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Trading Area Analysis
ANALYSIS OF THE BUSINESS SITUATION
SELECT YOUR SITE
• Trade Area
• the area from which you expect to attract customers
• Broad area…You will narrow your location down to city, then district, and finally building
• Trade Area Example: Dane County
WHAT TYPES OF THINGS SHOULD YOU LOOK AT WHEN PICKING YOUR TRADE AREA?
FACTORS IN SITE SELECTION
• Geographic:
• What is the terrain of your trade area?
• Are there any environmental concerns?
• Example: government protected wetlands.
• Any other geographical concerns?
• Example: Mackinac Island is the truly "all natural" theme park of America. Limited to transportation of horse and buggy, bicycle or foot, surrounded by water, it has escaped the vast changes of time.
FACTORS IN SITE SELECTION
• Demographic
• What is the make-up of the people that live in your trade area? Look at:
• General age• Education• Gender
• Race• Religion• Income
US Census is a great resource
FACTORS IN SITE SELECTION
• Demographic, Continued
• Analyze the statistics; is there a local labor pool for you to tap into?
• Local workforce agencies can provide information on skill levels and training needed by the unemployed in your trade area
FACTORS IN SITE SELECTION
• Economic
• What is the general economic condition of the trade area?
• Consider:
• Income Levels• Poverty• Standard of Living
• Employment Levels• Major Business/industries• Community Wide Events
OTHER THINGS TO IDENTIFY IN YOUR TRADE AREA
• Identify the location of
• Competitors
• How far does your target market have to travel?
• Stores that would attract a similar customer base but that would not compete directly with you
• Help you determine specific location
THE GOAL OF TRADE AREA ANALYSIS
• To find the right city to locate your business.
• When gathering data for a trade area, also gather data for cities within your trade area.
• Include data and analysis in business plan.