A Map For Mom (& Pop)

Steve Lackow

GIS, mapping, and spatial functionality have never been more available to small businesses and home offices (SOHO). Learn how small business owners can invest in basic GIS to improve their marketing, communications, and ultimately the bottom line in this informative and fun presentation.

The Information Revolution & Small Business Site Location

Until very recently, small businesses were clearly disadvantaged against larger companies in terms of business planning, in particular site location planning resources.  Even if they realized the need for planning, small businesses lacked the expertise and resources to approach their markets and customers like "the big boys do".  They didn't have the computing hardware needed to "crunch" the numbers.  They didn't have the analytical software necessary, or didn't know how to use it.  Nor did they have the resources to acquire the necessary data  and transform it into meaningful information to support decision-making, even if they knew what data was needed, understood how to develop and implement a formal business plan, and had the human and technological resources to create such a plan.

The PC and Internet revolution have changed all of this forever, particularly in the US where robust Census and other government data is available at very low cost, and there are many value-added competitors offering geodata at lower and lower cost.  Powerful PCs with vast storage and memory cost pennies on the dollar compared to 15 years ago.  Contemporary, wizard-driven and GUI-oriented software design has rendered the complex simple enough so that even novice users can create sophisticated output.  Indeed, the web browser has already become something of a universal platform for distributed computing; and the Internet itself has made it possible for a business planner to collect more data, more reliably, more cheaply and much faster than ever before -- as long as one realizes that non-governmental sources of data to be found on the Internet must be eyed with the greatest degree of scrutiny.

Let's take a look at how "Mom & Pop" stores and other small businesses can take advantage of the new technological opportunities, and in particular, how to establish a GIS-based approach to site planning that costs under $1,000 to implement and use (above the cost of hardware, which may be used for other applications and purposes).

What Is A GIS?

First of all, users need to develop a simple, fundamental understanding of what a GIS consists of.  David Hastings at NOAA (the National Oceanic & Atmospheric Administration) has put together one of the best sites to explore what GIS is all about, and it contains links to many other online resources.  Esri also offers some great resources for beginners at GIS.com, and offers distance learning through its Virtual Campus where many of the introductory level courses are free.  GIS.com is especially good at explaining the different types of data that one might include in a GIS, which we will pointedly address later.  Basically, we are talking about just another information system, but one in which the data are points (like business locations and their associated data or attributes), lines (like streets and highways and their attributes) and polygons/regions (a state, a county, a city, a tract and its attributes)..

Working With A Business Partner, Value-Added Reseller Or Consultant

Working with a local expert who understands your business and what GIS can do for it can often mean the difference between success and failure.  It can save major dollars in the acquisition of software and data, and can prevent the grief of getting in "over your head" in an endeavor for which you have no formal training.  Many consultants will answer basic questions for free, and may provide much more detailed assistance and even geo-processing at no or low cost by e-mail or through User Discussion Support.  At Esri, it's easy to find somewhere nearby who can help via a Partner Solutions Search on the Esri website.  In fact, our first solution described below relies on using an Esri partner to create the shapefiles for use in the free ArcExplorer software, also discussed below.

The Hardware

Chances are that the PC that you acquired to surf the web -- and particularly, the one the kids use for gaming -- has more than enough computing power to support GIS-based site location planning.  Don't be afraid to go with an AMD or Celeron based system which will provide comparable performance to a Pentium.  Look for a "Pentium III" class machine running at 600MHz or higher, and opt for at least 128MB of DDR memory or SDRAM and a 20GB hard drive.  You may wish to upgrade the video capabilities to 4X AGP and 32MB or more of dedicated video RAM -- but as mentioned above, gaming machines will already have upgraded video.  It is not uncommon for such a PC to cost under $500 for an unbranded "white box", and well below $1,000 for a "name brand".

The Software

It is possible to do quite a bit of planning with software like Esri's free ArcExplorer, using basic display and query capabilities to understand the size and demographics of a market area, other businesses and competition in the area, and its underlying street network.  But in order to conduct spatial analyses and calculations, and to allow for the broadest ability to integrate data in many different formats while retaining ease-of-use, we usually suggest Atlas GIS.  When the budget allows and needs dictate, we suggest moving up to the $2,000 level and establishing ArcView as the platform, for the most flexibility in data integration and the most "room to grow". 

Internet-based training and support resources are another boon to the small business user.  For example, there are online User Discussion Forums for peer-to-peer support, a Virtual Campus where beginners can learn about GIS and ArcView at little or no cost, and an Online Support Center (OSC) and Knowledge Base where users can search for answers, insights, tips and tricks.

The Data

When most people think of data to support business planning, they think about demographic information and the Census Bureau.  But there are other sources of demographics, and other types of data to be used.

Users who do purchase Atlas GIS or ArcView as a platform for planning receive a huge data pack with that purchase called the Esri Data & Maps CDs.  These CDs, now a 5 volume set, provide more than 6GB of geodata, including demographics and other data as well as geographic boundary files.

Beyond what ships with the software, and for Arc Explorer implementations, certainly the Census Bureau is the place to start, particularly with the American Factfinder.  Here, under Basic Facts, you can retrieve a data report for your larger area (county or city), and then, under Data Sets,  retrieve a table for the underlying small area geography (blocks, block groups, or tracts) to be used in the GIS.  The geography itself is also available for free download from the Census Bureau, from the Cartographic Boundaries Page.  This is the first step in understanding the size and composition of the potential market area or area(s), and how these relate to the broader geography (city, county, state, region, nation).

