83) The purpose for establishing incubators is enhancing economic development while grouping
similar types of businesses into a consolidated economy.
Topic: Business Incubators
AACSB: Analytic Skills
84) Poorly planned layouts undermine employee productivity and create organizational chaos.
Topic: Size
AACSB: Analytic Skills
85) New businesses should only plan or buy the space for which they have immediate need, to
conserve cash.
Topic: Size
AACSB: Analytic Skills
86) A store’s external appearance plays an insignificant role in identifying its personality to
customers.
Topic: External Appearance
AACSB: Analytic Skills
87) The Americans with Disabilities Act requires all companies to make their facilities accessible
to disabled customers and employees.
Topic: Americans with Disabilities Act
AACSB: Analytic Skills
88) Any company with 15 or more employees and any buildings occupied after January 25, 1993
must comply with the Americans with Disabilities Act.
Topic: Americans with Disabilities Act
AACSB: Analytic Skills
19
89) The key to determining what needs to be accessible is to determine what are the “primary
function” areas of the business.
Topic: Americans with Disabilities Act
AACSB: Analytic Skills
90) Buildings under three stories high or with less than 3,000 square feet per floor do not have to
have elevators.
Topic: Americans with Disabilities Act
AACSB: Analytic Skills
91) Signs are one of the most expensive and least effective ways available to small businesses for
communicating with customers.
Topic: Signs
AACSB: Analytic Skills
92) For a sign to be effective, its message must be complete and complex enough to be thought
provoking.
Topic: Signs
AACSB: Analytic Skills
93) The functional aspects of a building’s interior are more important than its exterior
considerations.
Topic: Interiors
AACSB: Analytic Skills
94) Changes in office design have a direct impact on workers’ job performance, job satisfaction,
and ease of communication.
Topic: Interiors
AACSB: Analytic Skills
20
95) When evaluating an existing building’s interior, the entrepreneur should pay particular
attention to the building’s structural components and the suitability for his/her business.
Topic: Interiors
AACSB: Analytic Skills
96) Wall coverings are expensive but essential in almost any small business for employee job
satisfaction and customer enjoyment.
Topic: Interiors
AACSB: Analytic Skills
97) Lighting is an inexpensive investment for improving employee performance and the overall
appearance of the business.
Topic: Lighting
AACSB: Analytic Skills
98) Layout of any retail facility requires the owner’s observation and understanding of customers’
buying habits.
Topic: Layout for Retailers
AACSB: Analytic Skills
99) Retail layout is the arrangement of merchandise in a store.
Topic: Layout for Retailers
AACSB: Analytic Skills
100) A retail layout should push customers into the store.
Topic: Layout for Retailers
AACSB: Analytic Skills
101) A retail layout should pull customers into the store.
Topic: Layout for Retailers
AACSB: Analytic Skills
21
102) Most retailers consider what customers want to experience when designing their spaces.
Topic: Layout for Retailers
AACSB: Analytic Skills
103) Merchandise purchased on impulse and convenience goods should be located near the front
of the store.
Topic: Layout for Retailers
AACSB: Analytic Skills
104) How does the entrepreneur choose the region of the country for his/her business?
Topic: Selecting the Region
AACSB: Analytic Skills
22
105) Identify and explain the criteria a small business owner should consider when selecting the
state in which to operate his/her business.
Topic: Selecting the State
AACSB: Analytic Skills
23
106) What factors should the small business owner consider when selecting the city location for
his/her small business? What is the index of retail saturation and how does it help a retailer in
making this decision?
Answer:
∙ POPULATION TRENDS. An entrepreneur should know more about a city and its
neighborhoods than do the people who live there.
∙ POPULATION DENSITY. The number of people per square mile can be another important
factor that determines the optimal business location. In many of the older cities in the eastern
United States, people live or work in very high-density areas.
∙ COMPETITION. Locations near competitors may offer labor pool advantages for
manufacturers and service-based businesses. Retailers may find that having similar businesses
located near one another increases traffic flow. This location strategy, known as clustering,
works well for products for which customers are most likely to comparison shop.
∙ COSTS. For many businesses, the cost of locating and operating is always critical to success.
Some entrepreneurs search for locations that are in the process of revitalization and locate there
while the entry cost is very low.
∙ LOCAL LAWS AND REGULATIONS. Before selecting a particular site within a city, small
business owners must explore local zoning laws to determine whether there are any ordinances
that would place restrictions on business activity or that would prohibit establishing a business
altogether. Zoning is a system that divides a city or county into small cells or districts to control
the use of land, buildings, and sites. Its purpose is to contain similar activities in suitable
locations.
∙ COMPATIBILITY WITH THE COMMUNITY. One of the intangibles that an entrepreneur
can determine only by visiting a particular city is the degree of compatibility that a business has
with the surrounding community.
∙ QUALITY OF LIFE. One of the most important, yet most difficult to measure, criteria for a
city is the quality of life it offers. Entrepreneurs have the freedom and the flexibility to locate
their companies in cities that suit not only their business needs but also their personal
preferences.
∙ THE LOCATION’S REPUTATION. Like people, a city or parts of a city can have a bad
reputation. In some cases, the reputation of the previous business will lower the value of the
location. Sites where businesses have failed repeatedly create negative impressions in customers’
minds. These negative impressions are hard to overcome and may prevent customers from giving
the new business a try.
Topic: Selecting the City
AACSB: Analytic Skills
107) Joe wants to open a retail outlet. Discuss with him the factors he should consider in
conducting a site selection analysis.
Topic: Location Criteria for Retail and Service Businesses
AACSB: Analytic Skills
108) Outline the nine areas from which the retailer and service business owner have to choose in
locating their stores. What are the advantages and disadvantages of each?
Topic: Location Options for Retail and Service Businesses
AACSB: Analytic Skills
109) What factors influence the choice of location for a manufacturer?
Topic: The Location Decision for Manufacturers
AACSB: Analytic Skills
110) What is a business incubator? What can an incubator offer an entrepreneur just starting out?
Topic: Business Incubators
AACSB: Analytic Skills
25
111) Why is external appearance an important consideration?
Topic: Layout and Design Considerations: External Appearance
AACSB: Analytic Skills
112) What impact has the Americans with Disabilities Act had on small businesses in terms of
building location and layout?
Topic: The Americans with Disabilities Act
AACSB: Analytic Skills
113) What is ergonomics and why is it important?
Topic: Interiors
AACSB: Analytic Skills
26