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Reasons & Sources for Business Data Collection

Guest post by: Roland Petrov

Article Overview: If you want to set up a small retail business you will need to do some research first to find some key data to make sure your idea is feasible. Find out what kind of data you need to gather and where you can get it.

Reasons & Sources for Business Data Collection

When starting a small retail business you will need to collect some data for the following reasons: 1) To know who your customers will be and how many of them there potentially are.

2) To know where and how to advertise.

3) To decide which days are least profitable and therefore the best for being closed.

The two types of data you'll need for the above reasons are demographic data, namely who lives in the surrounding area, and financial data, namely daily income. The demographic data can be accessed prior to starting the business, so you know what you're up against in advance, but the financial data will be collected by you once businesses has commenced.

When I was planning to set up my tea store in Coupeville, WA, the best source for demographic data was my County Economic Development Council. If you don't have one of these where you live, go straight to the source: the State Office of Financial Management.

What you want to know is the surrounding population by sex, age, race, household income, education, employment sectors, and average consumer expenditures, as well as how many tourists and visitors to expect. These will give you an idea of what to sell and how to advertise.

For example, if you want to sell computers and the population in your area is weighted heavily towards being aged and uneducated, you may want to change your mind. Or if you notice from the consumer expenditures list that the average household in your area spends less on computers than they do on magazines, for example, there's another red flag. Also, if you want to reach young people, you wouldn't advertise in an area where senior mobile home parks dominate.

Prior to commencing operations, you won't necessarily know which days are the least profitable; however, you can canvass your business neighbors and see what they do. For example, I found that most of the shops on my street close on Monday and Tuesday or Tuesday and Wednesday. I figured that midweek would be slow and weekends would be busy. One of my neighbors is closed on Sundays, but it didn't matter how many customers he missed because for him Sunday is the Lord's Day. Since he's still in business, he obviously makes adjustments elsewhere.

Sometimes data may be inconclusive. I have kept daily income data for my Coupeville tea store now for over half a year and I still haven't figured out what day to close. On average, weekdays are indeed slower than weekends; however, my data collection shows that none of the five weekdays is significantly slower that any of the others - when it comes to buying tea, Coupeville residents are pretty regular!

New businesses like mine may just have to be always open until it becomes apparent that the business will succeed and can afford to be closed for a day or more per week.

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Article Tags: business data, business research, data collection, key data, retail business
Referred by: http://grasp-the-nettle.com/



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