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This work is licensed under a Creative Commons Attribution-No Derivative Works 3.0 United States License. Affiliate links may be used in our content, which means at no extra cost to you, making purchases through them helps support this site. This section provides techniques for estimating market demand and supply for selected retail and service business categories.
Once you have assembled sufficient background information on the trade area and characteristics of the market, you’re ready to focus on a detailed analysis of business opportunities by specific category. In this section we focus on those retail and service businesses that commonly have a storefronts in downtown and business districts.
To help you with the quantitative aspects of this process, this section provides various tools, ranging from simple to complex, that can be conducted for one or multiple business categories.
Demand: In market analysis, demand is the amount of a good or service required to fulfill the needs of customers in your area. Supply:  In market analysis, supply is the amount of a good or service currently distributed in the marketplace. The threshold analysis approach provides a measure of the number of businesses within a particular NAICS category that could be supported in a community based simply on its population. While thresholds greatly over simplify the analysis of market potential, they are straightforward and easy-to-understand measures of demand.
A modified and more precise application of threshold analysis can be used to measure the potential over or under supply of businesses in downtown districts.
This method for determining market potential estimates total demand for retail and services businesses in a trade area based on historic customer spending patterns. Market potential improves upon threshold demand estimates by incorporating local income, and calculations are based on trade area or regional population rather than a city’s population alone. Examining local demand in terms of numbers and dollars is only part of the analysis.  There are also a number of important qualitative considerations to help you gauge the depth of trade area demand and your downtown’s ability to capture it. Findings from business owner surveys, consumer surveys, and focus group sessions that include questions about non-local market segments can provide valuable insight regarding non-local demand.
In a market analysis, supply is the amount of a good or service available in the marketplace. There are a two ways to build your inventory of current supply—through secondary data and through a locally generated database.
The simplest method for building your inventory is to purchase a list of businesses from a national data provider.
Step 3 reconciles information gathered in the first two steps in an effort to identify realistic business expansion and recruitment opportunities. Realistic expectations are important so that business development initiatives lead to achievable outcomes. Use one or more of the quantitative tools presented later in this section to help you calculate and record demand and supply. Record non-local consumer research findings that describe consumers who may shop in your community, but permanently reside elsewhere. Your recommendations should highlight business categories that promote a vibrant mix in the district, complement existing businesses, and offer reasonable evidence that an expanded or recruited business will have opportunity for success. While thresholds oversimplify the analysis of market potential, they are straightforward and easy-to-understand measures of demand. The industry codes used to identify retailers and service providers only reflect the primary source of business sales and do not take into consideration any secondary product lines.
You can conduct retail and service business mix analysis by comparing your downtown with either the Wisconsin data, or alternatively, selected downtowns.
A modified and more precise application of threshold analysis can be used to measure your community’s potential over- or undersupply of businesses in downtown districts. Note: While Wisconsin data may be useful elsewhere, similar thresholds can be calculated specifically for other states. You can use the Worksheet for Analyzing Your Downtown to summarize the number of businesses by retail or service category, for your downtown and the corresponding average for comparison cities and villages. As an alternative to the Wisconsin business mix data, you can compare your downtown to a selected sample of economically vibrant peer downtowns. Selecting communities for comparison requires choosing places that are similar in selected aspects. Distance from major metropolitan areas: Communities that are closer to metro areas may have different retail mixes than those at greater distances. Vibrancy of downtown: Choose communities that have successful downtowns as measured by a strong retail and service mix. Before gathering data on the number and possibly sales of businesses, establish geographic rings around the center of each downtown. You can use the Worksheet for Analyzing Your Downtown to summarize the number of businesses by retail or service category. This tool compares the demand for stores based on the spending potential of your trade area’s residents to the supply of stores actually in your trade area. To use the downloadable Trade Area Gap Analysis Calculator (MS Excel Workbook), you need to collect and enter some basic information about your community in an Assumptions worksheet within the Excel Workbook. Once your assumptions are entered, click the Report worksheet of the workbook to generate your report. Estimate how many businesses, by NAICS code, are in your trade area and record in column C of the Assumptions Worksheet.
