I am doing my research into an area to open a new DelCo, and have been reading the numerous posts regarding populations vs. competition. I found rural cities with 1 DelCo for every 400 people, and it seems to defy logic that they can exist. And then I’ve found other areas with 10,000 people to 1 DelCo. But, here is my question:
I’m looking at a city (to be a little vague) in or near KY, TN or GA. I’ve found a region that I can draw a 6 mile diameter circle, and not hit a DelCo or any major land formation (rivers or mountains disturbing normal population distribution). At 8 mile diameter circle over the same location I hit 7 DelCo’s on the outside edges. These circles, according to demographicsguru.com have at 3 miles radius (6 miles diameter) 16,000 addresses (10% apartment and 10% business). At 4 miles radius (8 miles diameter) 28,457 addresses with the same mix. The average home value is $75,000 and the average income is $32,000.
If my plans were to create an average cost, average quality pizza with delivery and pickup (no dine-in), what issues can you draw from these demographics? Is the population too poor to support pizza? :shock: I would need to pull $27 a year from each of the 15,000 addresses. Is the house values such that delivery may not be safe at night? I have no good statistics on crime to pull from.
I’ve looked at older phone book listings, and can not find standard or franchised DelCos that were in this area. Could a population so despise pizza as to create this hole, and still be covered by the Constitution of the United States?
That sounds like a pretty depressed area. You can’t build homes for those numbers which means there is no new hoom construction or remodeling going on, both of which are indicators of poor economic health. If that is a household income number it is below the poverty level for a family of four.
The nationals are not stupid. If nobody has located there, look for the reason why before jumping.
All in all, I would prefer to have economicaly viable customers and deal with the competition.
as you may see, there is some trial and error involved, even after much research
and some places defy logic
as with any endeavor, once you start your project,
“work like it is all up to you and pray like it is all up to God”
What he said. BUT there can be a viable business set in a dense enough population at a slightly lower economic level. It will take more creativity and effort to solicit the upper 60% of that distribution curve of households. The demographics you gave are not all that uncommon in older towns in rural areas of these states. Well tended historic homes don’t value as high as new construction homes, so they tend to skew the statistics a little lower . . . . a little.
Keys for lower income areas will include: existence and strength of other commercial interests, ownership versus rental properties, turnover of rental properties, effectiveness of local government and their involvement in promoting local business creation, ad valorem tax structures, actual driving distances for all those deliveries!, physical road conditions, sewer water capacity available, distance to nearby public schools and colleges, active community groups. Specifically look to see if the area has any towns with an active “Better Home Town” or “Main Street” program . . . or a Downtown Development Authority. Check participation levels of towns and businesses in the Chamber of Commerce. These will all build a picture of what the real business atmosphere and potential is in the area. If you get a feeling this is a deaend area with no one doing anything to get out of the dumps, and little active and creative effort to build a commerce, then don’t waste the time and $$$. If this is the time they are surging and hitting a stride to bring in more businesses, and they have some existing, successful businesses already, then it could be a reasonable gamble. Gamble I say. I call it business prospecting.
These aren’t readily available on an internet service, and will require some leg work. Roads, taxes and sewer will give you some idea of the recent health of the community economies, and commitment/capacity to future commercial growth and stability. Small towns are more dependent on local government impact for market strength as well.
I suggest that deciding about that location will be an involved research project with some bigger picture analysis, and gut level guess work. Altogether, the simple, numbers-based decisions aren’t the only things to consider. You could hit the mother lode, or you could sink you life savings into a hole. This place sounds like a personality and relationship driven success over simple numbers crunching and door-hanging. You gotta have those last two in addition. I would predict a long term of owner-operator and hands-on managing to get to being out of the kitchen. Lots of networking, community investment projects, being on committees and in local and county government activities. It would be a very intensive lifestyle instead of a simple business.
i live in rural area while our housing cost our very resonable taxes are low it is a struggle to be out here would i trade it for big city with lots of competition and maybe more money in my pocket probally not its a lifestyle choice i moved from the west coast so i do have some insight i could not afford to do what ive done here out there. our area is low income one cust said it best while the rest of the country is strugling we just kind of stay the same so its not as noticeble people still got to eat. we just have to be more creative and have the best possible food,value, service to make it work. but where else in the states could you by a house over 20 acres barns outbuildings etc. and live in the most beautiful area mild weather good hunting fishing hiking etc for under 200,000 im sure theres places but this is where we chose.
Thank you for all of that information. I can certainly see now that the simple counts and populations in an area are not the only things to consider. Also, the comment regarding the location of franchises, or lack there of, was very thought provoking.