How to research a location for a small business.
Most first locations are chosen on a feeling: the space looked right, the street felt busy, the rent seemed fair. The feeling is worth something. It is also checkable, because almost every question behind it has a public record that answers it. This guide walks through the six questions in the order a lender, a landlord or an experienced operator would ask them, names the record for each, and points to the free DoorWorthy tool that reads it for your type of business.
1. Who lives and works nearby?
A business sells to the people within its reach: residents for an evening and weekend trade, workers for weekdays, both for a coffee shop on a corner. The Census counts both. The American Community Survey gives residents, households and household income by ZIP code, updated yearly as a five-year estimate. The Census LODES data counts jobs by where people work, so a ring drawn around an address shows how many workers are within a short walk.
Read it: the ZIP check measures a ZIP from its center; the free location check measures rings around one address. Both show the year of each figure.
2. Who is already selling the same thing?
Competition is not bad news on its own. A street with four coffee shops is a street people go to for coffee. What matters is how many customers each one shares. Two records answer it: the Census County Business Patterns count of establishments by industry, which says how many businesses of your type a state, metro area or ZIP already has per 10,000 residents, and the mapped businesses near an address, which say who is on the block.
Read it: How many for the counts and the ZIPs with the most and the fewest; the free location check for the named businesses within a mile of an address.
3. What does the road carry?
Traffic counts are public. State departments of transportation report annual average daily traffic for the roads they count, and the Federal Highway Administration collects them. A count says how many vehicles pass, not how many stop, so it answers a narrow question: does the street have the volume a drive-by business needs, and is the count recent.
Read it: the free location check shows the nearest count and its year.
4. Will the rules let you open here?
Two sets of rules apply. Zoning decides whether your use is allowed at that parcel, and whether a change of use or a parking count stands in the way; it is set by the city and read from the parcel’s zoning district. Licensing decides what you file before opening day: the entity, the tax accounts, the health or trade permit, the alcohol license, the employer registrations. Every state publishes its own list, agency by agency.
Read it: How to open lists the licenses, permits and registrations for each business type and state in the order to get them, with the agency. The full report reads the zoning for one address.
5. Does the math work?
Rent is the number people fix on, but it only means something next to sales. A common test is rent as a share of sales: the IRS publishes what businesses in each industry actually spend on rent, payroll and other costs as a share of receipts, and the Census publishes how many establishments in each sector open and close each year. Together they say what a typical operator in your line earns and how often one gives up, so your own forecast can be judged against something real.
Read it: Profitability for the closure rates and margins by business type and state; the calculators for rent against sales, the lease over its term and the margin your numbers leave.
6. What do the records miss?
A record describes a year, a ZIP, a road. It does not know that the anchor tenant is leaving, that the sidewalk is on the shady side, that the parking lot floods, or that the owner next door is retiring. Walk the block at the hours you would be open. Count who goes in and out of the nearest competitor. Ask the neighbors what they would want. Then read the lease with a lawyer. The research narrows the choice; the walk and the lease decide it.
Before you sign: a checklist
- Residents and workers within reach, with the year of the count.
- Competitors of your type nearby, named, and the count per 10,000 residents for the area.
- The traffic count on the road and its year.
- Zoning that allows your use at this parcel, confirmed with the city, not assumed.
- Every license and permit the state and city require, in order, with the agency.
- Rent as a share of your sales forecast, compared with what the IRS says businesses like yours spend.
- The closure rate for your sector in your state, so your forecast includes a bad year.
- Two visits to the block at your opening hours, and one on a bad-weather day.
What about asking an assistant?
A general assistant is a fine place to learn what a term means or what questions to ask. It cannot pull this year’s household count for one ZIP, the establishment count for one metro, the traffic count on one road or the fee on one agency’s page, with the date attached, for your business type. DoorWorthy’s pages exist to be that source: each figure is a public record with its year, laid out for one business type and one place, free to read and free to cite.