Whys
And How Of
A Demographic Study
By Lloyd M. Gordon, President
GEC Consultants, Inc.
Skokie, IL 60076
When your banker or investor group request a Business Plan from you
for a new business enterprise you are planning, you usually have
a good idea of what they want. You assume they want a complete information
package that includes what, where, when, why and how (meaning how
you are going to repay the loan). You will of course be expected to
include marketing information. Incorporated in this marketing study
will be demographic information. Among restaurateurs and other Foodservice
Industry executives there is often apprehension and uncertainty as
to what information is expected and what will be the cost to acquire
it.
Following is an outline of the range of information required
to be included in a demographic study.
Site Study
- Over all acceptability
- Study of the sources of sales activity
- Compatibility of your concept to the market area
- What potential customers want (see 5 key questions p. 13)
- A transportation study
- An environmental impact study
- Feasibility of the projecy at this location
- Budget projections (7 requisites for good FS p.16)
- Site investigation
- Competition (see p. 14)
- Size and nature of the market
- Positive market factors
- Practical features (steps to take see A and B p. 17)
- Licenses, city, state and other.
- Size of facility
- Cost of the project
- Location relative to population centers
- Traffic patterns
- Parking availability
- Legal and zoning problems
- Extent of site construction work required
- Leveling
- Paving
- Utilities accessibility
- Landscaping
- Labor accessibility
- Construction cost estimate
- Review of all alternatives
- Evaluating and measuring all alternatives
- Assessing risk
- Test for location feasibility (4 rules)
- Environmental impact assessments
- EPA requirements
- Soil tests
- Natural acreage
- Wetlands
- Wild life
There are three levels of Demographic Studies that may be utilized
for foodservice projects. They vary in price depending on the complexity
of the research required for each. The most expensive is a study that
includes all of the factors mentioned above and requires original research
to validate the facts presented. This study may cost from $20,000 to
$50,000.
The middle ground is covered by a study that includes some selective
data on all factors mentioned above and provides some original research
but mostly data available in public domain. This information is selected
by its relevance to the project. This study may cost from $15,000 to
$25,000.
The least expensive study is one that uses proprietary data incorporated
together with information gathered from the public domain to meet most
of the factors mentioned above.. This study may cost from $5,000 to
$15,000 depending on the size, extent and complexity of the project.
Mr. Lloyd M. Gordon, President of GEC Consultants, Inc. has an
MBA from the University of Chicago. He has concepted more than 375
restaurants and has been consulting for over 44 years. He helps people
enter the restaurant industry, points the way to profitability, and
helps keep them successful. To discuss "demographic studies' he
can be reached at 847-674-6310.
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