Once assumptions are entered, the Report Worksheet generates estimates of trade area demand, supply and any gap (demand less supply) in terms of number of businesses.  For certain business categories (where data is available), data is also provided using square feet of business space as the measure.
Column F – Number of Businesses (Demand) is equal to potential sales in trade area divided by the average sales per U.S. Column H – Business Gap (in terms of number of businesses) is equal to number of businesses (demand) less number of businesses (supply).  A positive gap may be one indicator of opportunities for business expansion or recruitment. Column I – Square Feet of Business (Demand) is equal to potential sales in the trade area divided by the average sales per square feet from the 2008 Urban Land Institute’s Dollars and Cents of Shopping Centers. Column J – Square Feet of Businesses (Supply) is based on an estimate of actual occupied business space as inventoried locally. The pull factor is another important tool of retail trade analysis that will help you answer key questions and identify your community’s economic strengths and weaknesses. The answers to these questions are important to your community’s existing and potential retailers.
Local and regional economic data, as well as these tools of retail trade analysis, will help you analyze your community’s strengths and weaknesses. As noted, the pull factor is a measure of a community’s ability to attract consumer trade based on its population and statewide average expenditures. A pull factor greater than 1.00 indicates that a community is attracting more customers than its population base. The simple pull factor calculation demonstrated by the previous examples can be used for any geographic area with existing measures of sales and population, such as cities, counties, and multi-county economic regions.
To conduct a longitudinal analysis,  match significant changes in  pull factors with events such as road construction, the opening (or closing) of a store, a natural disaster, the  start of evening store openings, or an economic downturn.
Existing businesses and entrepreneurs can also use pull factor data to gain financing for expansion.  As an example, if a community has a strong building materials pull factor, people must be coming to the community to make purchases in that merchandise category. Business owners can then take a close look to see if they stock a full range of products in the merchandise category with a strong pull factor. When interpreting pull factors, you also should take into account political boundaries that may be producing unrealistic results not suitable for comparisons with other communities.  For example, many communities are actually two political entities because a river divides them. Pull factors are a good measure of how sales are distributed in a state and they enable quick comparisons among communities. Therefore, the retail sales surplus for Owatonna = $70,903,610 (or 66.7 percent above expected sales). States that release extensive sales data, such as Iowa and Minnesota, have made further enhancements to the expected sales formula.
Using a peer group pull factor requires calculating pull factors for many communities similar to the one you are analyzing and determining an average peer group pull factor.
Several state revenue departments house research divisions that release sales tax collections on a regular basis.
Minnesota uses taxable sales in its pull factor calculations, while some other states use gross sales.
You will also need to take local conditions into account when determining which data to collect. By understanding local retail spending patterns relative to spending in competing trade areas, you can estimate retail sales surplus and leakages.
Parameters of your primary trade area and trade center, and competing trade areas and associated centers. A list of businesses in each trade area, including the business type and estimated annual sales (typically obtained through a private data source such as InfoUSA). First determine the geographic trade area of primary interest, as well as competing trade areas. Aggregate sales by trade area by sector.  See Sheet “2 by trade area” in the “example surplus leakage” spreadsheet.
By plugging in the primary trade area of interest’s population, income ratio, and regional per capita sales per sector, potential sales can be calculated. The final Sheet “6 comparison” is set up to calculate the competing trade areas’ surplus and leakage.  See the example below. A geographic information system (GIS) is an excellent way to illustrate and analyze the geographic distributions of retail demand and supply, which is vital to understanding the market. More important, mapping these distributions will show the relationships between demand and supply.
To map supply, a GIS can use business addresses and plot existing retail locations in a given NAICS retail category. The combination of this information on the same map creates a powerful visual tool that can be used to analyze the downtown market. About the Toolbox and this SectionThe 2011 update of the Downtown and Business District Market Analysis toolbox is a result of a collaborative effort involving staff and educators from University of Minnesota Extension, Ohio State University Extension, and University of Wisconsin Extension. The toolbox is based on and upholds  the economic restructuring principles of the National Trust Main Street Center. Profitable retail and service businesses at street level are essential in creating an economically healthy downtown. These institutions have collaborated in the 2010 update of the DMA toolbox with assistance from the North Central Regional Center for Rural Development. We teach, learn, lead and serve, connecting people with the University of Wisconsin, and engaging with them in transforming lives and communities. The printable baby sign language chart helps you learn the basic signs so that you can in turn teach your baby.



