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HOW A NEW VENTURE CAN SOLVE MANAGEMENT CHALLENGES (PART 1)

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Finding The Appropriate Business Site

If a new venture cannot operate as a virtual organization, a significant part of the organizing process is finding an appropriate site for doing business. Most people are familiar with the three key factors for determining value in home sites: “location, location, location”. Similarly, the location of a business has a serious impact on its success.

 

Location determines who will see the business, how easily they can find it and access it (Is the business a ground-floor level and easily seen? Or is it out of site in a multi-storey building?), and whether or not they will want to access it (Is the neighbourhood safe? Is parking available?). Even businesses such as manufacturing, where the customer doesn’t come to the site, benefit from a location near major sources of transliteration.

 

Because many business owners view their business site as permanent, selecting the best site becomes a crucial decision that will need to be justified to investors, lenders, and others. Site decision generally begin at a micro level, considering first the state or region of the country, next the city, and then the parcel on which the facility will be located.

 

Choosing The Region, State, and Community

Locating a site for a new business normally begin with identifying the area of the country that seems best suited to the type of business being started. “Best suited” may mean that firms in a particular industry tend to congregate in a particular region, such as the high-tech firms that gravitate in a particular site.

 

For some businesses, “best suited” may mean that a state is offering special financial and other incentives for businesses to locate there. In other cases, “best suited” means located near major suppliers. Often, an entrepreneur starts a business in a particular region because that is where he or she happens to live. This may be fine during the incubation period, but soon, what the area contributes to the potential success of the business over the long term must be considered.

 

Economic Base

The economic base of a region or community is simply the major source of income for the area. Communities are viewed as primarily industrial, agricultural, or service-oriented. In general, industrial communities export more goods than they import. For example, suppose the community’s principal income is derived from farming and the associated products that it ships to other communities. This activity brings more money into the community.

Now suppose the citizens of the community must travel to another community to do major shopping. This activity takes money out of the community. An important thing to learn about any community being considered as the home base for the business is whether the money brought in from farming exceeds the money that leaves through shopping. If it does, the community appears to have a growing economic base, which is a favourable factor for a new business.

 

Entrepreneurs can learn more about the economic base of any community by contacting the state or regional economic development agency in the area. These organizations exist to bring new business into the region, so they have to stay on top of what is going on. They can provide all the statistics on the economic condition of the region as well as estimate the cost of doing business there.

Bernard TaiwoBernard Taiwo
Bernard Taiwo
I am Management strategist, Editor and Publisher.

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