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ATTH 4140 > Chapter 7 > Flashcards

Chapter 7 Flashcards

1
Q

A business location is:

A
  • the place where you distribute the goods and services for your business
  • important for both your marketing and operational strategies
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2
Q

Location decision depends on 2 major factors:

A
  • what your customer believes is the best location

- your distribution channel

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3
Q

Distribution channel:

A

The method or way in which a producer makes a product or service available to the customer

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4
Q

2 broad distribution channel options:

A
  1. Direct distribution

2. Indirect distribution

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5
Q

Direct distribution:

A

Selling of goods and services directly to the consumer or end user

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6
Q

2 types of retailing channels:

A
  • store

- non-store

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7
Q

Indirect distribution:

A
  • wholesaling: selling of products to retailers for resale to the end user
  • franchising: a special kind of distribution system in which one company/individual (the franchiser) grants the rights to sell its products/services to another company/individual (the franchisee)
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8
Q

Your distribution strategy will depend on a number of factors, such as:

A
  • customer needs
  • type of business (B2C or B2B)
  • type of product/service
  • transportation costs
  • competition
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9
Q

Successful entrepreneurs take advantage of more than one _______ _____. Your physical location should depend on a ______ ______ strategy.

A
  • distribution channel

- multiple distribution

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10
Q

Reasons for the home-based trend include:

A
  • cocooning
  • 2 income families
  • higher productivity
  • improved service
  • downsizing
  • computerization
  • growth of service industry
  • increased efficiency
  • vigilant consumer
  • mobility
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11
Q

Potential advantages of home-based businesses:

A
  • low risk of expensive mistakes
  • opportunity to use household resources
  • low overhead
  • gradual start-up and growth
  • no commuting time or expense
  • tax advantages (with deductions allowed for part of the house)
  • relatively inexpensive way to test a market
  • reduced childcare costs
  • increased quality time with family
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12
Q

Potential disadvantages of home-based businesses:

A
  • isolation and lack of contact with colleagues
  • increased family stress
  • need for self-discipline
  • local by-laws and regulations
  • less established or refined image
  • conflict with neighbours
  • parking problems
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13
Q

Consider these items when operating a business out of home:

A
  • target market
  • neighbourhood mix
  • physical visibility
  • competitors
  • life-cycle stage
  • image
  • local/municipal licence
  • local zoning bylaws
  • space/physical requirements
  • approvals
  • insurance
  • utilities
  • work habits/behaviour
  • lifestyle
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14
Q

The best home-based business depends on your ability to connect your _____, ______, and ______ with current ____ _____.

A
  • values
  • experience
  • knowledge
  • market trends
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15
Q

Secondary sources of location information:

A
  • census
  • market research handbook
  • Statistics Canada website
  • Industry Canada website
  • local and regional governments
  • local resource centre or library
  • potential suppliers
  • private research companies
  • commercial real estate agents
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16
Q

Primary sources of location information:

A

to find the right location, practice new-eyes research

17
Q

Checklist to use before you sign commercial leases:

A
  • escape clause
  • option to renew
  • right to transfer
  • cost-of-living
  • percentage lease
  • floating rent sale
  • start up buffer
  • improvement
  • restrictive covenants
  • maintenance
18
Q

Building gross area:

A

The total square-foot area of the building when the enclosing walls are measured from outside wall to outside wall

19
Q

Usable building area:

A

The square-foot area within the building occupied by tenants, measured from centre partition to centre partition

20
Q

Common area:

A

The square-foot area of the building servicing all tenants in common, such as lobby, corridors, lavatories, elevators, stairs, and mechanical equipment rooms. The building common area is usually between 10 and 12% of the gross building area

21
Q

Gross rent:

A

A rental per square foot, multiplied by the rentable area, to determine the annual rent due on a lease, where the landlord provides all services and utilities, including tenant janitorial services.

22
Q

Net rent:

A

A rent per square foot multiplied by the rentable area to determine the annual rent due under a lease, whereby the tenant also pays, in addition to the rent, its pro rata of all utilities and services and real estate taxes

23
Q

Loss factor:

A
  • the proportion of usable building area to total rentable area
  • the lower the loss factor, the more usable space there is.
  • loss factors can vary from floor to floor in the same building.

ATTH 4140 (12 decks)

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