Know Your Customer: Data Needed in Setting up A Business

 

Know Your Customer: Data Needed in Setting up A Business

When you think of putting up a business the first question to ask after you have the initial capital outlay is who will use the products I am going to sell? In short you want to know who will be your prospective customers and their socio-economic status so that you will know at the onset if you are going to be successful in your initial venture into the world of business. You cant afford to lose any investment money because times are hard and money is money. You don’t like to waste your money in a blind investment that’s why it is very crucial to get basic population data so that you have a good grasp of the population composition in the area plus the basic socio-economic characteristics within a group in the area where you want to put your business venture.

Part of the subject matter I used to teach is Demography -- a branch of Sociology which is the study of population composition, population projection and basically the age-sex distribution in an area. These data are very important when you are putting up a business. Mixed this data with cultural data and you have a good gauge of the kind of people in a certain area or locality. These data are crucial in setting up a business.

 

http://franchisessentials.files.wordpress.com/2009/05/group-of-people.jpg
http://franchisessentials.files.wordpress.com/2009/05/group-of-people.jpg

Pertinent Data We Need to Have For a good start in Starting a Business:

  • Are there how many people who will utilize the product? How many people are residing in the area by age and by sex? How young is the population, or how old?
  • What is the socio economic status of the area and can they afford the product you are going to sell? What are their occupations, average household income and mean average household size are important data as well.

Knowing the Prospective client/customer:

Say for example you are going to set up a store within the area: first thing to do is to collect the necessary population data which can be accessed and found in the portals of Census data in every nation. You can also access population data in your local area as this is also provided in the Census government portals. Other sources of data are the local city office and different offices within the area like the Unemployment Office and the public libraries within the area.

Importance of Census Data and Where to Secure Them

On April 1, 2010 here in the United States, the people will start to fill out mailed questionnaire pertaining to basic population data like age-sex composition of the population, race, average household size and other pertinent data needed for fiscal planning and budgeting. They however posted the latest census data and pertinent household economics in the government portal here. You can access data by state, for example I am here at Texas now I can go to US census website then choose specific state so that you can see the basic socio demographic data you need like race composition, here.

Here in the United States the portal for the Census Bureau can be click here. The current data as of the latest census is also available on this website.

Needed Data

  • Age Composition is simply the age distribution of the population, how many infants, adult, middle ages in a certain population. That is why the census data is very important because it usually collects data on the age sex composition of the population. How many are youth ages 13-19 years old or young adult 15-24, or 50 and above, or how many infants are there in the area. This is important because age is very important in targeting of customers
  • Sex composition: what percentage of the population are Males/Females. You can also get aggregated data by age and gender
  • Median income of the population: this is usually secured at the city hall in your locality, check how much is the average income or the median income of the population so that you will know the buying capacity, and check what kind of labor force distribution within the area so that you will know if they can afford the product you are going to introduce. median income is more important data than the average income because it is a clear description of the capacity to buy within the area. Average income is affected by a very high response like for example there is a millionaire in the area.
  • Know what type of occupations people have within the area so that you will know what will be their usual activities. Say for example people who are residents in an area are mostly blue collar job people then you know what products will click to them. Usually these are available in your local city administrators office, or search if they have certain surveys like "Labor Force Survey" which is usually conducted nationally and check if you can get specific local data. Usually these are available in the Internet just know the site you are checking, usually they are government portals.
  • The race composition in the area is also important for example, what kind of people or what are the races of the people in the area, should you introduced pizzeria or vegetarian restaurant, burger fast foods or a taco restaurant.
  • Get the data on population density the number of people residing in a square kilometer, are they homogeneous etc. This simply means how are they spread out in the locality.
  • Get also the data on other businesses that are existing in the area to see if there are competitors.

Success of business:

The future of business depends also on population projection and age sex composition meaning predicting the success of your business lies in what type of people will reside in the area in the future.

Things to do:

Visit your local city office and get data from administrators office or the local city hall library. Basic population data needed are: age-sex composition, median income, occupation, race/ethnicity and population density, list of existing businesses in the area etc.

