Research: Demographics and Location

In my last post, I wrote about my experience researching competition for my proposed taphouse.  I did the research at the behest of my advisers at the Small Business Assistance Center and they didn’t steer me wrong.  In the process, I learned a great deal about my customers and what my competition is doing to attract them.

Next, I wanted to learn more about where I should locate the taphouse.  Until recently, my plan was to find something in downtown Auburn, but I decided that as long as I’m starting over from scratch I should also open myself to the idea of doing business elsewhere.  What do they say about what makes a business successful?  Location, location, location?  Well, that may not truly be what they say, but the sentiment is spot-on.  An otherwise great business in a poor location may never reach its potential.

To start, I looked at a few basic statistics for a number of zip codes immediately around my own.  I used a free tool provided by Nielsen, the same company responsible for TV viewership ratings.  Enter the zip code for the area of interest and you get a quick snapshot of demographic data.

Neilsen Data for 98092

More data!

I chose to examine a few specific details:

  • Population, which gives me an idea of how many potential customers live in the target area.
  • Median income, which gives me an idea of how much discretionary income these potential customers might have to work with.
  • Per-household spending, which gives me a good idea of how much money these potential customers tend to spend.

I selected the following markets:

  • 98001 (Auburn)
  • 98002 (Auburn)
  • 98092 (Auburn)
  • 98010 (Black Diamond)
  • 98038 (Maple Valley)
  • 98042 (Maple Valley)
  • 98027 (Issaquah)
  • 98029 (Issaquah)

I chose these markets for the following reasons: 1) They are close to my home, 2) They are areas I expect to have income and spending levels that will support a luxury business, and 3) They are areas I think have market space for a taphouse.  Arguably, I’ve left off a few good potential zip codes and a couple of good data points.  The good news is I can easily do this analysis again with any other zip code or data point.

Nielsen demographics by zip code XLS

Numbers and colors. This must be important.

As I did with my competition research, I created a spreadsheet to help me track and compare the data.  Using colors, I grouped the results into “neighborhoods” that make up a common market.  There’s one color each for Auburn, Maple Valley/Black Diamond, and Issaquah.

Looking at these numbers, the Issaquah and Maple Valley markets stand out as having the best overall demographics: Issaquah has the highest per-household spending and median income, and Maple Valley has the highest population but only slightly lower per-household spending.  Auburn, unfortunately for me as a hometown supporter, doesn’t pan out as well for a luxury market–there are more people, but significantly lower income and spending.

In my next post, I’ll discuss another online tool, SimplyMap, that helps me understand my demographics in different detail.

2 thoughts on “Research: Demographics and Location

  1. Pingback: Research: The Competition | madera verde

  2. Pingback: Research: Demographics and Location, Part 2 | madera verde

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s