Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter Chapter Chapter Chapter 88

Locate and Set Up Your Business 8.1 Choose a Location8.1 Choose a Location

8.2 Obtain Space and Design the 8.2 Obtain Space and Design the Physical Layout Physical Layout

8.3 Purchase Equipment, Supplies, 8.3 Purchase Equipment, Supplies, and Inventory and Inventory

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 8Slide 2

Lesson 8.1

Choose a Location

Goals Identify options for locating a retail business. Discuss factors to consider when choosing a

location for a nonretail business. Identify the benefits of locating a business

online. Describe steps to take in selecting a site.

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 8Slide 3

Vocabulary industrial park enterprise zones e-commerce trade area

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 8Slide 4

Locating a Retail Business

The right location for your business depends on: the kind of business you plan to operate the type of customer you want to reach

Also consider whether you will have inside sales outside sales

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 8Slide 5

Downtown Areas

Positive features of a downtown location include: easy accessibility convenient access for downtown workers

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 8Slide 6

higher crime rate traffic jams a lack of

free or convenient parking customers in the evening

Negative features of a downtown location include:

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 8Slide 7

Neighborhood Shopping Centers consist of 3 to 15 stores good for stores selling goods or

services that people need to purchase frequently

rent is usually low convenient for local shoppers

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 8Slide 8

Community Shopping Centers

larger than neighborhood centers serve residents from many

neighborhoods large anchor stores can increase

customer traffic

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 8Slide 9

Regional Shopping Centers

designed to attract customers from an entire region

have 40 to 100 stores anchored by two or more large

department stores focus on apparel rents are high

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 8Slide 10

Super-Regional Shopping Centers largest classification of shopping centers more than 100 stores anchored by three or more department

stores very high rents not recommended for new businesses

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 8Slide 11

Stand-Alone Stores

may be located just outside of shopping centers or far from other businesses

depend on drive-by traffic less expensive rent advertising is often necessary

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 8Slide 12

Warehouses

among the cheapest rent few frills often charge customers lower prices heavy advertising required

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 1Slide 13

What are the main options for locating a retail business?

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Starting a Virtual or Online Business e-commerce

buying and selling products or services over the Internet

Chapter 1Slide 14

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Benefits of Virtual or Online Businesses an immediate presence business costs are less a global customer base is possible time restrictions are not a problem can electronically manage information

about customer behavior

Chapter 1Slide 15

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Virtual or Online Business Precautions Buy your own domain (web address). Use a creative website design that

appeals to customers. Be sure your website has a fast loading

speed. Keep your website current.

Chapter 1Slide 16

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 1Slide 17

What are some benefits of having a virtual or online business?

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 8Slide 18

Selecting Your Site

trade area the area from which you expect to attract

customers identify the location of

competitors businesses that would attract a similar

customer base but that would not compete directly with you

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 8Slide 19

Location Type and Availability

Determine which type of location is best for your business.

Determine what spaces of this type are available in your trade area.

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 8Slide 20

Evaluate the Location

Factors to consider when picking a location include: safety attractiveness Does the location attract your target

market? Is parking adequate? Are surrounding businesses thriving?

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 1Slide 21

What are some of the factors you should consider when selecting a site for your business?

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 8Slide 22

Lesson 8.2

Obtain Space and Design the Physical Layout

Goals Compare purchase and lease options. Describe layout considerations for

different types of businesses.

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 8Slide 23

Vocabulary tenant landlord gross lease net lease percentage lease visual merchandising

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 8Slide 24

Lease or Buy Space

Buying advantages include: You can receive a tax deduction on the

loan interest for the building. The loan payment may be no larger than a

lease payment.

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 8Slide 25

Most entrepreneurs lack the money to purchase property for their business.

You are locked into a specific location. You are responsible for building

maintenance costs.

Disadvantages of buying include:

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 8Slide 26

Commercial Leases

tenant the person who pays rent to occupy the

space owned by someone else

landlord the person who owns and rents out the

building or space

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 8Slide 27

gross lease tenant pays monthly rent landlord pays property expenses

net lease landlord pays building insurance tenant pays rent, taxes, and other expenses

There are three types of commercial leases.

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 8Slide 28

the tenant pays a base monthly rent the tenant also pays a percentage of monthly

revenue as rent most common for prime retail locations

percentage lease

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 8Slide 29

You should always consult with an attorney before signing a commercial lease.

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 8Slide 30

Compare Costs of Doing Business When deciding where to locate your

business you should calculate how much rent you will pay per customer.

Rent per customer =

Rent per month ÷ customers per month

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 8Slide 31

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 1Slide 32

Name three kinds of commercial leases.

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 8Slide 33

Design the Layout of Your Business Your layout needs to include space for:

employees customers merchandise equipment restrooms stockroom/storage offices

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 8Slide 34

Create the Floor Plan

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Chapter 8Slide 35

Layout of a Retail Business

visual merchandising the process of combining products,

environments, and spaces into an appealing display to encourage the sale of products or services

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 1Slide 36

It should attract customers to your store and keep them coming back.

It should meet the needs of your business.

The goal of your layout should be twofold:

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 8Slide 37

Hazardous materials should be safely stored.

Equipment and machinery should be positioned in a way that minimizes the potential for accidents.

Exits should be clearly marked and easily accessible.

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 1Slide 38

What are the major considerations for choosing a layout for a business?

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 8Slide 39

Lesson 8.3

Purchase Equipment, Supplies, and Inventory

Goals Explain how to find and choose vendors

for your business. List factors that determine the needed

level of inventory.

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 8Slide 40

Vocabulary inventory vendors quote reorder point

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 8Slide 41

Obtain Equipment and Supplies inventory

the products and the materials needed to make the products that a business sells to its customers

When starting a business, order the minimum quantity you need right now.

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 8Slide 42

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 8Slide 43

Identify Suppliers

vendors companies that sell products and services

to businesses

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 8Slide 44

Evaluate Proposals

quote an estimate for how much you will pay for the

merchandise or service

Other information to seek when obtaining quotes includes: quality of merchandise financing terms quantity discounts shipping and handling charges

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 1Slide 45

What should you consider when selecting vendors for your business?

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 8Slide 46

Purchase Inventory

For retailing and wholesaling: Inventory is a finished product purchased

with the intent of reselling it to customers.

For manufacturing: Inventory includes:

raw materials finished goods

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 8Slide 47

Purchase Inventory for a Startup Business As it is difficult to forecast actual sales,

a startup business should order just enough stock to fill its shelves.

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 8Slide 48

Purchase Inventory for an Ongoing Business reorder point

a predetermined level of inventory that signals when new stock should be ordered

Factors to consider when setting a reorder point include: how long it takes suppliers to get merchandise to

you monthly sales of the item how important it is for you not to be out of stock

Entrepreneurship: Ideas in Action 5e© 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter 1Slide 49

How do you determine the amount of inventory to keep in stock?