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Relocating An Existing Business Term Paper

Relocating and Existing Business Business Relocation Literature Review: Ronnie's Place Convenience Store Four Oaks, NC

One of the most integral parts of successful business transitions of any kind is associated with proper and seemingly exhaustive research. A literature review of the particular issues associated with any business trend or transition can serve any business owner no matter how small their scope. Though it is important to understand the local and regional aspects of small business that can sometimes only be learned through owning a business in a particular region and practicing controlled trial and error, the larger concepts of business relocation and/or retail service practices also serve as a tool for better understandings of needs and practices.

In this particular case the owner of Ronnie's Place Convenience store will need to assess local and national information sources on issues particular to the transition that he/she is facing. Business relocation is not a simple prospect and the development of some idea of what has worked for other businesses and what has not worked can be of assistance to any entrepreneur.

The possible confusion and pitfalls of negotiating a value and compensation package from the North Carolina Department of Transportation is something that requires more understanding and a more concrete idea of what to do and what not to do in the development of a transitional business plan, especially a plan that would be sufficient to obtain a government contract, essentially the form of a compensation package award. (Gambarotto, 1993, p. 34)

Fortunately, winning a government deal or contract is not as complicated as one may think. The government (especially in this type of economy) is actually an oasis of funds. Canadian government institutions spend over $90 billion annually in goods and services.(*)

Being successful really boils down to two ingredients:

1. Analyzing the thousands of federal and provincial agencies, corporations, colleges and universities, etc., and finding out which of these could benefit from your offerings. And then, 2. Ascertaining who makes the key decisions and how in these divisions. (Gambarotto, 1993, p. 34)

Though the process and outcome may be essentially the same the issues regarding the identification of agencies is not as important, as you already know who you are dealing with, namely the North Carolina Department of Transportation. Gambarotto may teach that the largest obstacle may be believing you can do it the process is complicated and may require both expert advice and expert intervention. In the case of the small business, the resources for obtaining this expert may be out of reach beyond local and regional business association assistance. The best solution to this problem may be becoming your own expert.

The results of a survey conducted by PlanWare show that the typical business plan has about 15

Pages, needs a few months to research and write, and requires about three drafts. General plans are more difficult to prepare than usually anticipated, especially the financial projections and market analyses. Only limited use is made of an external advisor, and most plans are viewed as critically important and frequently used to help raise venture capital. Much more time is spent researching plans than writing them. Two types of plans were identified: Basic plans, less than 10 pages long, are widely used for internal purposes or to assess the viability of a business, and comprehensive plans are mainly used to raise venture capital or bank loans. Business planners should consider the following lessons drawn from the survey:

1. Decide the underlying purpose of the plan to get an idea of the length of the plan, the amount of research required, and the overall timescale.

2. Compile a detailed table of contents first. Use this to identify critical issues requiring research and/or assistance.

3. Plan a work program and timetable, which allows adequate time for researching, rewriting, and redrafting. The more important the plan, the longer it will be and the longer it will take to complete.

4. Recognize the process could be more difficult than expected. Consider seeking outside help at the beginning of the process, especially for the most vital areas of the plan.

The survey findings were based on 450 respondents who had written business plans. Full details and analyses are available in a white paper entitled Insights into Business Planning and can be viewed at the Website www.planware.org/insights.htm.(PlanWare Survey, 2002, p. 9-10)

With the challenging climate of the post 9/11 economy the prospect of business relocation can hold formative pitfalls for any entrepreneur. In regards to small businesses and more specifically retail small businesses there are both benefits...