The wall chart is particularly useful as a reminder for caregivers or babysitters who may be seeing the signs for the first time or just need a reminder. 17 Basic Signs – mommy, daddy, cat, grandmother, grandfather, dog, cat, more, all done, water, milk, diaper, bath, bed, car, ball, and book. The Baby Sign Language Kits, bundle together everything you need to get started with signing in one box, at a steep discount. Flash Cards expand your baby’s signing vocabulary giving them more ways to communicate and express their creativity. Yes, the baby sign language signs we use on this website are the American Sign Language (ASL) signs. Que dios te bendiga soy sorda lider ensenar para sordos adulto cristiano aprendimos lenguaje de senas y sign language. Courtesy is a complex concept and not a good starting point for a pre-verbal child learning to sign. None of this is to suggest we don’t want to teach courtesy, we just wait a little longer.
I was first introduced to baby signs in 1998 when my niece, Taylor who was born with downs, was being taught signing in her therapy. This is a wonderful site for me to help my daughter communicate with us until she starts to talk more.
The only place I know of that does it is 4 Wheel Parts, but you would think everybody should. On the show, we talk about what that looks like in the daily grind: food, travel, writing, books, parenting, work, fashion, and everything in between.
Updated from the original version (which is still available, below), this download has room for you to scribble out your day, make dinner plans, commit to taking care of yourself, and even motivation to make it through another day of LEGO-stepping.
These things tend to value at over $1,000 dollars yet are priced around $30, making it a no-brainer for you to purchase even if you’re only interested in three or four of the items. It examines business opportunities in terms of number of businesses the market could bear, total sales, and square feet of occupied business space. You have learned it is imperative to fill vacancies with viable businesses and to give residents access to necessary retail goods and services. This includes traditional retail stores such as pharmacies and groceries, but also services such as auto repair and hair salons.
A quantitative demand and supply comparison is important because it helps put numbers behind your analysis and gives you some measures to support your business development activities. Each business is classified by a NAICS code and a specific store category.  For example, 44211 is the code for furniture stores. This is mainly driven by the size of your trade area, the number of customers in your trade area, and their purchasing power. This is often organized by NAICS category and can be measured in square feet, number of stores, or total sales.  The data that is available to you and the ease of collecting this information determine how you measure supply in your community.
The spending potential of trade area residents typically determines most of the demand for local retail goods and services. Thresholds are typically calculated by dividing the population of the state or country by the number of businesses in the state or country.
They are especially useful in a first-pass attempt to identify possible opportunities for business expansion or recruitment. Using 2009 data on Wisconsin cities and villages, a threshold analysis was conducted to determine the number of “downtown stores” relative to community size.
Actual (or estimated) sales are compared to potential sales to determine a “surplus” or “leakage.” If actual sales exceed potential sales, a sales surplus exists. However, market potential is often based on state or national spending patterns that may not accurately reflect your local market, and the income adjustment may be overly simplistic. In addition, some communities conduct research specific to these market segments such as visitor intercept surveys, second-home owner geo-demographics analyses of their place of origin, and in-commuter paycheck surveys.
To analyze supply, a database of existing businesses must be constructed for each store category examined.
A number of national firms (such as InfoUSA) compile this information from Yellow Page listings, annual company reports, and other sources.
Certainly this is a time-intensive process, although it provides the most current and accurate information. Are there clusters of businesses in a store category that have created a critical mass of activity and a distinct market niche for the business district? Are existing downtown stores in this category providing the merchandise and service that local shoppers demand?  Is the category already present in the district and is it thriving?  Are the stores chains or independents?
Do surrounding communities with regional shopping centers and big box stores siphon business in this category out of the trade area?
For purposes of this toolbox, these opportunities are identified as specific business categories where demand exceeds supply. The Retail and Service Business Opportunities Worksheet that follows can be used to summarize your analysis for each of the business categories being studied. The purpose here is to determine if demand significantly exceeds supply, a signal that there may be business development opportunities. A derivation of “threshold analysis,” this tool helps you compare the number of businesses in your downtown with other similar-sized communities. This tool allows you to calculate trade area consumer spending and potential demand in terms of estimated sales, number of stores and square footage—then compare each with actual levels.
