In any business endeavor, an

entrepreneur must see to it that

he has a good location, even if
his business is small.
Many small entrepreneurs prefer to locate
their business in their own neighborhood
or hometown.
This has both advantages and disadvantages
and it has no guarantee of success or
failure. What is important is one’s
knowledge of the people within the
community and community development,
trends and needs.
 Inselecting an area in which to locate, it is
important to look first at the economic
condition of the town or area itself.

 After deciding to locate in a given

community, the next decision will be to
select an area within it. this involve a
number of personal and economic factors,
but perhaps the major factor is the kind of
business you want to start and amount and
kind of traffic he needs to sustain it.
Other businesses can be
located at some distance
from the home ground of
the customer because they
cater to mobile clientele. Of
course, cost factors such as
rent and transportation
enters into the picture.
Different kinds of location are available
within most towns or cities, each having
certain advantage or disadvantage for
your type of business.

 Central shopping district

 Neighborhood or suburban shopping
centers
 Highway or roadside location
 Site selection decision are not made
frequently, but finding the right site requires
careful consideration in this important
decision. It involves much more than simply
finding a site with the lowest cost per square
meter.
 The key is to determine which are the
important factors for your type of business
and then for each one ask yourself:
 What do I need?
 What is available?
 What can I afford?
 Have you ever noticed that the bid chain
stores like SM, Robinsons and national
Bookstore and franchise operations such
as McDonalds and seven eleven always
seem to select the best location?
That is because they make a painstaking
survey before a site. The more completely
you analyze prospective sites, the better
chance you have one for selecting the
best one.
A. Background of site selected
 Itsis wise move to always find out who
previously occupied a building if it was
empty. Try to determine why they left. It
may turn out that area was not large enough
to support the previous business.
B. Profile of Neighboring
Business
 the size character, and location of
surrounding businesses al also important.
C. Customer convenience
 Costumerswill generally go first to a place
where they would need to spend minimum
time and effort.

D. General Business
Atmosphere
 Before putting up a business in a particular
place, an entrepreneur must know what he is
facing, in terms of the general atmosphere
that he will be in.
E. Environmental Aesthetics
 Theaesthetic characteristics of the
environment can play the big role in
the success of your selected area or
location.
F. Local Custom
 Every area has a few peculiarities resulting
from its own individual circumstance.
 Do shoppers tend to shop on one side of the
street rather than or both side?

G. Cost-of-Occupancy
 Itgoes without saying that in order to get a
good location , one should be prepared to
pay a fair rental. Here are some very general
cost-of-occupancy factors that a start-up
entrepreneur must consider.
High rent
-high value of merchandise in proportion to
bulk
-window display important
-high rate of sales turnover
-low gross margin per item
Low rent
-low value merchandise in proportion to bulk
- Floor rate of sales per turnover
- Low rate of sales per turnover
- High gross margin
 Below is a checklist focusing on wide
range of factors, which could guide
entrepreneurs when surveying a site
location. For many entrepreneurs, this
checklist may be important as it could
help them in determining whether or not
some items indicated therein would need
alteration, installation, replacing,
removal or cleaning.
A. Traffic flow
1. Sex of pedestrians
2. Age of pedestrians
3. Destination of pedestrians
4. Number of pedestrians
5. Vehicle count
6. Peak hour traffic flow
B. Transportation facilities
1. Bus
2. Train
3. jeepney
4. Transfer point
5. Roadway entrance and exits.
C. Parking facilities
1. Large and convenient
2. Large enough but not convenient
3. Convenient but too small
4. Inadequate

D. Building exterior
1. face of building
a. Types of painting done
b. condition of paint
c. condition of finish
d. color
2. Electrical signs
3. Display windows
a. glass
b. base
c. platform
d. lighting
e. ventilation
f. roof covering
4. Front entrance doors
5. Back door
6. Steps
7. Footpath
9. Incinerator or garbage din
E. Building interior
1. Floors and floor covering
2. Walls and ceilings
a. material
b. condition
c. color
3. structural obstacles
4. Electrical wiring
5. water piping
6. gas piping
7. toilets
8. wash basins and sinks
9. lighting fixtures
F. Overall suitability of facilities
1. frontage
2. Depth
3. Shape
4. Condition
5. cost

Entrepreneurs can make use of these checklist

because they are easy to adopt but suffer
from some drawbacks. This checklist cannot
specify the relative importance of various
factors and they do not always give you the
means to effectively compare one site with
another.
One suggestion is use the following steps:

Pick the five most important location factors for

1.
your particular business.
2. Rank the five location factors in order of
importance.
3. Weight the five location factors according to
their order of importance.
4. Evaluate each factor and give it some score
based on the following scale:
Good=5, Average =3,Poor =1
5. Multiply each factor’s weight by its evaluation
score.
6. Find the total score for the site under
consideration.
Here is an example for one site.

