1. PowerPoint Presentations for Small Business Management: Launching and Growing New Ventures, Fifth Canadian Edition Adapted by Cheryl Dowell Algonquin College

2. Chapter 11 Selecting a Location and Planning the Facilities

3. LOOKING AHEAD After studying this chapter, you should be able to: 1.Describe the factors affecting the choice of a bricks-and- mortar business location. 2.Discuss the challenges of designing and equipping a physical facility. 3.Describe the attraction and challenges of a home-based business. 4.Understand the potential benefits of locating a start-up on the Internet. Copyright © 2013 by Nelson Education Limited 11-3

4. KEY FACTORS IN SELECTING A GOOD LOCATION Copyright © 2013 by Nelson Education Limited 11-4 LO 1

5. IMPORTANCE OF LOCATION FACTORS Copyright © 2013 by Nelson Education Limited 11-5 LO 1

6. PROVINCIAL TAX RATES Copyright © 2013 by Nelson Education Limited 11-6 LO 1

7. SITE AVAILABILITY AND COSTS Copyright © 2013 by Nelson Education Limited 11-7 Business Incubators – Facility that rents space to new businesses or people wishing to start businesses – Make space available, offer management advice, provide clerical assistance helping to lower operating costs – Tenant can be fully operational the day after moving in – Goal: see new businesses hatch, grow, and leave the incubator – Most have government or postsecondary sponsorship – Stimulate economic development – According to the Canadian Association Of Business Incubation (CABI) more than 80% of businesses started in an incubator survive past five years, compared to a survival rate of less than 50 percent for all start-upsCABI LO 1

8. LEASING TERMINOLOGY Copyright © 2013 by Nelson Education Limited 11-8 Lessor – owner of property who is leasing it to a tenant(s) – often represented by a broker Lessee (tenant) – person or business leasing the space Square feet (sf) – measurement of space occupied Net rent (base rent) – net cost to rent space in a building – may be expressed as a monthly or annual amount or as a dollar per square foot per year (psf) amount continued… LO 1

9. LEASING TERMINOLOGY Copyright © 2013 by Nelson Education Limited 11-9 Additional rent – practice of tenant paying for operating expenses such as taxes, insurance, common area maintenance, utilities, and janitorial services in addition to the monthly base rent Realty taxes – property taxes charged by municipality and/or province. Leasehold improvements – improvements or changes to the space to make it suitable to the tenant’s purpose and taste Inducements – temporary reductions in rent, rent-free periods at the beginning of the lease term, and leasehold improvements LO 1

10. Copyright © 2013 by Nelson Education Limited 11-10 DESIGNING PHYSICAL FACILITIES LO 2

11. DESIGNING PHYSICAL FACILITIES Copyright © 2013 by Nelson Education Limited 11-11 LO 2

12. Copyright © 2013 by Nelson Education Limited 11-12 DESIGNING PHYSICAL FACILITIES LO 2

13. LOCATING THE START-UP IN THE ENTREPRENEUR’S HOME Copyright © 2013 by Nelson Education Limited 11-13 Challenges – Family and business conflicts Observe regular business hours and establish spatial boundaries (specific work areas) to avoid distractions – Business image of a home-based business Professional image is difficult to maintain – Legal considerations Local laws and zoning ordinances prohibit many types of home-based businesses LO 3

14. LOCATING ON THE WEB e-commercepaperless exchange of business information via the Internet Electronic Customer Relationship Marketing (ECRM) electronically based system that emphasizes customer relationships 24/7 e-tailingelectronic retailing providing round the- clock access to products and services auction sitesweb-based businesses offering participants the ability to list products for bidding content/ information- based model a business model in which the website provides information but not the ability to buy or sell products and services transaction-based modela business model in which the website provides a mechanism for buying or selling products or services Copyright © 2013 by Nelson Education Limited 11-14 LO 4

15. E-COMMERCE BUSINESS MODELS Copyright © 2013 by Nelson Education Limited 11-15 LO 4

16. E-COMMERCE BUSINESS MODELS Copyright © 2013 by Nelson Education Limited 11-16 Type of Customer Served – B2B – (business-to-business) based on selling to business customers electronically – B2C (business-to-consumer) based on having final consumers as customers 24/7 e-tailing provides round the clock access to products and services LO 4