Identifying market opportunities

Identifying market opportunities

Once you have established a positive relationship with existing businesses, have developed an understanding of the average customer who is currently attracted to your district, and have gained insights from existing customers and businesses, it is time to start thinking about goods or services that are currently not being adequately provided to meet local customer needs. It is useful to think about demand for goods and services rather than business types, as it may be more feasible for an existing business to expand its offerings than to recruit a new business.

In addition to the needs identified by existing businesses and local residents/customers, there are other district elements that could be considered when identifying business types that would complement the district. For example:

  • The size and location of your vacant spaces. If suitable space isn’t available for a desired business, space will need to be created, or incentives developed to help renovate existing spaces.
  • The business mix of competing/aspirational districts. Take a trip to visit districts similar in size and economy to your district, and take note of the number of businesses that fall into each of the following categories: retail, personal service, professional service, restaurant, entertainment, civic. Compare your district mix to other areas to determine what shortfall exists and what business types might help fill the gap.
  • From a business mix perspective, districts hoping to create a vibrant district should seek a business mix that provides an even mix of food, retail, and options open after 6 p.m. These categories can overlap (i.e., a restaurant can be counted as such and also counted among the businesses that are open after 6), and even service businesses that also sell goods, such as salons, can be included in the retail mix. However, this ratio of thirds is typically sufficient to create opportunities and a sense of vitality for visitors.

Example from sizeup.com

Using the list of desired businesses identified through the above methods, districts can explore the amount of sales necessary to support this type of business at the local level. Detailed retail supply and demand reports can be generated on behalf of the area by partners such as regional planning commissions, extension agents, Main Street organizations or small business consultants, but much of the information can also be found online via resources such as Sizeup.com, a site that provides information on the average annual sales volumes for various business types at the county or municipal level, as well as maps illustrating the level of local demand and competitor locations.