Chapter 9: The Location Plan
CHAPTER 9: THE LOCATION PLAN
CHAPTER OUTLINE
Spotlight: The Icebreakers
(www.icebreaker-sf.com)
1) Locating the Brick-and-Mortar Startup
LO1: Describe the five key factors in locating a brick-and-mortar startup.
a) The Importance of the Location Decision
i) Brick-and-mortar store – traditional physical store from which businesses have
historically operated
ii) Choice of location more vital to some businesses
(1) As this topic is discussed have students indicate where they purchase products
and tell why they choose that location.
(2) Ask students whether they live on campus or off campus. Then ask them to
give the advantages and disadvantages of living on campus or off campus.
Then have them relate those advantages and disadvantages to business
locations.
b) Key Factors in Selecting a Good Location
i) Exhibit 9.1 Five Key Factors in Determining a Good Business Location
ii) Others factors relevant to the location decision include the following:
(1) Neighbor mix
(2) Security and safety
(3) Services
(4) Past tenants’ fate
(5) Location’s life-cycle stage
iii) Customer Accessibility
(1) Ask students why they are sitting in their particular seat in class. Does their
seat selection have anything to do with the person sitting next to them
(boyfriend or girlfriend)?
(2) Convenience goods require location close to target customers
(3) Services must be readily accessible
(4) Access critical for some businesses
(5) Site-selection software helps business owners
iv) Business Environment Conditions
(1) Can hinder or promote success
(2) Competition, legal requirements, tax structure, weather
(3) Enterprise zones – state-designated areas that are established to bring jobs to
economically deprived regions through regulatory and tax incentives
v) Availability of Resources
(1) Access to Raw Materials
(2) Suitability of the Labor Supply
(3) Availability of Transportation
vi) Personal Preference of the Entrepreneur
Chapter 9: The Location Plan
ii) Family Lifestyle Considerations – desire to spend more time with family
members
b) The Challenges of Home-Based Businesses
i) Professional Image – major challenge, critical to maintain professional office
ii) Legal Considerations
(1) Zoning ordinances – local laws regulating land use
(2) Tax issues – must have a separate space to claim a tax deduction
4) E-Commerce: Locating a Startup on the Internet
LO4: Understand the potential benefits of locating a startup on the Internet.
i) What is E-Commerce? – Paperless exchange of business information via the
Internet
a) Benefits of E-Commerce to Startups
i) Allows new venture to compete with bigger businesses on a more level playing
field
ii) Can compress the sales cycle reducing the time between receiving an order and
converting the sale to cash
iii) Electronic Customer Relationship Marketing (eCRM) – electronically based
system that emphasizes customer relationships
b) E-Commerce Business Models
i) Discuss M-Commerce with students. How have cell phones such as the iPhone
helped or hindered this type of commerce?
ii) Group of shared characteristics, behaviors, and goals that a firm follows in a
particular business situation
iii) Type of Customers Served
(1) Business-to-business models (B2B) – business model based on selling to
business customers electronically
(2) Business-to-consumer models (B2C) – business model based on selling to
final consumers electronically
(a) 24/7 e-tailing – electronic retailing providing round-the-clock access to
products and services
(b) Disintermediation – situation where a wholesaler in a B2B operation
chooses to bypass the “middleman” and sell its product or service directly
to the final consumer
(3) Consumer-to-consumer models (C2C)- business model usually set up around
internet auctions sites that allow individuals and companies to list items
available for sale to potential bidders.
(4) Auction Sites – web-based businesses offering participants the ability to list
products for consumer bidding
iv) Nature of Online Presence
(1) Information-based model – business model in which the website provides
information about a business, its products, and other related matters but
doesn’t charge for its use
(2) Content-based model – business model in which the website charges a fee for
access to information but does not offer the ability to buy and sell products
and services
