You've Got a Free Business
Consultant in the Census Bureau
from the Tucson Citizen, February 18, 2002
By Rhonda Abrams, Citizen Staff Writer
Ever wonder why there seem to be three or four fast-food joints at one intersection? Why all of a sudden, not one but three big office-supply stores open in a community? The answer is they all rely on similar statistics to pick locations. They look for certain factors: population density, characteristics of nearby residents such as age, gender, income, number and type of local businesses, and so on.
Big corporations hire consulting firms to compile these statistics. You've got an even bigger consulting group doing it for you, free. The U.S. government, particularly the Census Bureau, compiles all kinds of
information useful for businesses, and they've put much of it on the Internet.
First, a few key Web sites to remember:
- www.fedstats.gov - The main portal for finding government statistics. The government really has tried to make this accessible, but if you don't know what you're looking for, it may be difficult to find here.
- www.census.gov - The U.S. Census Bureau. Bookmark this. This gives you access to all Census data, about people, businesses, trade and much more.
- http://quickfacts.census.gov/qfd/index.html - Quick facts on a wide variety of information about population characteristics at the state or county level.
- www.census.gov/epcd/www/econ97.html - The "Economic Census" compiled every five years, with detailed information on business activity.
- www.census.gov/sdc/www - The Census Bureau's State Data Centers, with links to individual state statistics.
- http://tier2.census.gov/cbp_naics/index.html - Eureka! "county business patterns," the nitty-gritty about businesses in your own area, down to ZIP code level. If you want to know what's going on in your hometown, this is the place.
This all seems daunting because you'll have to click through many pages. But you can find amazing information. For instance, if I was thinking about opening a dry-cleaning business in a particular neighborhood in Phoenix, I might want to find out how many dry cleaners already existed there and how well they were doing. Here's what I'd do:
Start from the county business patterns page.
Put in the ZIP code, let's say 85013.
Look for the general industry classification, in this case, "other services," and click "details."
Scroll down to "drycleaning & laundry." I discover that in 1999, there were eight dry cleaners or Laundromats in that ZIP code, and I can see how many employees they had.
Click "compares" to see how that stacks up to other ZIP codes in Phoenix. Scrolling through, I notice that three other ZIP codes have more dry cleaners or coin-operated laundries, and one had the same number. That should give me pause. Perhaps the market for dry cleaners in that neighborhood is already saturated.
Playing around with data at this site, I can find other information that might be useful if I'm starting a business. For instance, I notice that while ZIP code 85013 had eight dry cleaners or coin-operated laundries, there were just four beauty salons.
That seems low. So if I go back and click on "details" of the three ZIP codes with more dry cleaners or coin-operated laundries, I see they had 16, 32 and 18 beauty salons. Maybe what ZIP code 85013 needs is another beauty salon.
Next, I'd want to find out about the people who live in that ZIP code. This data is more difficult to find all in one place.
One of the best places to start is to the State Data Centers, www.census.gov/sdc/www/. Clicking through, I see that according to the 2000 census, there were 20,842 people in ZIP code 85013, and the median age was 36 years. Searching the site further, I could find that in 1990, the median household income for that ZIP code was $27,493.
OK, so how does that compare to those ZIP codes with more dry cleaners? Not so well. They all had significantly higher median incomes in 1990. Once again, I might want to consider whether that neighborhood could really support another dry cleaner.
Of course, this is just a starting point. You've got to drive or walk around the neighborhood, look at the competition, talk to other merchants. You still have to use your good judgment. But if you're looking for hard numbers, the government's got them. McDonald's uses them, why not you?
To receive Rhonda Abrams' free business tips newsletter, register at www.RhondaOnline.com.
