Looking to open a business location? In this online age of Amazon and digital media, there has never been so much information available to go alongside the increased competition from online suppliers. It has never been more important to do your research before opening a brick and mortar store.
But before I continue, what percentage of retail sales do you think Canadian businesses sold online last year? 30, 40, 50 per cent? If you include groceries and car sales, it’s 2.7%. If you take out groceries and car sales, it increases to 5.4%. So, a whole lot of sales, $275 billion, are made in person (excluding cars and groceries) by brick and mortar stores.
Step 1: Know Your Target Market
Business to Consumers
One of the most important pieces of information that an entrepreneur needs to know is “Who is their target market?” Not those 15 – 65 years of age, not moms with newborns, not entrepreneurs, but 25-34 year old’s who are electronic gamers, moms with newborns who want to stay active, entrepreneurs who are ready to sell their business. Details, details, details are critical for small business these days in our ever-increasing world of specialization.
To give a specific example, imagine you want to open a dance studio that caters to Chinese child dancers. You would need to know which neighbourhoods have the largest populations of Chinese children, what their average household income is for spending, and maybe what their occupations are.
If my target market are males between the ages of 15 and 34 who not only spend a lot of money on video games, but that amount of money is increasing, then I need to identify where these males are living so I can market to them, attend events in their neighborhood to spread the word about my new game, advertise on business websites in the neighbourhood about my new game, and get feedback about their preferences for the video games they like.
Business to Business
Imagine your target market is other businesses. You will need to know the type of business that will most likely buy from you. Size of business may be important, age of business, and gender of owner. Next you need to know which business communities have this type of business and which ones have increasing numbers of these businesses. You need to have contact information and to track potential clients so you will have something to talk about when the first contact is made.
Step 2: Sources and Reliability of Information
Where are you going to get this information? Relying on anecdotal evidence or hunches isn’t enough. You want a source that is extensive in its methods to provide the most accurate and reliable information you can get. After all, this is your livelihood you are putting on the line. You want a source that goes deeper than the surface and provides the actual trends that are occurring, not someone’s opinion. Statistics Canada is the first place to start. They conduct a census every five years and get statistics on the size of families, household income, occupation, education, how often they move, ethnicity, and language spoken at home. So valuable is the information provided in the census, Statistics Canada was voted best statistical agency three years in a row by the Economist Magazine.
Another source of information that is helpful for locating your business is the number of businesses by type of business coming from the City of Vancouver’s Business License Department. Every business in the City is required to apply for a business license and provide the name of the business, the type of business, and how many employees it has when it originally applies for the license.
Other sources of information include BC Stats and Reference Canada. BC Stats is the provincial equivalent of Statistics Canada and has a high standard for statistical accuracy while Reference Canada is a private business directory firm that tries survey all Canadian businesses once a year.
Step 3: Finding Your Customers
Business to Consumers
It’s rare that something like Bizmap comes along to make locating a small business easier for the entrepreneur. Bizmap has important information about the demand characteristics of 16 neighbourhoods in the City of Vancouver and the changing nature of its business communities. If an entrepreneur wants to find out which neighbourhoods have large populations of people 50 years and older, they can compare ‘Age of Population’ across some potential business communities to see which ones are the best for their products or service. If you have a particular age group you want to target, pick the age then compare communities to see which one will be the best to do some further research.
BC Stats is also a place you want to visit for age projections by five-year age groups, male/female, and city or local health area. Local health areas are cities for more dense metropolitan areas and encompass more than a city as densities lessen.
Business to Business
Bizmap can help you identify business communities that are growing for the type of business you want to target. Many sources can’t identify what the trend is. Bizmap can. Bizmap identifies the industries that are growing such as Retail, Health Care, Accommodation and Food and the types of businesses within these categories; food retailer, massage therapist, liquor licensed restaurants and limited or fast food service restaurants.
Bizmap can also provide the number of businesses by size of company according to the number of employees they have. So, if you are a bookkeeping business that is looking for small companies, Bizmap can tell you which communities have the biggest population of these companies. If you are a supplier of a wellness program, you are looking for larger companies that can afford this for their employees. Biizmap has this information.
This database will not be able to provide you the growth in businesses, but it will provide the number of businesses and the contact information that you need for a meaningful connection. You can use filters such as type of business, size of business, age of business, and gender of owner. It can be found through selected libraries or Small Business BC.
Making the Right Decision
Bizmap has other important characteristics such as access to transit for your potential customers, its ‘walkability” for pedestrian friendliness, events that attract customers from other neighbourhoods, and commercial vacancy information.
If you use Bizmap’s information in combination with other sources, including talking to potential customers, you will improve your chances of entrepreneurial success and reduce your chance of failure.