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41 Cards in this Set
- Front
- Back
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What isP the most common type of commercial lease for a prime retail location?
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Percentage lease
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A magazine devoted to a particular industry is called?
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A "trade magazine"
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What are the large stores that the major tenants in a shopping center called?
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Anchor stores
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A section of land that is zoned for industrial businesses. only.
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Industrial park
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Companies that sell products and services to other businesses are called ...
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Vendors
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An estimate for how much you will pay for merchandise and services.
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Quote
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The person who owns or rents out buildings or space.
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Landlord
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Areas that suffer from lack of employment opportunities.
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Enterprise zones
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The person who pays rent to occupy space owned by someone else.
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Tenant
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A predetermined level of inventory that signals when new stock should be ordered.
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Reorder point
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The area from which a business expects to attract customers.
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Trade area
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A lease in which the tenant pays rent each month for the space occupied, and the landlord covers all property expenses for that space.
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Gross lease
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A lease in which the landlord pays building insurance, and the tenant pays rent, taxes, and any other expense.
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Net lease
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According to Mr. Wojnar - what are the 3 most important factors when starting a business?
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Location, Location, Facility
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Expenses that are constant and do not change from month to month and are not related to the amount of sales you make.
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Fixed Expenses
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Expenses that change from month to month based on the amount of sales or units produced.
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Variable expenses
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A type of businessthat is characterized by a high volume of units sold but a low profit margin per unit (ex. grocery store)
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High volume/low margin business
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A type of businessthat is characterized by a low volume of units sold but a high profit margin per unit. (ex. luxury car sales)
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Low volume/high margin business
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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.
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Medium volume, medium margin business.
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What are the 3 ways to increase profits?
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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 |
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What are usually the 2 highest costs associated with most businesses?
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1. Payroll
2. Rent/mortgage expense |
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The right location for your business depends on what 2 factors?
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1. The type of business you want to run (retail/non-retail)
2. Type of customer you want to reach. |
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What are the 3 types of non retail locations?
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1. Service businesses
2. Wholesale business 3. Manufacturing business |
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Often called strip malls - usually have betweeen 3-15 stores.
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Neighborhood Shopping Centers
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Restaurants, hair salons, dog grooming, lawyers, accountants, car washes and auto body shops are all examples of what type of business?
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Service business
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What are the 6 main reasons for an increase in home-based businesses?
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1. Cost savings
2. More freedom 3. Convenience 4. Technology |
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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.
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TIF zones
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In a TIF zone, how long are the taxes paid to the city of Chicago frozen?
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23 years
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List the 6 advantages of leasing property for your business.
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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 |
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What are the 3 advantages discussed in class for purchasing the property for your business?
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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. |
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How do you compute the square footage of a store?
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lenth x width = square footage
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What is the average size of an anchor at a mall?
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100.000 square ft.
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What area has the highest rent per square foot in the U.S.?
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Fifth ave. in New York city
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How do you calculate "rent per customer"?
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Rent per month divided by Projected customer traffic
(Rent per month/projected customer traffic) |
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merchandise that a business sells to its customes or uses in the production of a product.
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Inventory
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What is the intent of inventory in a wholesale or retail store?
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To resell it to a customer
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What is the intent of inventory in a manufacturing business?
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To be used in the production of a product.
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What are the 6 consequences of stocking too much inventory?
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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) |
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What is zoning?
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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
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What are the four major classifications of zoning?
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1.commercial
2. industrial 3. residential 4 agricultural |
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What is a "Grandfather Clause"?
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A provision in which an old rule continues to apply to some existing situations, while a new rule will apply to all future cases.
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