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Hub You - Site Location - Defining Your Trade Area, Choosing the Right Location for Success
Automation is essential for expanding and accelerating service in many industries. But when individual care or attention is required, customers need contact with real people. When human energy flows and connects, good things (can) get done.Try this experiment:Call the main number of four companies and state, ‘I am calling with a question about your product’. Then ask a few basic questions and rate the quality of service you receive.Now call four different companies and ask for help again. But this time, make a ‘personal connection’ first.Start by saying, ‘Hello, I am calling about one of your products. I am hoping you can help me.’ (Pause and wait for a reply.) ‘You can help? Oh, that’s great. Thank you very much. I really appreciate it. My name is (give your full name). Who am I speaking with, please?’Once again, rate the quality of service you receive. I’ll bet the service you get from the second group of calls is friendlier, more thorough and upliftin
Determine how far people will walk/drive to come to your location. “Ring studies” are called that because the mapping person puts circles around around the location and calculates the number of customers and prospects that e
When you’re getting ready to own and operate your own franchise business, it’s important to understand what will make you successful. As with any business, hard work and diligence are respectable qualities that can lead you to success in the long-term. Franchisees in particular have a set of qualities that sets them apart from the average business person. This includes strong communication skills, the ability to think independently, negotiation skills, determination and perseverance to overcome obstacles, and the ability to work within the franchise system. Franchise business models are developed for efficiency and consistency; successful franchisees make the system work for them in the long-term.Franchisers look for strong candidates who are willing and able to make the franchise business model work. They look for entrepreneurial spirits who can employ the tried-and-true business systems and concepts of the company. Successful franchisees are adept at people management, proj
Site location is part art and part science. One needs to understand the current business landscape, the demographics of the area, the traffic patterns and as much as possible about future plans for development. And, a little bit of basic math helps, too!
Basic concept: Primary Trade Area
The primary trade area is actually exactly what one might guess it to be. It is the main area that most of your customers are coming from. Depending upon the frequency of your sales cycle and the uniqueness of your products and services in the market, you make some assumptions about how far your prospects are willing to go to get to your location.
For convenience locations such as grocery stores, gas stations, coffee shops and banks, people generally don’t travel too far (relatively speaking) from their point of origin. The opposite is true for destination locations, such as specialty restaurants, theme parks, specialty clothing stores, et al. Distance willing to travel is actually a function of availability of goods and services and population density.
Translated into practical terms, a person in an office in Manhattan is more likely to get cash from the nearest ATM (within a block or two) where as a homeowner on an Iowa farm may have to travel 10 miles to get to the closest bank branch in town.
How do you determine your Primary Trade Area?
You could take a map out of your car, stick it on the wall, and throw darts, OR, you could spend a little time with a mapping package and do some neat calculations.
If your business isn’t very dynamic, you don’t need to reassess your trade area more than once a year. If you are growing, it makes sense to make mapping out your customers relative to the prospective pool of prospects a company metric.
There are lots of advanced calculations that take into consideration the competition, traffic patterns, store attractiveness and prospect population, but if you don’t have much time or competitor data, the best way to get a handle on your customers is to plot them out on a map and see where they live. Then, depending upon whether your consider yourself to be a convenience location or a destination location, you determine where the closest 50 – 80% of your customers live (or work). Use 50% if you are more of a convenience location and go out anywhere from 65-90% to determine your primary drawing area for destination locations.
Determine how far people will walk/drive to come to your location. “Ring studies” are called that because the mapping person puts circles around around the location and calculates the number of customers and prospects that ex
Have you ever called a major corporation’s 800 number only to be trapped in a maze of automated questions that have to be answered all over again if you ever actually reach a real person? Of course you have and you didn’t like it at all. However, as much as you don’t like that experience, corporations know that you like listening to hold music even less.Studies indicate that customers who are on hold listening to music have a distorted perception of time that makes them believe they are waiting longer than they actually are. The longer a customer believes they are on hold, the more agitated they become when the representative finally answers the phone. To change this perception companies give callers “busy” work to keep them occupied to reduce the perceived amount of elapsed time. They do not want the caller to notice that they do not keep a compliment of representatives large enough to cut down the hold time to something most callers would consider reasonable. It’s not an ac
Basic concept: Primary Trade Area
The primary trade area is actually exactly what one might guess it to be. It is the main area that most of your customers are coming from. Depending upon the frequency of your sales cycle and the uniqueness of your products and services in the market, you make some assumptions about how far your prospects are willing to go to get to your location.