Rank factors weight good(5) average(3) poor(1) Total

1 Visibility 5 3 15
2 Access 4 5 20
3 Appearance 3 1 3
4 Cost 2 3 6
5 Parking 1 5 5
total score for this site 49
These steps can be used to filter out
good possible sites for the new
business. If you repeat these steps
for other prospective sites, you will
come up with scores that you can
compare to help you to decides
which of the good sites.
A rental or lease agreement is a
legal contract between two parties.
Once you and your landlord enter
into lease, you are both bound by its
conditions. A lease represents your
right to carry on a business in a
particular location.
a.Rental Payments
Rent can be calculated in a number of
different ways. The most common ones
are:
 a base rent, usually calculated on a cost
per square meter basis
 a base rent with an annual escalation rate
based on changes in the consumer price
index.
 base rent plus a percentage of gross sales;
or
 Total rent as a percentage of gross sales.
For most businesses in the Philippines, the
most frequently used rental methods is a
fixed rate which is usually paid monthly. In
some establishments, the rental methods is
fixed rent plus a certain percentage on gross
sales over and above a gross sales target.
b. Term of lease
This is the length of time you may occupy the
premises. When the lease term is up, you
may not able to renew or extend it. that
means you may have move and therefore
lose the goodwill you have built up in the
location.

c. Lease Restrictions
During the term of the lease, there are certain
business activities which a lease is permitted
to carry. These are also restrictions indicated
in the rental agreement which the lessor
must follow.
d. Right to Transfer or Assign The Lease
It is important that the rental agreement
should give the start-up entrepreneur the
right to transfer or assign the lease. If you
should decide to sell the business, you need
to be able to transfer the lease to the new
owner.

e. Other Provisions
A lease or rental agreement is a significant
legal contract that a new entrepreneur
should read in detail. Preferably, he should
have it reviewed by a lawyer before he sign
it.
Some of the types of previsions that may need
closer attention are:
 Compulsory membership in a tenant’s
association;
 Parking provisions;
 Common areas in a shopping center;
 Sharing of expenses with the landlord or
other tenant’s
 General conduct of the business;
 Storage of food;
 Disposal of waste;
 Receiving delivery of foods
 Repair and repainting of premises;
 Amount required for small rental advance
and deposit;
 Landlord’s right to enter the premises;
 Compliance with various laws and
regulations;
 Insurance; and
 Default conditions and remedies.
 Interiorlayout and arrangement is very
vital part of one’s business. When
designing the interior layout of a store,
the entrepreneur must always keep in
mind that the major function of being in
business is to sell a product or service
effectively.
In determining a layout, always consider the:

 Types of product or service offered;

 Types of store;
 Building construction;
 Number of customers expected at peak
volume;
 Number of employees and facilities for them;
 Fire, security and protective measures;
 Service for appliances or other items; and
 Operating expenses for the whole store and
for individual sections of it.
a. Customer Flow
There is always a variation in the inflow and
outflow of customer in every store or
business. Customers moving in and out of
your front door behave just about as people
do on the street.

b. Importance of Good Selling Space

Because the space nearest the traffic flow
offers the greatest exposure to customers, it
has the greatest sales potential. For this
reason, the front part of your store is always
the most valuable.
c. Interior display
 Have you ever noticed how some stores
make it harder for you to stop while others
make it easier? The way in which you display
your merchandise is one way competitive
strength.
 The three key factors in interior display are
fixtures, color and lighting.
 Research has shown that customers are
attracted more by sight(87%) than by the
other sense-sound (7%), smell (3.5%),touch
(1.5%), and taste ( 1%). This means that the
customer must be able to see and identify
every item that you have for sale at a
glance.
 Fixtures
Your display space is one more of your most
valuable selling assets, especially for
stores that sell their items on shelves,
such as supermarkets, etc. its use should
be apportioned according to its
contribution to sales and profits.
 Color
Color can help in creating a buying mood or
destroy it. generally, your color scheme
should be subtle and blend wee with the
store merchandise and fixtures.
For example, you could tastefully blend a
family of colors such as beige, cream, and
ivory with a brown contrast.

 Coloris an especially important ingredients

in motivating the customer to buy goods that
fashionable.
 Lighting
Nowadays, a lot of the store being put
up have good and effective lighting
in them to further increase their
competitive advantage. Effective
lighting catches the customer’s eye
and calls attention to the product.
Use of lighting:
 Use large area lighting fixtures and
incandescent down lighting to avoid shadows
when displaying large objects.
 Use general diffuse lighting accented with
point-types spotlight to emphasize particular
products.
 Use concentrated beams of bright
incandescent light to add highlights to shiny
objects.
 use low-intensity overhead lighting plus
oblique directional lighting to highlight
colors, patterns and textures.
 Modern shopping malls like SM and Robinsons
represent the most sophisticated
development in retailing. It is intended to
draw a large number of customers by
offering the ultimate in variety and
convenience.