Business Location - Training Transcript

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Business Location

Training Transcript
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(Slide 1)

Free Online Business Training - Week Two - Writing Your Business Plan
www.baanabaana.com | Facebook.com/Baanabaana | @Baanabaana | info@baanabaana.com

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Welcome
Hi everyone! Welcome to Week 6 of our Free Business Start Up Training webinar series.

(Slide 2)
Training Overview

Last week we learned about what I call the heart of any business, financing your business and
money management. We talked about why it is important for you, as the business owner to
have the knowledge and skills necessary to understand, communicate, plan and manage the
financial aspect of your business. We also learned some of these vital skills such as pricing
your product or services, calculating your breakeven point etc.

This week we will move on to finding the perfect location for your business – what to consider,
the options, how to go about selecting the “best”, what to avoid etc.

(Slide 3)
Topics
The 4th P In The Mix
Distribution Channels
Selection Criteria
Cyber Spaces
Leases & Contracts
What To Do / What Not To Do

(Slide 4)
The 4th P

Business locations, also call Place is the 4th P in the Marketing Mix, a business tool used by
marketing professionals. Locations decisions are not and should not be made independently,
but as part of your business’s overall marketing plan. Deciding how your product or services
will get into the hands of your customers must be aligned with your marketing strategy.


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Your location considerations must be consistent with the type of product or service you offer,
the image your want to establish in the minds of your customers, the quality and price of your
offerings. For example, if you plan on selling handmade, premium quality leather shoes, you
probably should not consider selling them at the local weekend flea market, even if the space
is free of charge!

Location is also not just about the overall neighborhood and surroundings but also about the
specific details of the space where your products or services are offered and the packaging. If
you an attorney representing low income immigrant families for example, your clients may
feel rather uncomfortable coming to your luxury office suite complete with a doorman in the
posh part of town, if they can afford to even get there.

It is also important to bear in mind that no matter how great a location you find, no matter
how perfect it fits in the mix, it has to be economically viable. You have to be able to afford it.

(Slide 5)
Distribution Channels

Who you sell your product or services directly to also has a part to play in your location
considerations. Whether you choose to sell directly to consumers, retailers or wholesalers /
manufacturers, each would a different impact on your choice of location as well as advantages
and disadvantages for your business.

Selling direct to consumers through a retail outlet, door-to-door, mail order or the Internet
may require a store front, inventory storage facilities, an e-commerce website, and/or a
periodic catalog to put your wares in the hands of your customers. The expenses involved in
these can add up but you will get first hand feedback about your product/service and the
delivery channels straight from the horse’s mouth which will allow you to make adjustments.

When you sell directly to retailers who would in turn sell your products to the end user, you
will be spared some of the expenses associated with selling directly to the consumer but you
will be one step remove from the consumer thus delaying the vital feedback that can help in
fine tuning your products.


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If you choose to sell to wholesale companies or your products become part of a larger finished
product, you would tend to worry less about locations and distributions systems but your
production and sales volumes would be larger. The downside to this channel is loss of brand
or identity. Nobody knows the company that supplies screws to Ikea, the international
Swedish DIY furniture company for example.

(Slide 6)
Selection Criteria
The criteria for selecting a location are not universal. The things you’d consider and questions
you’d ask yourself would depend on the nature of your business. Regardless, some questions
to ask when deciding on a location could be:

 Zoning – would you need a permit and would you be able to get one
 Neighborhood – what is the demographics of the neighborhood you are looking into? –
high/middle/low end income, population, etc. Does this match you positioning?
 Competitors - How close are they?
 Traffic – high/low traffic area – for both cars and pedestrians?
 Parking area. Free, paid?
 Public transportation?
 What utility are available services?
 Will a shared space work?
 Is there room for expansion?

Be sure to walk through the area and talk to other business owners, customers, landlords,
employees to get more insight into the potential of the location

(Slide 7)
Cyber Spaces
If your business is an online business, some of the costs, considerations and selection criteria
that you’d consider for a physical location will obvious not apply but there still has to be some
planning and your website will still need to be aligned with your marketing strategy. If your
positioning is high end for example, you cannot just get a free website under another domain


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name such as weebly.yourbusinessname.com. Things to consider before choosing to create a
cyber location are:

 Are you customer even online to begin with?
 Online market places (eBay, Amazon, Etsy) or build your own site
 Payment systems – what payment systems works best for your customer base? For
example, Paypal may not be available in some countries
 Shipping and handling – if you have to mail products, how reliable is your mailing system?
Who pays for shipping and handling fees

Cyber space can be a secondary/complementary location or a space to provide additional
information.

(Slide 8)
Leases & Contracts

There is no doubt that the ideal location for most small business owners would be their own
space such as their home or on property they own. This is not always possible however. For
example, you may have a big useable garage but zoning restrictions will not allow you to set
up a carpentry workshop. Or you may have been using your garage to sort, package and mail
out your Internet sales orders but now business is growing and you are running out of space to
accommodate your 5 new employees.

In this case and in most cases, you will need to rent/lease a space and the leasing terms and
contract can make or break your business because rent is probably going to be one of your
largest monthly expense. For example if you are not successful in your first location but you
signed a 5 year contract, the cost of breaking that lease can cost you your business. Some
things to consider before signing a lease are:

 It the rent fair for the location? Pay fair rent for good location, not cheap rent for a bad
location
 Are your lease terms flexible to allow for growth or downsizing if necessary?


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 Consider consulting with a real estate lawyer – contract can be complicated, having a
professional helping you negotiate terms can save you a lot of money and hassle in the
future

(Slide 9)
What To Do / What Not To Do

Do Don’t
 make sure the location is in line with  don’t forget to align with your budget
your marketing plan  focus on rent alone
 walk the area and talk to others  go online if your customer are not there
 make sure your specific needs will be  be hasty
met  rely on realtors or landlords for advice
 consider room for expansion
 seek legal advice before you sign a
lease

(Slide 10)
This completes our session today. Once again thank you all for being here and we hope you
found this session helpful. Please join us again next week when we will be talking about the all
important location, location, location. As always, please help us improve this training by giving
your feedback in the survey at the end of this training.

Have a great weekend!


Business Location - Training Transcript

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