SBM Chapter 9

Customer Accessibility

For industries with high transportation costs. It is key for businesses that must provide handy access for targeted customers to avoid losing those customers to more conveniently located competitors. 

Business Environment

Factors affecting the location decision are climate, competition, legal requirements, and tax structure 

Availability of Resources 

• Proximity to important sources of raw materials and labor supply are critical for manufacturing businesses

• Access to key suppliers are key suppliers for retail outlets and restaurant operations

• Access to good transportation is important to many companies

Personal Preference

SB owners often choose to stay in their home community that may offer unique advantages such as general comfort with the atmosphere of a home community.

•  Easier to establish credit with hometown bankers

•  Personal connections to local businesses

• A better idea of local residents’ taste and preferences

• Friends and relatives in the community being supportive as customers

Site Availability and Cost

Entrepreneurs may find it valuable to seek professional assistance in determining site appropriateness. Many permanent alternatives include the shared office arrangement and “co working” movement which involves shared working spaces 

Business Incubator

A facility that provides shared space, services, and management assistance to new businesses 

Leasing Advantages

• A large outlay is avoided

• Risk is reduced by minimizing investment and postponing commitments for space

• Leasing in a high image area is more affordable than buying

• Focus can be on running the business rather than managing a property

Leasing Disadvantages

• A well selected purchased property appreciates in value

• No permission is needed to make changes or additions to the property 

Benefits of E-Commerce

• Allows new ventures to compete with bigger businesses on a more level playing field

• Blurs geographic boundaries and expands a small company’s reach

• Can help compress the sales cycle by reducing the time between receiving an order to converting the sale to cash

• The shorter cycle translates to quicker payments from customers and improved cash flows to the business 

B2B

a business model based on businesses selling to business customers electronically

C2B

a business model based on individual freelancers or affiliate marketers selling their services to business customers 

B2C

a business model based on selling to final consumers electronically 

C2C

a business model usually set up around online auction sites that allow individuals to list items available for sale to potential bidders

Disintermediation

The bypassing of a retailers by a producer or wholesaler in order to sell its product or service directly to the final consumer

Information Based Model

a website offers information about a business, its products, and other related matters

Content Based Model

A website that provides access to information but not the ability to make purchases. Rather than selling products or services, the website provides content for those who visit it usually with the hope of attracting visitors that can be monetized 

Transaction Based Model

A website set up to provide a mechanism for buying or selling products or services