  • Check on websites in government portals about the census population data nationally and locally
  • Participate in population data census always, return ,mailed in questionnaire on time. Be friendly and answer questions when interviewers visit your area.
  • Check and visit the local government office to secure data such as labor force composition of the area, median income, how the people are distributed, population density etc.

There you go, now you can start to analyze and put together the data so you can have at least the basic information you need when putting up a business.

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Comments 20 comments

torimari profile image

torimari 6 years ago from Pennsylvania

Very informative and educated hub. :) Great tips and thanks for the putting the places to attain such data.


dohn121 profile image

dohn121 6 years ago from Hudson Valley, New York

Wow. What a great hub detailing so many ways in which to determine the success of one's future enterprise (business). You did some really great research here filled with several helpful links. Did you know that McDonalds, before opening up another restaurant estimates the amount of traffic that drives by their prospective lot/property per hour? Awesome job, Maita. Thank you very much for sharing this.

Dohn


Hello, hello, profile image

Hello, hello, 6 years ago from London, UK

Good work with lots of information. Thank you.


ehern33 profile image

ehern33 6 years ago

Wow, I think I should hire you.. LOL Nah, you probably are to expensive, you would require the big bucks.. ;o)


blondepoet profile image

blondepoet 6 years ago from australia

Your hubs keep getting better and better. Well done Maita woo hooo.


"Quill" 6 years ago

Maita... again you amaze me with the diversity of your writing. I do hope you apply all you have shared into something you can get started. You would be a natural one on one business owner, a small boutique specializing in something you love...

Blessings


prettydarkhorse profile image

prettydarkhorse 6 years ago from US Author

Hi tori, thanks dear, Mata


prettydarkhorse profile image

prettydarkhorse 6 years ago from US Author

Hey Dohn, oh maybe because they want to know how many people are passing by? Thats neat and it is important as well. Thanks and good morning to you, BTW your latest hub rocks again, Maita


prettydarkhorse profile image

prettydarkhorse 6 years ago from US Author

Hi hello, thanks Maita


prettydarkhorse profile image

prettydarkhorse 6 years ago from US Author

Hi ehern, i can work for you< you can just tell me what I will do and I will do it for free, BTW I can research for you in the internet and email you for free, Maita


prettydarkhorse profile image

prettydarkhorse 6 years ago from US Author

Hi blonde, thanks dear, Maita


prettydarkhorse profile image

prettydarkhorse 6 years ago from US Author

I like your suggestions Quill, hmm, let me think about it, Thanks, Bless, Maita


andromida profile image

andromida 6 years ago

you revealed a great source of information.Currently,I am learning about business;I found that the demographic information of customer base is very very crucial for business success.Hope to learn some marketing tips from you as well.thanks Maita.


Mystique1957 profile image

Mystique1957 6 years ago from Caracas-Venezuela

Maita...

Very helpful information. Quite thorough and precise!

Well, if they fail at their business, they sure didn`t read this hub! They`d better read it!

Thumbs up!

Warm regards and blessings,

Al


prettydarkhorse profile image

prettydarkhorse 6 years ago from US Author

Hi andromida, what business are you setting up now? I am glad this article helps you in a way, Maita


prettydarkhorse profile image

prettydarkhorse 6 years ago from US Author

Hi mystique, glad you read this oen and for your very nice compliment, Thank you, Maita


andromida profile image

andromida 6 years ago

Hi prettyhorse, I am trying to market digital video recorder solution-that's why I am reading lots of business and marketing hubs,:).thank you.


prettydarkhorse profile image

prettydarkhorse 6 years ago from US Author

Oh thats a nice business Andromida, how far have you started your business already? Good luck to you, Maita


LavellaVision profile image

LavellaVision 6 years ago from Delaware

I like it! I can really use this information. These are things one does not always consider when starting a business. Keep'em coming.


Cheeky Girl profile image

Cheeky Girl 6 years ago from UK and Nerujenia

Great info here, Maita. Sadly I do not live in USA. But there's nothing like a census and lots of ensuing information to help businesses find out how much people have to push business their way. It's like milk for the cat! Heh! Great Hub! And timely too! Lots of business people should read this!

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