Pull factors can be used to measure the relative strength of the local retail market and whether or not it is drawing in sales from other communities.  This tool does not necessarily represent the trade area, as it is based on political boundaries. This information may come from surveys, focus groups, or demographic and lifestyle analyses.
The quantitative comparison of retail demand with supply provides an initial measure of market opportunities. Examples of similar businesses that are successfully operating in other downtowns may be helpful. They are especially useful in an initial attempt to identify possible opportunities for business expansion or recruitment.
Community attractions, seasonal population, and a regional market draw all have an impact on the types of retail and service businesses that are located in a community.
The Retail and Service Business Mix Analysis of Wisconsin’s Downtowns staff paper can be used to complete the comparison. Using 2009 business location data for Wisconsin cities and villages, threshold research was conducted to determine the number of “downtown stores” relative to community size. Choosing the right comparative downtowns can inspire local efforts to attain a higher level of economic vitality in your town. For purposes of this analysis, you should choose downtowns with “vibrant” commercial activity (i.e. Seasonal population– If your community is a retirement or vacation destination, choose communities that experience increased seasonal population for the same reason.
This step can be repeated and columns added for each comparative downtown to create a business mix comparison table. Economic Census released in 2010, and the 2008 Urban Land Institute Dollars and Cents of Shopping Centers. Sales Per Capita is equal to the total employer and non-employer sales in each business category (according to the 2007 U.S. Store is equal to total employer and non-employer sales in each business category (according to the 2007 U.S.
The pull factor is a measure of a city, county or regional area’s ability to attract consumers based on its population and statewide average expenditures.
Understanding market performance will help local leaders and development practitioners foster a more conducive environment for retail business development. These tools are not intended to be used in the measurement of specific business or real estate demand and supply analyses, but they are intended to gauge the overall economic health surrounding the business district.
It can be used for any trade area for which retail sales are measured whether it is a city, county, or multi-county region. However, you can obtain a better indicator of the health of your retail sector by graphing pull factor over several years for your own community and the communities around you.
Business owners should ask questions such as, “Do we have the latest types of fireplace inserts and accessories? Two such examples are Lafayette and West Lafayette, Indiana, and Mankato and North Mankato, Minnesota.
They may simply buy more quantities of retail items or they may buy more expensive items, such as a 50-inch plasma TV versus a 32-inch flat screen variety.
That equates to 16,578 more people shopping in the city (or 66.7 percent above the Owatonna population). For example, in Minnesota and Iowa, sales data is grouped by city, county, and state using 3-digit NAICS codes. However, you may still be able to obtain some sales tax data for communities or counties with a local option sales tax.
For example, the overall personal income for a very rural county may not indicate average consumer income because a high degree of farm income skews the results. This approach illustrates the pattern of retail spending within the local trade area relative to spending in neighboring areas (competing trade areas).
Retail sales leakages may show that local demand for a particular product is not being met within the community, while retail sales surpluses may indicate that the local community serves a regional market that pulls in consumers from outside the local area. In general, surpluses and leakages are determined by comparing actual sales to potential sales.
You will need to know the trade region population for this step.  See Sheet “3 by region per capita” in the “example surplus leakage” spreadsheet.
Mapping these distributions will show concentrations of high and low demand, as well as the location of potential competition. For instance, do areas of high demand have a large number of nearby stores or do gaps exist in the market? Furthermore, the amount of consumer demand can be mapped using the demand calculations previously discussed in this section.
If the locations of retailers do not match the concentrations of consumer demand, a market gap may exist. The update was supported with funding from the North Central Regional Center for Rural Development. The Wisconsin Main Street Program (Wisconsin Department of Commerce) has been an instrumental partner in the development of this toolbox.
Many moms experiencing speech delays and other cognitive differences have taken advantage of the free resources available in our website to get started with signing.
We are finally starting it at 7 months (I’m a little late it seems) and I know she will enjoy it. Head here to read why I like these bundle sales, even with a minimalist approach to life, and sign up here to find out when the next one releases. This is a simple discussion guide to get conversation flowing—no right or wrong answers; just an appetite-whetting for rich conversation. Read more about how we used this chore chart with our preschooler, and also how we handled her allowance.