For convenience locations such as grocery stores, gas stations, coffee shops and banks, people generally don’t travel too far (relatively speaking) from their point of origin. The opposite is true for destination locations, such as specialty restaurants, theme parks, specialty clothing stores, et al. Distance willing to travel is actually a function of availability of goods and services and population density.
Translated into practical terms, a person in an office in Manhattan is more likely to get cash from the nearest ATM (within a block or two) where as a homeowner on an Iowa farm may have to travel 10 miles to get to the closest bank branch in town.
How do you determine your Primary Trade Area?
You could take a map out of your car, stick it on the wall, and throw darts, OR, you could spend a little time with a mapping package and do some neat calculations.
If your business isn’t very dynamic, you don’t need to reassess your trade area more than once a year. If you are growing, it makes sense to make mapping out your customers relative to the prospective pool of prospects a company metric.
There are lots of advanced calculations that take into consideration the competition, traffic patterns, store attractiveness and prospect population, but if you don’t have much time or competitor data, the best way to get a handle on your customers is to plot them out on a map and see where they live. Then, depending upon whether your consider yourself to be a convenience location or a destination location, you determine where the closest 50 – 80% of your customers live (or work). Use 50% if you are more of a convenience location and go out anywhere from 65-90% to determine your primary drawing area for destination locations.
Determine how far people will walk/drive to come to your location. “Ring studies” are called that because the mapping person puts circles around around the location and calculates the number of customers and prospects that e
Every year about this time, I see too many accounting systems that don’t work… QuickBooks and PeachTree and Microsoft Small Business Accounting programs that don’t do what their small business users want or need.Sometimes, people know their accounting systems don’t work. And they don’t care. But, sadly, sometimes, the struggling small business person doesn’t even know his or her system isn’t working until it’s too late. Until the business fails because the owners don’t realize they aren’t making money.Fortunately, perhaps surprisingly, you can usually tell pretty quickly whether an accounting system like QuickBooks, Peachtree Accounting, or Microsoft Small Business Accounting works the way it should. Just look for one or more of the following four symptoms.Symptom #1: You Don’t Know How Much Cash You Have Right NowAny accounting system, run right, tells you how much money you have in your bank accounts. To the penny. Accordingly, if you can’t look at a b
Translated into practical terms, a person in an office in Manhattan is more likely to get cash from the nearest ATM (within a block or two) where as a homeowner on an Iowa farm may have to travel 10 miles to get to the closest bank branch in town.
How do you determine your Primary Trade Area?
You could take a map out of your car, stick it on the wall, and throw darts, OR, you could spend a little time with a mapping package and do some neat calculations.
If your business isn’t very dynamic, you don’t need to reassess your trade area more than once a year. If you are growing, it makes sense to make mapping out your customers relative to the prospective pool of prospects a company metric.
There are lots of advanced calculations that take into consideration the competition, traffic patterns, store attractiveness and prospect population, but if you don’t have much time or competitor data, the best way to get a handle on your customers is to plot them out on a map and see where they live. Then, depending upon whether your consider yourself to be a convenience location or a destination location, you determine where the closest 50 – 80% of your customers live (or work). Use 50% if you are more of a convenience location and go out anywhere from 65-90% to determine your primary drawing area for destination locations.