(Small Business Survival Committee, 2002, p.12) In any small business the benefits of size during a transition is that the location is focused and often contains much less inventory and a smaller employee base.
Whether you are looking for a site for a new business or relocating an existing one, choosing the right location is likely to play an important role in the success of your business. The Society of Louisiana CPAs recommends that you address the following questions. Does my business require public visibility? Any business that relies on impulse buying needs visibility. A visible location is less important for businesses that provide services at other Locations, such as lawn maintenance or on-site computer repair. Manufacturers have different location concerns -- they typically need proximity to suppliers, modes of shipping and employee pools. (Greater Baton Rouge Business Report, 2001, p. A18) major drawback for any retail small business, in regards to relocation is that the generation of sales occurs only when the retail space is open for business. There are several important factors in the literature on the subject of small business transitions. Some issues are relative to business moves in general and there are a few specific issues regarding convenience store relocation that demand address by a proprietor before the adventure can be undertaken. (Bertagnoli, 2003, p.SB4)

It costs thousands of dollars to move, set up a new space and advertise the change to customers.

Indeed, business owners underestimate the cost of moving by 10% to 29%, usually by not anticipating the cost of moving phone, fax and data line, according to Ramond Silverstein, a small business consultant and president of the Chicago-based PRO-President's Resource Organization Inc., a network group for small business owners. (Bertagnoli, 2003, p.SB4)

In the particular case of the Four Oaks, NC convenience store, Ronnie's Place the relocation is unavoidable, due to the new diamond interchange NCDOT has slated for construction. The impact of the changed location from Main St. To Keen Rd. At the zero hour could possibly negate the improvements and expansions the owner has undertaken in the last few years, yet it could also give the business the opportunity to expand to a larger degree than could have been funded without the fair market compensation package offered by the NCDOT. Additionally the improvements that have been made may not have realized their full potential as of yet but they will surely increase the fair market price the business might command from the NCDOT.

Though the present owner does have some obtainable capital to undertake this transition the negotiation for the compensation package will be crucial to the success of the plan. Integral to the negotiations of an equitable settlement is the forethought of the entrepreneur on budget issues including present and future operating costs, loss of revenue during the transition, cost for architectural and planning services, moving services, environmental impact costs, employee impact, city and county permits, and last but not least the possible cost of legal services to precipitate contract negotiations.

Another possible consideration may be that the owner can take advantage of drastically reduced interest rates on economic stimulating small business loans. Deep interest rate cuts. The Federal Reserve cut short-term interest rates from 6.5% to 1.75% in 2001, whopping reduction. While access to credit is still a big issue for small businesses, lower rates should have a positive impact. (Small Business Survival Committee, 2002, p. 12)

The current economic climate for convenience stores regionally is challenged. In October 2002 a large retail convenience store chain Swifty Serve filed chapter 11 bankruptcy and then within days dissolved the organization completely, "Swifty Serve will close all 450 of its remaining gas and convenience stores in 12 states." (Degross, 2002) Other smaller corporations, such as Ronnie's Place might benefit from the overflow of former Swifty Serve stores, which operate under several names and currently have stores across the whole region. "The Retailing trade sector lost 16,000 jobs in September, 2002" (Degross, 2002). Though the dissolution of the larger retailer Swifty Serve was as a result of over stressed resources in a challenging economy (Degross, 2002) the impact of the retail slump will be felt across the board. It is for these reasons and others that careful attention must be paid to the planning, cost and resources needed for a business relocation.

Both large and small fuel retailers were affected by the new federal regulations regarding underground fuel storage tanks, which went into effect in 1998. (Everly, 1998, p.OKRB983560D4) The Environmental Protection Agency established a set…

Sources used in this document:
References

Bertagnoli, L. (2003, Jan.13) Relocation can be risky; Stores on the move must calculate costs, retain clients. Crain's Chicago Business.

Degross, R. (2002, Oct. 5) North Carolina-based convenience store chain to close remaining 450 outlets. Knight Ridder/Tribune Business News.

Delaurier, G.F. (2001, Sept.) Dying to serve you. Dollars & Sense.

Estey, R.B. (1982, Nov.-Dec.) Putting the people who come "after," "before" the decision to relocate facilities. Industrial Development.
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