For service businesses, such as restaurants, dry cleaners, print shops, etc., the equipment can be expensive. Machinery and equipment are critical assets to helping launch a business. These data can be found through local commercial realtor offices, city or county government offices, and local associations. One approach is to make an assessment of your sales per square foot and compare those to sales of similar companies in the same industry or market. Factors to assess are location, visibility, foot traffic (how many potential customers walk by), how well the building has been maintained, the maintenance it will need in the future, how long you would want to stay in that location, and the insurance, property tax, and renovation costs, or the cost to build a new building. Experts recommend that you allocate only a certain percentage of your sales to your lease or purchase some businesses use industry averages as guidelines. Knowing the limit of your budget (discussed in the next section) should help you focus on locations that you can afford. Your facility needs will depend on the type of product or service you are offering and vary in scope from office space to a food truck to a manufacturing facility to a storefront for sales. (credit (a): modification of work by “icethim”/Flickr, CC BY 2.0 credit (b): modification of work by “osseous”/Flickr, CC BY 2.0) Place of Operation The warehouse shown in ( Figure 14.2) would be considered a tangible resource for a tire (product-based) company.įigure 14.3 Resources needed for a doctor’s office include (a) furniture, decorations, and amenities for a waiting room and check-in areas, as well as (b) rooms with medical equipment and supplies in which to see and treat patients. A product-based business uses tangible resources in the production of goods sold to customers, such as raw materials, land, facilities, buildings, machinery, computers, supplies, and vehicles. Tangible resources differ between product-based and service-based businesses. Tangible resources are assets that have a physical form. Assets (see Entrepreneurial Finance and Accounting) are property or resources that create a benefit to the person (or company) who owns them. These assets are essential in the operation of the business enterprise. Tangible ResourcesĪs you can imagine, resources needed for the enterprise are varied and can have different attributes. But before we delve into allocation, let’s examine the general categories of resources needed in just about every new venture: tangible, intangible, and financial. Much of that research also applies to questions surrounding resource allocation. Entrepreneurial Marketing and Sales covered primary and secondary sources of information and how to make use of the information gleaned from them for marketing purposes. Many entrepreneurs make the mistake of moving forward in their business endeavor without taking enough time to research their industry and determine what resources are required to help their business not only get off to a positive start but also the resources needed for its continued operation. This discussion focuses on the various resources that entrepreneurs need to start, maintain, and grow an enterprise, and, in general, how to procure those assets. You have learned about many opportunities for entrepreneurs to explore and the processes that ensure their success.
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