Other more qualitative and equally important market considerations are also discussed in this section. You want to support your work with data and solid analysis to help ensure the success of these businesses.


However, as the analysis is as much an art as a science, your study must also consider numerous qualitative factors. This is often calculated by NAICS category.  Demand can be measured in square feet, number of stores, or total sales. Bureau of Labor Statistics as well as private data providers that can be used with local demographic data to estimate local demand. However, thresholds are only based on population and do not take into consideration other important factors, such as income or nearby competition. Economic Census, you can obtain reliable data to estimate domestic sales per capita and average sales per store. A surplus implies either that (a) people travel from outside the trade area to shop or (b) people living within the trade area consume more than would be typically expected given their income levels. The database of NAICS store categories should include all of the retail businesses within the trade area (the geographic area that was used to calculate demand). Purchasing a list can be expensive depending on the number of businesses in your trade area. For example, a cluster of home improvement stores may not represent oversupply in the market if together they have created a destination.
These may include malls, strip centers, commercial corridors, neighborhood centers, and more. Are the selections of specialty retail in your downtown as interesting and exciting as those in other places? Use findings from business owner surveys, consumer surveys, and focus group sections of the toolbox. Given the amount of information that must be gathered, we suggest completing this worksheet for high-prospect categories only.
These considerations should provide additional insight on local consumer behavior and competition.
If there is a significant amount of unmet demand, there may be opportunities for existing businesses to expand or for the community to recruit new businesses.
It is important to step back from the analysis and ask if your recommendations are based on actual consumer behavior and business location practices. The Innovative Downtown Business Online Clearinghouse provides examples of specific stores that have been recognized as generators of traffic to their respective downtowns. However, thresholds are only based on population and do not take into consideration other important factors such as income or nearby competition. While doing so, record the number and types of businesses on a clipboard or hand-held device.
This also becomes a base for further market analysis that will help current and future business operators make more informed decisions. As you view pull factor examples from various sources, you will see that they all use similar information but may change the order of calculations, use alternative names for intermediate steps, or determine pull factors as dollars, people, or ratios. It can also be used for the sum of all retail sales or individual NAICS categories if the state releases such data for local government divisions.  If you are able to obtain data for service businesses, such as restaurants or repair shops, the pull factor analysis can also measure your economic health in those categories.
You can also use this calculation for non-retail businesses, such as restaurants or repair shops. The graph below shows that a strategy implemented in the late 1990s helped Owatonna outperform other shopping centers in neighboring communities. However, if you have data for different NAICS retail categories, you can start to understand factors that draw people to your community. Did another community begin a loyalty program?  Did a major employer lay off a large number of workers?
Cities that have a population of 10,000 will have a different retail mix than those of 90,000.
In smaller communities with very few firms in an NAICS category, no sales tax collection data is released. This data normally encompasses more than retail, but it still can offer some useful numbers for comparison. Gross sales numbers can be an issue if retailers feel no responsibility to provide accurate numbers, while retailers are legally responsible to provide accurate taxable sales data. A sales surplus exists where actual sales exceed potential sales.  Potential sales are calculated by estimating sales that could be achieved in a trade area if its local population only shopped there.
Again, if you have access to ArcGIS Business Analyst, you can estimate the population and per capita income by using the spatial overlay function to overlay the shapefile of trade areas on the block group shapefile containing demographic data.  See Sheet “4 income ratio” in the “example surplus leakage” spreadsheet.
As GIS can overlay, or superimpose, different data sets onto one another, it is an ideal tool for exploring this relationship.
Once mapped, the supply of retail locations can be shown along with the retail demand distribution. If these gaps occur in or near a downtown or other business district, the maps could reveal opportunities for new retailers. Many moms who have used baby sign language have reported that their babies can sign about three signs at 8 months and as many as 10 signs by 12 to 14 months. He hears and can understand and react or follow directions but when it comes to us understanding him, that’s when the problems arise. You may want to introduce signs via flashcards and play and select signs that match the interests of your toddler. I am recommending this site to everyone I know because you never know what may happen during childhood development. Specific tools to measure demand and supply, ranging from simple to complex, are presented. The following chart illustrates factors that go into an evaluation of retail and service business opportunities. You must also consider other qualitative measures to accurately understand characteristics of your local market and of non-local consumers who may shop in your community.
