability & Cost
 CUSTOMER
ACCESSIBILITY
 The location must
allow convenient
access to our targeted
customers.
 It should avoid great
amount of shipping
cost of the finished
products.
 CUSTOMER
ACCESSIBILITY
 Site selection programs
can give users access to
demographic information
for specific
neighborhoods.
 It is one reason that many
small businesses have
successfully established a
strong presence on the
Internet.
BUSINESS ENVIRONMENT CONDITIONS

Climate-related factors.
Environmental factors:
 Presence of Established
Competitors
 Tax structure
 Cost of Living for Employees
 THWARTED ENTREPRENEURIAL
ASPIRATIONS
 Esmeralda Rodriquez had to pay rent while
waiting for permits to open a play center in
Chicago. After a year of delays, and with
her savings running out, she had to give
up.
 Philadelphia required Ramesh Naropanth to
spend $8,000 to install unnecessary gates
on his convenience store before approving
a permit for him to sell sandwiches.
AVAILABILITY OF RESOURCES

Easy access of raw materials needed by

the business and the suppliers that will
provide these raw materials.
Access to adequate and reliable
transportation.
AVAILABILITY OF RESOURCES

The location should have workers with

appropriate skills and reasonable wage
requirement for the business to operate.
“Probably the single biggest emerging
reason why anyone is moving
companies... is access to talent”
-Tim Nitti
 ENTREPRENEUR’S
PERSONAL PREFERENCE
Many entrepreneurs tend
to focus primarily on their
personal preferences and
convenience when
locating a business.
Often choose to stay in
their home community.
 ENTREPRENEUR’S
PERSONAL PREFERENCE
Many entrepreneurs tend
to focus primarily on their
personal preferences and
convenience when
locating a business.
Often choose to stay in
their home community.
Provides unique
 SITE AVAILABILITY
AND COSTS
 Once an entrepreneur has
settled on a certain area for
her or his business, a
specific site must still be
chosen.
 If an entrepreneur has a
difficulty of locating a good
site, then other alternatives
could help them like
Business Incubators.
Avoids a large cash outlay.
ADVANTAGES OF LEASING OVER BUYING

Risk is reduced by
minimizing investment and
by postponing
commitments for space
until the success of the
 More OF
ADVANTAGES affordable to lease
LEASING OVER BUYING
in a high-image area
compared to buying in a
prime location.
Allows the entrepreneur
to focus on running the
 OTHER FACTORS RELEVANT
TO THE LOCATION DECISION
Neighbor mix: Who’s next
door?
Security and Safety: How safe
is the neighborhood?
Services: Does the city provide
 OTHER FACTORS RELEVANT
TO THE LOCATION DECISION
Past tenant’s fate: What
happened to previous
businesses in that location?
Location’s lifecycle stage: Is
the area developing, stagnant,
or in decline?
DESIGNING AND EQUIPPING
THE PHYSICAL FACILITIES
5-2
DESIGNING THE PHYSICAL FACILITIES

Physical facilities
should be of adequate
size and
accommodation; not
too large or too
DESIGNING THE PHYSICAL FACILITIES
 Other considerations:
 Age/condition of the building
 Heating/air conditioning
 Lighting and restroom facilities
 Fire Hazards
 Entrances and exits
 EQUIPPING THE PHYSICAL
FACILITIES
Thepurchase or lease of equipment
and tools.
MANUFACTURING EQUIPMENT
Manufacturing is the
production of
merchandise for use
or sale using labor
and machines.
Itcan be either
General-purpose
RETAILING EQUIPMENT
 These are resources
for selecting POS
software,
accounting
packages, point of
sale hardware, and
using today’s
OFFICE EQUIPMENT
 These are the
assets used for the
operating functions
of a company.
 Thesealso includes
desks, chairs,
BUSINESS IMAGINE
The perception
of the people
about your
business when
they hear the
company name.
BUSINESS IMAGINE
 It
is composed of an
infinite variety of
facts, events,
personal histories,
advertising and
goals that work
together to make an
 LOCATING THE STARTUP IN
THE ENTREPRENEUR’S HOME
5-3
 LOCATING THE STARTUP IN
THE ENTREPRENEUR’S HOME
Many entrepreneurs
choose to use their
basement, garage, or spare
room for their operations,
creating a home-based
business rather than lease
 LOCATING THE STARTUP IN
THE ENTREPRENEUR’S HOME
Despite the limitations and
potential for image
problems, home-based
entrepreneurs no longer feel
embarrassed about their
location
 LOCATING THE STARTUP IN
THE ENTREPRENEUR’S HOME
Recent research has
shown that home-
based businesses may
actually enjoy an
advantage over other
companies when it
comes to certain
 THE ATTRACTION OF
HOME-BASED BUSINESSES
 According to
government surveys,
more than half of all
U.S. business owners
chose to run their
businesses primarily
The main attractions of a home-
based business relate to
financial and family lifestyle
considerations such as the ff:
 Get a business up and running
quickly and cheaply.
 Have something interesting to do,
and get paid for doing it.
 Beyour own boss, and reap the
rewards from your efforts.
The main attractions of a home-
based business relate to
financial and family lifestyle
considerations such as the ff:

Spend more time with family

and friends.
Save time and money wasted
on daily commutes.
FINANCIAL CONSIDERATIONS
 Home-based
business has an
important goal-
earning money
and locating at
home helps
increase profits by
FINANCIAL CONSIDERATIONS

 Thisoption can
certainly limit the
cost and therefore
the risk of testing
market demand for
a new product or
FAMILY LIFESTYLE CONSIDERATIONS
 Entrepreneurs who
locate business
operations in the home
are frequently
motivated by the desire
to spend more time
with family members,
sometimes even
 Marissa Shipman,
founder and CEO of
Shipman Associates Inc.
launched her cosmetics
business from her home
in 2001. Shipman
Associates is a true
family affair. It has
worked out well enough
 THE CHALLENGES OF HOME-
BASED BUSINESSES
 This kind of business
faces special
challenges because of
its location.
 We briefly examine two
of these issues;
PROFESSIONAL IMAGE
 Maintaininga
professional image
when working at
home is a major
challenge for many
home-based
PROFESSIONAL IMAGE

 Ifclients visit the

home-based
business, then it is
critical that a
professional office
area be
LEGAL CONSIDERATIONS
 Local laws can
sometimes pose
serious problems for
home-based
businesses.
 Like Zoning ordinances
that regulate the types
of enterprises
LEGAL CONSIDERATIONS

 There are also tax

issues and
insurance
considerations
related to this kind
of business.