How to Find Out the Population Base of an Area
How to do Market Research for a New Restaurant
When you are getting ready to open a new restaurant, it's important to do some market research first. Understanding who your potential customers are and where they live will help you to tailor your restaurant concept accordingly. Finding the population base of an area is important for a new restaurant because it can tell you the income range of a potential restaurant location. Will there be enough people, with enough expendable income, to spend money at your new restaurant?
Why Finding the Population Base is Important
If you are opening up a restaurant in your hometown or local neighborhood, you may assume that you know enough about that particular location, without doing any research. This can be a costly mistake. Really digging into the numbers in your area - housing value, average household income, average age - and contrasting it with the number of competing restaurants, will help you determine the best type of restaurant to open. For example, if the average age is 27, your concept would do well to tailor to the Millennial restaurant customer rather than a baby boomer.
How Much Does a Site Survey Cost?
There are a couple ways to figure out the population base of an area. One is to do a site survey. Big chains and corporations routinely conduct some type of site survey before they begin building. Because a site survey can cost as much as $25,000 or more, it usually is not an option for a person starting an independent restaurant.
Where to Look for Information
If you don’t have several thousand dollars sitting idle in your bank account for a site survey, don’t despair! There are several ways to figure out the population of a particular area, and most of the information is free. Take advantage of local government reports, speak with a representative from the Small Business Administration (SBA), or visit the nearest economic growth council for information on local employment and population data.
- Population Census- Every ten years the US government publishes a population census. A census not only tells you exactly how many people live in a certain area, it gives you a median age and household income. These factors can influence your menu and restaurant style, as well as location. For example, if the median household income of an area is $40,000, it is a good idea to keep the menu prices on the inexpensive side. If the median household income is $200,000 a year, then you can offer a slightly more upscale menu.
- Housing Value- Find out how much local houses are appraised at. If houses are going cheap, that is an indicator that incomes are lower. If every house in the area is selling for $500,000 or more then it is a good indication that incomes are high and people have extra money to dine out.
- Nearby Institutions and Attractions- Are there any big businesses or attractions that will bring lots of people into the area? For example, a sports stadium or major medical facility will attract hundreds, even thousands of visitors from outside the local area.
- Unemployment Rate- You can find unemployment rates for towns, counties, and states through local government websites. Currently, the US unemployment rate is 4%. If an area is higher than this figure, you may want to think twice about locating your restaurant there.