PowerPoint Presentation

Section 9.1
 Pages 141149
9.1
Site Selection
What you’ll learn
 How
to determine a
community for your business
site
 The criteria to apply when
selecting a business site
9.1
Site Selection
What you’ll learn
 The
factors in location
analysis and decision making
 The advantages of starting a
business at home
9.1
Site Selection
Why it’s important
 Location
affects the visibility
and accessibility of a business
 After investing in land, a
building, fixtures or heavy
equipment, it may be difficult
or impossible to move.
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Site Selection
Key Terms
economic base
incentives
enterprise zones
Standard Metropolitan Statistical
Areas
census tracts
trade area
industrial parks
9.1
Site Selection
I. FACTORS IN SELECTING
A COMMUNITY
No matter where you settle,
there are certain questions to
consider.
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Site Selection
A. Is the economic base
favorable? Study a
community’s main source of
income, or economic base.
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Site Selection
B. Are there financial
incentives?
1. Incentives are advantages
that help businesses.
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Site Selection



Lower taxes
Cheaper land
Employee training
programs
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Site Selection
2. States can establish
enterprise zones that give
tax favored status to new
businesses.
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Site Selection
C. What is the makeup of the
population?
1. Look for information to
show if a location
matches a target market.
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Site Selection
2. The Census Bureau’s
Standard Metropolitan
Statistical Areas (SMSA)
are geographic areas that
usually include a
metropolitan area.
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Site Selection
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Site Selection
3. A census tract is a SMSA
subdivision containing
4,000 to 5,000 people.
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Site Selection
D. Does the labor supply match
your needs? Consider your
labor needs and how well
the community can meet
them.
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II. CRITERIA FOR SITE
SELECTION
Once a community is
determined to be suitable for
business, begin looking for
sites within it.
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Site Selection
A. A trade area is the
region or section of the
community from which
you can expect to draw
your customers.
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B. Number and Size of
Competing Businesses Mark all potential
competitors.
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Site Selection
C. Nature of the Competition Mark all potential
competitors.
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Site Selection
1. To encourage
comparison shopping,
locate your business
next to a similar sized
competitor.
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Site Selection
2. If you offer a large
variety of products,
your drawing power
may allow you to
locate away from the
competition.
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Site Selection
D. Character of the Area Consumers like to shop in
attractive, safe, and thriving
environments.
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Site Selection
E. Accessibility and Traffic If you find there is no
convenient route, or if the
site is difficult to locate,
customers are not going to
reach you.
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Site Selection
IV. SERVICE/WHOLESALE
BUSINESS
CONSIDERATIONS
Similar to retail, except many
service and wholesale
businesses don’t have clients
visiting their site.
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Site Selection
Reinforcement
Provide examples of
large and small trade
areas in your community.
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Site Selection
V. MANUFATURING/
EXTRACTION
BUSINESS
CONSIDERATIONS
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Site Selection
A. Extraction businesses must
be near to whatever they
are extracting.
1. Ore
2. Fish
3. Trees
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Site Selection
B. A manufacturing firm
may be located in certain
areas set aside for
industrial uses, sometimes
called industrial parks.
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Site Selection
Reinforcement
What are the advantages
and disadvantages of an
industrial park?
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Site Selection
VI. LOCATING POTENTIAL
SITES
A. Newspapers
B. Realtors
C. Internet
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Site Selection
D. Visual Surveys
E. Contacts
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Site Selection
VII. SITE ANALYSIS AND
DECISION MAKING
Analyze the surrounding
area, the building, and the
costs of buying, building, or
leasing.
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Site Selection
A. Surrounding Area Analysis Each potential site you
identify should be evaluated
on the same basis as your
earlier considerations.
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Site Selection
B. Building Evaluation A building must be big
enough to take care of
present needs and to allow for
expansion.
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Site Selection
C. Exterior Consider a building’s looks,
signage, and parking for
customers.
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Site Selection
D. Interior Look at the walls, floor, and
ceiling.
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Site Selection
E. Lease, Buy or Build There are advantages to
leasing over buying or
building.
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1. A large cash outlay is
avoided.
2. Risk is reduced.
3. Lease expenses are tax
deductible.
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F. Making Your Decision Consider the variables.
1. Cost comparison
2. Advantages and
disadvantages
3. Desirability
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Site Selection
VIII. HOME BUSINESS
OPTION
Working at home is viable
under certain conditions.
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Site Selection
A. When there is little
personal contact with
consumers
B. Where work is picked up
and dropped off when
completed
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Site Selection
End of Section 9.1