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Entrepreneurial Finance: Fundamentals of Financial Planning and Management for Small Business by M. J. Alhabeeb

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CHAPTER 16 LOCATION AND LAYOUT

AMONG THE MANY management decisions that have to be made is the decision on the geographical location of the business and the physical setting and layout of the facility where the business operations are conducted. This decision takes its importance from the fact that it is among the few long-term decisions that have a lasting effect on the business. Therefore, once it is made, the owner and managing team have to live with it for a long time. Although such a decision has to be made, in most cases, at the start when the business is established, there could be a need to make the decision later on in cases of expansion and relocation. Selecting the right location and layout would have a significant impact on the business efficiency, and ultimately on its profitability. For this reason, and for the fact that it involves a great deal of expense, planners and managers have to be very careful and thoughtful in their decision process. For certain businesses, choosing the location would be a matter of make it or break it, while it might not be that crucial for other businesses. It all depends on the type of business, its market, region, and other factors. It is well known that the upper management of the national franchise chains would prefer to spend a significant amount of money on selecting the right location of its branches for they know, by experience, how much they can get back if the choice is right. Generally speaking, the major criteria for making ...

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