Learn how to do research on potential business locations so you know the ins and outs before you start negotiating a lease.
Doing research is part of both the business plan and market plan writing process, since the more information you have that isn't just something from off the top of your head, the more valid the plan will be, for your use and if you present it to any bankers or investors.
For these reasons, it is very important to get accurate information, and always a good idea to include the source where you obtained it to add credibility if you are using it in a business plan for outside funding.
There are many different statistics you can gather relating to the location of your business. The more you can find, the more complete and professional your plan will look. These are the numbers you should get, and where to find them:
What to get: the number of people who live in the area from where you draw your business. If you live in a smaller town, probably the whole town population is fine. If you live in a big city, then try to get the number just of the neighborhoods from which your customers will come- obviously if you live in Los Angeles, there won't be 8 million people stopping by your café!
Where to get it: Try online first, either the city chamber of commerce, local government website, or a general search with the town name and the word 'population' in the search field
What to get: This is information about what kinds of people live in your area. This includes such facts as income level breakdowns, ethic groupings, age group breakdowns, and other useful information that relates to who your customer base will be. If you want to open a fine dining style business, you can use demographics to see how many people there are with incomes over a certain amount who will be most likely to be your core customers.
Where to get it: US Census data has demographic information, usually the local government has such information as well, such as the chamber of commerce or a city government office.
3) Highway traffic:
What to get: The daily volume of traffic passing on the streets fronting your business location, and any nearby highway or other main arteries that will bring you your daily customers.
Where to get it: Try an online search for your local or state government- often they keep these records in their highway department and/or with police information. The local chamber of commerce may also ave the information- it is usually free or very low cost to obtain.
What to get: The average number of annual visitors to your area, who will most likely be eating out and can add to your bottom line, although they aren't going to become regulars, obviously.
Where to get it: The local chamber of commerce, visitor's center, tourism board, or other related agency should have a good estimate of this information, especially if you are located in a place that attracts a good number of vacation or convention business. Failing that, you might ask at some of the large hotels in town- they likely have done their own studies and would provide you with a number.
5) Seasonal population:
What to get: If your area has a seasonal population fluctuation- a summer beach season, a fishing season, etc. that brings in people from out of town, or if people leave for the winter or similar circumstances- try to estimate the populations of your area at the various times of the year when they are likely to go up or down. This will help greatly in being able to project your annual sales through the up and down cycles.
Where to get it: Same place as the tourist information.
What to get: The number of businesses operating in your area, and the number of workers who arrive each day. This is particularly important if your business is focused on serving business clientele rather than consumer purchasers.
Where to get it: The local chamber of commerce should be able to help with this one- as will a careful survey (by discretely dropping by at different times of the day) of area competitors to see what their store hours are (do they close on weekends- at night?) and what type of crowds they are attracting.
Once you have found a candidate, you have to consider the following issues. Ideally, you can bring along your restaurant adviser and your contractor who can help you evaluate things you might not know or would otherwise miss.
As you get the answers to these questions, be sure to speak with the owners of the other businesses in the area and find out as much as you can about the past tenant of the business location you are considering as well as a general read on the area and any news of changes or problems that are expected in the future and a read on how easy the landlord is to work with. The more info you have, the better a decision you can make.
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