While Wisconsin data may be more or less useful in other parts of the country, similar thresholds can be calculated for other states using data from the U.S. However, if actual sales are less than potential sales, the trade area suffers a sales leakage. While some sources provide sales estimates per establishment, they typically do not include store size (square feet)—a useful method in comparing demand and supply.
While collecting sales estimates will be nearly impossible using this method, it is possible, with a little practice, to estimate store size (see Estimating Store Size exhibit). The supply analysis must recognize that downtown may not be the ideal location for all store categories.
Business development opportunities also may exist in areas where supply is greater than demand, but special conditions offer potential.
This method is the most labor intensive but provides first-hand, visual information on the retail character of the business districts.
The Economic Census provides the most complete and accurate dataset about sales per establishments and per person in the United States. The most common modification by economists is the inclusion of the local income index in the pull factor calculation. For example, a longitudinal analysis that covers multi years will give you insight on how important events affected your community’s retail health. Once you see how your retail community has fared during significant events you will see how resilient or susceptible your community is to external factors. In cases like this, merge the population and sales data of the city and suburb to produce one community for comparison with others. Stone developed formulas to obtain this more layered data, as the following examples illustrate. Also, cities of 10,000 people in the middle of a metropolitan area with a population of 2 million will have different retail mix than a rural community of 10,000 that is the largest marketplace within 1,200 square miles. This is because of disclosure issues for business categories that have one or few business establishments in a geographic area. Since tax rates can vary from county to county, use the tax rate to determine the taxable sales that generated the revenue. Remember, too, that while grocery stores may not collect sales taxes on food items in some states, they also sell taxable items (such as candy, sodas, and cleaning products) that can be used in comparing pull factors. Potential sales are a function of population, income, and known regional demand in particular business categories. For those who want a simplified way to communicate with your baby, you will want the Baby Signs. In 2000 I had my 3rd baby and when he turned 6 months old, we began teaching him the basic signs like more, drink, eat, play, and all done. Nevertheless, for certain categories, a demand and supply analysis by product type may be appropriate. Market potential can express demand in total sales, number of businesses, or square feet of retail space (also known as gross leasable area, or GLA).
A leakage indicates that either (a) people living within the trade area shop outside the county or (b) people living within the trade area consume less than would be expected given their income levels. Further, the data may not be sufficiently accurate as there are often errors in store category coding, location, business status, etc.
The building and business Inventory described earlier in the toolbox can be used to record this data.  Also, if your city has a GIS department it is possible they have building footprint data that could be used to estimate size. For example, some communities draw customers from outside their trade area by creating a niche market. The table provides the average number of businesses and combined sales within each of the three rings (buffers) for cities and villages with 5,000 to 10,000 residents. However, this method might include data errors (in “geocoding” and NAICS classifications) and does not allow for any additional insight that could be gained by actually inventorying the storefronts. Outputs generated from the calculator can be used as initial estimates of your trade area’s spending potential. A surplus implies either that (a) people travel to a trade area of interest to shop or (b) people living in this trade area consume more than typically expected given their income levels.  In cases where actual sales are less than potential sales, a sales leakage exists. For those who want more complicated signs, or want the ability to communicate with the deaf (which is obviously useful) choose this. My son was about 19 months old when he began to speak and even though it was hard to understand his words, through his signing, we were able to communicate with him.
Tools in this section such as the  Gap Analysis Calculator (Tool 2),  Pull Factors (Tool 3), and the Trade Region Gap Analysis (Tool 4) can be used to calculate market potential and business gaps for your trade area. You should also consider findings from other research on non-local consumers in making recommendations. His ability to communicate with us through sign made for a very happy baby who didn’t cry much.
For example, if your baby becomes engaged with a certain toy teach her the name of the toy as well as the sign. For the parents who question if they can teach this to their babies, just remember repeating yourself to your baby and continuing to show the sign at the same time will work. A leakage simply means that total sales within a local area are not as high as they could be based on the area’s population.
To remind yourself of the importance of repetition go ahead and print our signing for babies chart .



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