AV Business & Marketing
steps to place / location
This 9 step process
selects a brick-n-mortar location but may exceed your needs. If you're looking for a quick less
qualified answer, then
skip to "Taking it to the street" that follows Step
9. If you commence with Step 1, then confirm
these three definitions for clarity.
Trade Area - The total geographical area in which your
2. Trading Areas - Locations within
the trade area where the action of trading takes place.
3. Location - The address you select
in the trade area.
The "9 steps" define trade area boundaries, locates its
trading areas, compiles trade area demographics, and
selects a brick-n-mortar home.
Trade area map
a. Obtain a map of the trade area that includes streets, highways,
freeways, geographical features, plus the census tracts.
b. Access a U.S. census track map of the trade area: U.S.
Census Tract Maps.
c. Alternative census
tract DATA source: Melissa.com >
2 Trade area barriers
Highlight natural and
man-made barriers within the trade area that impede
travel to trading areas.
The barriers include mountains, rivers, highways, freeways, railroad tracks,
etc. A barrier placed between a customer and a
retail location impedes travel. People avoid barriers. They tend to drive to
locations on their side of a barrier even if a convenient bridge or underpass is
Seek and highlight popular local routes within the trade
area to shopping malls, big-box retailers, churches, schools, parks, and other popular destinations.
Select a potential location on a route between targeted
customers and the competition.
Step 5 Circular mapping
Return to your trade area map. Draw a series of
circles with the potential location at the
with radii of 1 mile, 2
miles, 5 miles, 10 miles, 15 miles, 20 miles.
Go to the U.S. Census website at https://www.census.gov/2010census/popmap/.
census data source: Melissa.com
> Use Lookups
Search for the census tract data of your trade area.
Enter the census tract data into a spreadsheet as
1. Title the 1st column as Tract
the census tract numbers in the first column.
2. Add the following demographic
headings in succeeding columns:
- # of
- Income group*
*If more than
one group is targeted; then add a column for each
- "Age group"*
*If more than one group is targeted; then add a
column for each group.
3. Insert the census tract data into
each applicable demographic column.
Add a new
column with %
as its heading.
Return to the census tracts mapped within the
trade area barriers,
your local route
knowledge, and distance
from the proposed location:
% of households
inclined to travel from each census tract toward the
your guesstimate into the '%' column for each census
Step 8 Adjusted demographics
column to the right of each of the following columns:
- # of Households
- Income Group
- Age Group
Title the new
- Adjusted Population.
- Adjusted # of Households
- Adjusted Income Group
- Adjusted Age Group
- Adjusted male
- Adjusted female
each of the demographic columns by the "%" column
results of step 7.
Enter the result into each relevant 'Adjusted' column.
Review the adjusted
The totals of each 'adjusted' column are your
tailored-made demographics. Do the adjusted
numbers still support your confidence in the trade
area? If yes, continue.
Step 9 We're almost home.
Your trade boundaries area are drawn. You have
identified your trading areas, barriers, and local
Plus, you have a tailor-made demographic sketch. This final step seeks to reaffirm your data
with an on-the-street assessment.
Taking it to the street
Take drives from different points within the trade area
to the proposed location. Solicit opinions from
existing retailers regarding the site, the trade area,
and alternative locations. If your inquiries still support your trade
area data, then secure the location.
The best locations positioned on popular
routes between customer prospects and competitors cost more. Strategically they
"head them off at the pass".
them off at the pass
Lower-cost alternatives can
offset a higher-cost location advantage with increased
promotional expenditures. However, the
increased promotional cost is often higher than the
difference between a lower cost and a better location. If your budget allows,
select better. If needed, entertain the idea of
reallocating budgeted promotional funds to rent.
Secure the location
with a lease or purchase. Enlist the guidance of a
seasoned Realtor who is very familiar with the local
travel paths and trading areas. As a rule, they
are the gray-haired agents at a rear desk in a real
estate office. Present the agent with a list of qualifying needs and wants.
If purchasing is an option, consider its long
term commitment. It's easier to move
from a lease. On the plus side, a
purchase transforms an expense into an asset.
Also, hire a lawyer to review the lease or purchase
documents before you sign. Both are negotiable documents. Consider editing or writing an alternative
to eliminate items you
cannot afford and add items you must have.
Regarding a lease; seek five year terms with an option to renew. In all cases be
reasonable. This is an agreement
that you and the landlord will live with for many years