Determine how far people will walk/drive to come to your location. “Ring studies” are called that because the mapping person puts circles around around the location and calculates the number of customers and prospects that e
The Franchise RelationshipIn theory, the franchise relationship is a symbiotic relationship, such as a marriage, or a partnership. However, as often happens, there is a significant gap between theory and practice. What should be well understood is that the goal of the franchisor is the same as any other business entity: maximize profits. Moreover, we live in an era of immediate gratification; therefore, in many business entities long-term planning is limited to managing earnings per share (EPS) for the current reporting period. Thus, many franchisors will maximize profits in the short-term whether of not this has a deleterious effect on the franchisee. I owned and operated a ‘family restaurant’ franchise; therefore, this discussion will tend to focus on this type of franchise.Clearly, the franchise relationship mimics a marriage in that there is a strong tendency for disputes to become more frequent and bitter as the business relationship evolves from the honeymo
If your business isn’t very dynamic, you don’t need to reassess your trade area more than once a year. If you are growing, it makes sense to make mapping out your customers relative to the prospective pool of prospects a company metric.
There are lots of advanced calculations that take into consideration the competition, traffic patterns, store attractiveness and prospect population, but if you don’t have much time or competitor data, the best way to get a handle on your customers is to plot them out on a map and see where they live. Then, depending upon whether your consider yourself to be a convenience location or a destination location, you determine where the closest 50 – 80% of your customers live (or work). Use 50% if you are more of a convenience location and go out anywhere from 65-90% to determine your primary drawing area for destination locations.
Determine how far people will walk/drive to come to your location. “Ring studies” are called that because the mapping person puts circles around around the location and calculates the number of customers and prospects that e
One of the most powerful business marketing tools out there is on paper. These include pamphlets, portfolios, and business cards. Using all of them is a plus, but business cards remain the cheapest (and arguably most important) way to market your business. Launching a business requires money from the start, and many may seek to cut corners and save whenever appropriate without sacrificing the integrity of their business. Plus, with inevitable changes to contact information and design for business cards, it is important to save money. One site that offers free business cards is VistaPrint, a company that offers 250 free (has an $85 value)Business competition can be tough. Adding your name and contact info only on business cards won’t help too much. Instead, business cards should reveal a lot more, like specializations and a website detailing your service. Although VistaPrint prints their cards on heavy paper stock and comes with a selection of designs, they insist on adding their lo
Determine how far people will walk/drive to come to your location. “Ring studies” are called that because the mapping person puts circles around around the location and calculates the number of customers and prospects that exist within each mileage band. Another way to look at your customers is to ask for a drive time isochrone….that is, a unique polygon shape that follows the road network that shows you how many minutes most customers need to drive to get to your location. (Picture a city with 5 major roadways convening at the city center. A drive time isochrone might look like a star shape because people driving fast on the major roadways can get in faster than those in the more congested (and lower speed limit) side streets.
Convenience locations are generally 5 minutes or less in the dense suburbs, and can be up to 20 or more out in the more rural areas. There are more detailed ways to calculate trade areas – but if you’re looking for something quick that most people understand and won’t question you’ll get the basics straight so that you can say something like:
“70% of our customers come from within 7 miles of the store, that’s about a 15 minute drive time.”
Now what?
If you have one location, then when you are expanding you know that you have been successful with this particular location and can at least use your current assumptions to review the proposed site. If you have several locations, then classify your stores first by type, profitability, size, or other metrics, then lay out the distance and drive time data in a spreadsheet. You’re starting to build some intelligence!
Next step, buy data.
Census data is great, but it is dated. Populations are constantly changing in relation to the economy of an area. If you are serious about understanding and growing your business, don’t rely on free or cheap estimates. Spend a few hundred dollars and get what you need so that you can confidently approach the bank (or your spouse, boss, investor etc.) with information you can hang your hat on.
Here’s what I usually recommend for a good understanding of the potential for a site: Each report is about $50 depending on where you buy it from, and most of the time it is packaged so you can expect to pay between $250 - $500 for a series of site reports that you can use over and over to assess or market a property.
1. Census counts, current year estimates and five year projections for current population and current households. Include population described by segments such as Education, Home Value, Occupations, Race, Language spoken
2. Income
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