How to Find Demographics

Blissfield MichiganI’m asked all of the time, “How do I use demographic information to find the best location for my new business?” This article will also show current business owners, how to find those communities to market to though. All of the information you need is available online and is 100% free.

I’m going to take through a real world example today, in which I show you the sites I use and what demographics I find to be the most helpful. The following data is what I find to be most important when deciding on where to place your business:

  • Disposable Income in the Average Family
  • Stability of the Real Estate Market
  • Cost of Living
  • Population
  • Income
  • Median Age
  • Percent Currently Working
  • Stability of the Neighborhood
  • Location of Competitors
  • Location of Non-Competitors

Where to Find Demographic Information

I use the following sites to gather most of my demographic information:

  • Zillow.com : Provides every bit of information you’d ever need on the real estate market of any area in the U.S. (Also provides some nice maps)
  • City-Data.com : Provides a really quick overview on the most important demographic data. (Also is very up to date)
  • Maps.Google.com : Allows you to easily find your potential competitors and non-competitors
  • FactFinder.Census.gov : Provides the most accurate, but some times dated information
  • Censtats.Census.gov : Provides extremely accurate information that is updated every 1 1/2 to 2 years

Disposable Income in the Average Family

For some reason, most demographic reports pay little to no attention to the disposable income in an area? There are many ways to discover it, and while I won’t detail every way, I’ll show you some quick ways to find it.

If you are comparing a bunch of different cities for disposable income just type in the zip codes at city-data.com. Scroll down the page a little to find the Cost of Living Index. The lower the number, the more disposable income, but this number is only to be used when the average household income is very similar.

For the most accurate gauge of disposable income you have to:

  • Find the median household income
  • Subtract median monthly owner costs for people with a mortgage

You could also get estimates on electricity, heating, etc. costs and subtract those costs from the income number. Poverty rates are also of great value. All of this is available from both City-Data and Censtats.Census.gov.

Stability of the Real Estate Market

This can be found easily at Zillow. This is what I found on some specific spots in Michigan:

Name MOM Home Value QOQ Home Value YOY Home Value Avg Value Value 2007
Ida, MI 1.1% 3.9% 6.8% $126000 $172000
Riga, MI na na 4.96% $132000 na
Petersburg, MI 1.1% 3.9% 3.0% $117700 $156000
Ottawa Lake, MI 2.4% 7.9% 2.0% $136000 $173000
Blissfield, MI 1.4% 12.4% 1.0% $99900 $150000

While your at Zillow grab some photos of the areas to be used later. Here is one of mine:

Blissfield Michigan

Later I’ll be overlaying these cities on Google Maps, so that I can locate competitors and non-competitors.

I also created a massive article on real estate value fluctuations, which can be found here Real Estate Values.

Population, Income, Median Age, Percent Currently Working, etc.

All of this information is readily available at City-Data, but we can also use the Government Census data to spot trends. All of these locations are in the same county, Monroe Michigan. If I wanted to find employment trends in Monroe I could just go to this Government Census page. It lists the flucuations in employment from 1969 to 2000.

To find more accurate employment data you could go to the Bureau of Labor Statistics. Their they list the up to date unemployment rates in numerous communities nationwide. You’ll also find a ton of information there, on inflation, what consumers are spending money on, industry earnings, etc.

Ok, from the Government Census page and City-Data I gathered the following information for my locations in Michigan:

Name Cost of Living Property Taxes Population Age Household Income
Ida, MI 88.4/100 $1229 3359 36.5 $62331
Riga, MI 87.1/100 $1043 1020 37.7 $59580
Petersburg, MI 87.0/100 $1261 5623 36.3 $61714
Ottawa Lake, MI 85.6/100 $1155 4064 38.9 $59924
Blissfield, MI 87/100 $1296 5546 37.3 $45709
Name Mon. Costs Poverty Level HS Degree BA Degree Employed
Ida, MI $1373 4.5% 86.8% 24.4% 66.6%
Riga, MI $1283 7.5% 76.4% 8.1% 70.9%
Petersburg, MI $1352 6.3% 84.1% 12.3% 67.3%
Ottawa Lake, MI $1263 7.0% 87.6% 14.4% 70.8%
Blissfield, MI $1277 10.1% 88.3% 17.4% 67.6%

Like I stated before, I also gathered information on issues specific to this business like time to work, percentage of people with disabilities, but the main focus was to find the area with:

  • The Highest Disposable Income
  • The Largest Number of Young People
  • Most Stable Community

Based off of the information above Ida looks great, but if a location existed between Ida and Ottawa Lake, with no competitors; that would be better yet.

Demographics and Maps

If you go to Google maps and search for the word store, and a location, you’ll see every store in that area. Why is this important? You want to find a location with current stores, but that doesn’t contain a competitor.

Since I got my city map from Zillow, I can now drop them on a Google map and see what my options are. Here is a map with all of my competitors on it, represented by black dots:

Demographics Competitors

Well, there is a competitor already in Blissfield so that really re-enforces the idea to not locate their. There is a big empty area as well in Ida and Ottawa Lake. So, now if we can find local high traffic stores to locate next to (like grocery stores) we’ll be set.

Here is the map and I circled specific areas that looked good for numerous reasons.

Best Demographics

The Rauch Rd location looks fabulous because of the proximity to Ida and the stores there, but either of the other locations would probably work great as well. You’d definitely need to be able to buy property there obviously. I would also visit those local business’s and ask if they think your business would be a good fit.

That’s All Folks

That is a brief overview on how I study demographics. If you have any questions leave them in the comment section below.

Till Next Time

Think Tank

2 Responses to “How to Find Demographics”

  1. Tara says:

    I am trying to get a list of disposable income level by zip code. Do you know of an effecient way to generate this information?
    Thanks!!

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