Q5. Explain the various criteria in selecting a suitable location
Answer : OBJECTIVE:
A poor location or a poorly negotiated lease can cripple a wonderful business. Every business has its own location criteria. In this session you will define your criteria, learn how to select the right location, create a site model, and recognize the important aspects of a lease agreement.
You can create your own “Site Model” in order to maintain objectivity when evaluating locations for your business. This can be done by assigning different values to the factors that are most important for your particular business. Then each location can be evaluated against these measurements.
Real estate dealmakers concerned with buying, selling or leasing all require possession of expert negotiating skills. Since it has been determined that negotiating is a learned skill and not a natural one, our session “Develop Negotiating Skills” in Building My Own Business is recommended.
Some things to keep in mind in site selection:
There’s no such thing as the “last good location.”
Copycatting your most successful competitor’s site criteria can help you avoid making mistakes.
If you are building a chain of stores, never sign a lease on your second location until your first location is profitable and proven.
It is better to pay fair rent on a great location than pay great rent on a fair location.
Don’t rely on leasing agents to make your site decisions.
Driving streets and walking neighbourhoods is a good way to scout for locations.
The following form will give you a methodical approach for evaluating the strengths and weaknesses of each potential location.
First, evaluate your site location for each factor on a scale of 1 to 10, Number 10 being the highest.
Second, decide the importance of each factor to your particular business on a scale of 1 to 5, Number 5 being the most important.
Multiply the grade by the weight to determine the points for each factor. Add up the points to get a total score. Repeat this process for each site to gain an objective, comparative analysis.
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Site Criteria Table |
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| Factors |
Grade 1-10 |
Weight 1-5 |
Points |
| Traffic count: Cars or pedestrians |
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| Visibility access |
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| Proximity to competition |
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| Zoning |
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| Parking (include off-street parking) |
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| Condition of premises |
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| Proximity to customer generators |
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| Income level of neighbourhood |
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| Population density |
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| Ethnic makeup of neighbourhood |
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| Age factor |
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| Directional growth of area |
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| Area improving or deteriorating |
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| Crime/shoplifting rates |
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| Availability of qualified employees |
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| Labour rates of pay |
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| Supplier proximity |
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| Terms and rental rates |
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| Adequacy of utilities, gas, & water |
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| Transportation accessibility |
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Total Points |
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Q6. The table on the below presents the data regarding actual demand and forecasts for two products, X and Y, in the six months from January 2012 to June 2012. Using moving average (6 months), make demand estimates for products X and Y for the months July 2012, August 2012 and September 2012.
Month
Jan-12
Feb-12
Mar-12
Apr-12
May-12
Jun-12
Actual Demand
Product X
Demand
2680
2600
2350
2630
2400
2620
Product Y
Demand
1260
1220
1200
1290
1220
