I will need my initial post and two classmate responses done. I am doing rental properties out of my home.
Imagine that a small business has three choices for location: leasing a spot in a mall, leasing a location in a central business district, and purchasing a stand-alone structure. The stand-alone site has ample parking and a traffic count of approximately 80,000 cars per day passing by at 35 mph. Foot traffic in the mall is the highest, but so is the lease payment, as well as the restrictions such as business hours. Foot traffic downtown is much less, but so is the rent. Which would you choose? List three reasons why.
Resources:
Chapter 4 and 5: The Harvard Business Review Entrepreneur’s Handbook: Everything You Need to Launch and Grow Your New Business
To complete this assignment, review the Discussion Rubric document.
1st classmate response needed
6-1 Discussion: Choosing the Best Location
Doug Yost posted Jun 9, 2021 7:25 PM
This is a great scenario. In my job, I have to evaluate and select real estate locations all the time so this really hits home with me because these are very real choices in the market. One of the questions that I ask our real estate team is how many cars per day (CPD) are there on the road in front of our potential site. I also ask the CPD on both roads when our potential site is on a corner. Needless to say, I would choose the stand-alone site with the 80,000CPD. (1) If you have good branding and visibility, traffic will solve your marketing initiatives. It is worth paying more for rent when you have this level of traffic in front of your business because it is like you are marketing the store every single day. Banners, Flags, Balloons, and great signage can market your business to 80,000 CPD. When you consider the cost to market to this many people on a daily basis, it would be a staggering amount over and above your facility costs, whether leasing or purchasing. (2) Being located on a road that has 80,000 CPD is a dream for a business, especially at 35 mph instead of highway speeds. Usually, to get this many CPD, it is a highway that runs in front of the store so this is a very special situation. In this case, the traffic will help you drive additional sales in your business because you have a built-in traffic supply. If this were downtown or in a mall, generating traffic would be an expensive challenge. So, being in front of 80,000 CPD helps generate the traffic needed to drives revenue in your business. This truly turns your business into a “numbers game”, which gives the business owner great flexibility in deploying multiple strategies to drive additional revenue, gross margin, or both. (3) With the location and CPD, the business can run promotions, host special events, drive initiatives via social media, hold collaborative events with other business partners, and even introduce new technology / products because of the size of the location and parking. With this visibility, the location can also serve as a fantastic location for charity events. Many times, radio stations or live streaming events will promote efforts to support a charity and this location would serve this need very well. This would allow the location to build some good will with the community aside from its core business and be seen as a good corporate citizen.
Having businesses in each of the options listed to choose from, the stand-alone site with the great traffic and large parking lot is an outstanding location and capable of long-term sustainability.
2nd response needed
office
Sasha Cash posted Jun 9, 2021 4:33 PM
So this is something that really depends on which business someone is working with. Mine is an animal sanctuary/rescue. This means that my main location would either be none of these, or would be the stand-alone structure. There is an option that I think would be better, though: having the sanctuary and rehab spot in a secluded area, such as on my property as originally planned, and then having the store-front adoption/donation center be in one of the locations.
Now, looking at these three options as more of an office location is considerably different. I think this is the only realistic way for my business to operate, as rehabilitating any animals would mean controlling their environment a lot in the beginning. Not to mention, the space would be an issue, especially with barnyard animals or wildlife. So, deciding on the office location would be done with a weighted decision matrix.
Note: this prompt doesn’t say whether the downtown or stand-alone location has the lowest rent, so I will rank them the same.
When I was doing this decision matrix, as I do with all of them, I don’t think of which one I want to win while I’m deciding on weights and ratings. That would, after all, defeat the purpose of the decision matrix. After I finished doing this, I was surprised to find out how low downtown scored. I thought that it was going to be better than the mall spot. There is a chance that I forgot an important category, since I did this rather quickly, but I don’t think that’s what happened here. This example is a huge reason that I like decision matrices.
As for at least three reasons to choose the stand-alone location, I think these are good: ample parking leads to easier access for everyone; rent is fair; the traffic driving by could be huge when it comes to bringing new people in; there would likely be less crowding and some space for doing meet-and-greets for possible adoptions; and business hours can be whatever works for my business.
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