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41 Cards in this Set

  • Front
  • Back
What isP the most common type of commercial lease for a prime retail location?
Percentage lease
A magazine devoted to a particular industry is called?
A "trade magazine"
What are the large stores that the major tenants in a shopping center called?
Anchor stores
A section of land that is zoned for industrial businesses. only.
Industrial park
Companies that sell products and services to other businesses are called ...
An estimate for how much you will pay for merchandise and services.
The person who owns or rents out buildings or space.
Areas that suffer from lack of employment opportunities.
Enterprise zones
The person who pays rent to occupy space owned by someone else.
A predetermined level of inventory that signals when new stock should be ordered.
Reorder point
The area from which a business expects to attract customers.
Trade area
A lease in which the tenant pays rent each month for the space occupied, and the landlord covers all property expenses for that space.
Gross lease
A lease in which the landlord pays building insurance, and the tenant pays rent, taxes, and any other expense.
Net lease
According to Mr. Wojnar - what are the 3 most important factors when starting a business?
Location, Location, Facility
Expenses that are constant and do not change from month to month and are not related to the amount of sales you make.
Fixed Expenses
Expenses that change from month to month based on the amount of sales or units produced.
Variable expenses
A type of businessthat is characterized by a high volume of units sold but a low profit margin per unit (ex. grocery store)
High volume/low margin business
A type of businessthat is characterized by a low volume of units sold but a high profit margin per unit. (ex. luxury car sales)
Low volume/high margin business
This type of business that usually does not appeal to people who are looking for bargains and does not carry the types of products that appeal to the luxury crowd.
Medium volume, medium margin business.
What are the 3 ways to increase profits?
1. Increase sales volume (# of units)
2. Increase margin (an increase in the profit per unit sold) -may lead to a decrese in sales.
3. Decrease costs
What are usually the 2 highest costs associated with most businesses?
1. Payroll
2. Rent/mortgage expense
The right location for your business depends on what 2 factors?
1. The type of business you want to run (retail/non-retail)
2. Type of customer you want to reach.
What are the 3 types of non retail locations?
1. Service businesses
2. Wholesale business
3. Manufacturing business
Often called strip malls - usually have betweeen 3-15 stores.
Neighborhood Shopping Centers
Restaurants, hair salons, dog grooming, lawyers, accountants, car washes and auto body shops are all examples of what type of business?
Service business
What are the 6 main reasons for an increase in home-based businesses?
1. Cost savings
2. More freedom
3. Convenience
4. Technology
A development too that generates tax revenues that stay in the neighborhood based on an increase in the value of the real estate of the business.
TIF zones
In a TIF zone, how long are the taxes paid to the city of Chicago frozen?
23 years
List the 6 advantages of leasing property for your business.
1. Entrepreneur does not have enough money to buy at the beginning
2. May be able to lease a bigger area than they could afford to buy
3. Lower down payment
4. Easier to get out of a lease than sell property
5. Many of the mainternance expenses are paid by the landlord
6. Association may handle special events
What are the 3 advantages discussed in class for purchasing the property for your business?
1. All of your payment goes toward ownership of the property.
2. Mortgage payment may be as low or close to a rent payment
3. Tax advantages (ex. get to write off interest on loanl, real estate taxes paid, and maintenance costs.
How do you compute the square footage of a store?
lenth x width = square footage
What is the average size of an anchor at a mall?
100.000 square ft.
What area has the highest rent per square foot in the U.S.?
Fifth ave. in New York city
How do you calculate "rent per customer"?
Rent per month divided by Projected customer traffic
(Rent per month/projected customer traffic)
merchandise that a business sells to its customes or uses in the production of a product.
What is the intent of inventory in a wholesale or retail store?
To resell it to a customer
What is the intent of inventory in a manufacturing business?
To be used in the production of a product.
What are the 6 consequences of stocking too much inventory?
1. Funds can't be used for other purpose
2. loss of perishable goods
3. Storage costs on seasonable goods
4. Interest paid on loans accumulates
5. Work slowdown/stoppage
6. Demand for product drops further (fads)
What is zoning?
Zoning is the way the governments control the physical development of land and the kinds of uses to which each individual property may be put
What are the four major classifications of zoning?
2. industrial
3. residential
4 agricultural
What is a "Grandfather Clause"?
A provision in which an old rule continues to apply to some existing situations, while a new rule will apply to all future cases.