Determining Sales Potential

In a retail business, your sales potential depends on location. Like a tree, a store has to draw nourishment from the area around it. To work through the problem of selecting a profitable location, answer the following questions. In what part of the city or town will you locate? In the downtown business section? In the area right next to the downtown business section? In a residential section? On the highway outside of town? In the suburbs? In a suburban shopping center?

 

  On a worksheet, write where you plan to locate and give the reasons why you chose that particular location. The local chamber of commerce may have census data for your area.  Census Traces on Population, published by the U.S. Census Bureau, may be useful.  Other sources on marketing statistics are trade associations and directories.

 

Now consider these questions that will help you narrow down a site in your location area.^* What is the competition in the area you have picked? How many of the stores look prosperous? How many look as though they are barely getting by? How many similar stores went out of business in this area last year? What price line does the competition carry? Which store or stores in the area will be your biggest competitors?

 

Again, write down the reasons for your opinions. Also write out an analysis of the area's economic base and give the reasons for your opinion. Is the area in which you plan to locate supported by a strong economic base? For example, are nearby industries working full time? Only part time? Did any industries go out of business or move from the area in the past several months? Are new industries scheduled to open in the next several months?

 

When you find a building that seems to be what you need, answer the following questions. Is the neighborhood becoming run down? Is the neighborhood new and growing? Are any super highways or throughways planned for the neighborhood? Is street traffic fairly heavy all day? Do pedestrians look like prospective customers? How close is the building to bus lines and other transportation? Are there adequate parking spaces convenient to your store?