The Census Bureau is not the only government data source to be brought to bear on small business planning.  The Bureau of Labor Statistics (BLS) produces the Consumer Expenditures Survey (CEX), which can be used to review overall patterns of consumer expenditures in your city, town or county.  

Third-party data suppliers such as Applied Geographic Solutions and Esri-BIS develop consumer expenditure data for small areas like blocks, block groups and tracts by projecting CEX to market populations based on demographic characteristics.  These vendors also provide demographic estimates and projections based on Census data, which can be especially helpful in bringing the data up-to-date.  These Estimates & Projections are also typically easier to buy and use than raw government data is for small areas, and useful packages of demographic updates for small business use can cost as little as $250.  Increasingly, vendors like RPM Consulting are making demographic estimates even more affordable by pricing them by the single variable -- so that if all you need is a count of households, a count of Latino households, average household income and consumer expenditures for food eaten away from home, you can buy just those data.

Similarly, Esri offers downloadable TIGER-based streetfiles for a County at no cost, and Geographic Data Technology (GDT) sells their enhanced TIGER called Dynamap by the ZIP Code for just $10 or $15 per ZIP.  Both are available on the Geography Network (G.net), a seminal source of geographic data and applications online.  

We believe that the G.net will be of particular importance in the near to mid-term future, because of its ability to deliver the applications that small businesses require as web service -- more on this later.  Other low or no cost sources of data can also be found online at Geocomm (GIS Data Depot) and at Directions Magazine, along with commercial data offerings.

For business location data, planners in even the largest companies often turn first to digital white and yellow pages as a source of data.  With its acquisition of Database America a few years ago, Info USA has firmly established itself as the premier provider of business intelligence on individual business locations (while Dun & Bradstreet is often thought of as the definitive data of this type, there are no individual D&B records for locations in a chain or network, and as such D&B is not that helpful for retail analysis and site location).  For $199 per year, users can obtain the latest version of InfoUSA's Power Business, which includes not only location data but the Standard Industrial Classification (SIC) Code, sales volume, and employee size.  Power Business is a subscription service with quarterly updates and allows the free export of 2,000 listings (already point-geocoded by latitude-longitude) from Power Business into the GIS software.  Users may also purchase additional listings.  Another possibility is that, as with the demographic data, you can also purchase individual listings from vendors like RPM Consulting, often for as little as ten cents per listing (though the cost is sometimes higher and purchase minimums typically apply).  

Alternatively, the lowest cost way to obtain the business location information by category -- albeit without the sales and employee data -- is to use a web resource like Verizon SuperPages Big Book to identify, locate and list out the stores you're interested in.

The Solutions

Now, let's discuss synthesizing the components into specific solutions.  Let's consider the placement of three types of small businesses, and how we might use GIS to choose locations for them:

• Furniture stores

• Mini-mart and Liquor stores

• Live adult entertainment establishments

For the first example, we will use Esri's Arc Explorer as the software; for the second, we'll use Atlas GIS 4.0; and for the third, ArcView 3.2.  The geographic area of study in all 3 cases is the city of San Diego. 

Choosing A Site For A Home Furnishings Store

First of all, a review of the historical data from the CEX confirms that the San Diego MSA is a very good market for home furnishings -- in fact, the average San Diego household spent $2,327 on home furnishings in 1998-1999, higher than any other western MSA except Anchorage, much higher than any other western MSA except San Francisco.  Further, expenditures advanced to $2,419 per household in 1999-2000, a 4% increase.

Since this looks like a fruitful avenue of inquiry, the user may decide to overlay home furnishing store locations over home furnishing expenditures to get an idea of where the sites and potential are.

ArcExplorer is more of a "geo-viewer" rather than a true GIS, with its function generally limited to simple display and query.  So, even though the ArcExplorer is freeware, the store location data was acquired from Big Book over the web at no cost, and the Consumer Expenditure Data at low cost from RPM Consulting, the user still needs a friendly local Esri Partner who can convert this data into the shapefiles necessary for ArcExplorer to display.  In this case, the user might expect to pay anywhere from nothing up to $150 depending on the Esri Partner and area of the US you are in.

The resulting thematic map is decidedly basic and spartan -- a starting point, but a definitive one.  It clearly shows that most of the stores are in areas where home furnishing expenditures are not very high -- because they tend to be in commercial areas, requiring a drive from the residential areas.  This basic map and a little pre-knowledge of the San Diego area tells us that most of the home furnishing stores are in and around a few key areas:

• in central San Diego City stretching eastward towards El Cajon,

• in the I-5 corridor through National City and Chula Vista to the south, and

• to a lesser extent in Kearny Mesa and Mira Mesa in central County

Surprisingly, some of the most attractive communities in the entire US seem to lack access to real concentrations of home furnishing stores.  These areas include La Jolla/Pacific Beach and Del Mar/Solana Beach/Rancho Santa Fe.  Other areas that look like they would survive a first cut of analysis include Point Loma and Rancho Bernardo.  The next step here would be to download some TIGER or GDT streets for target potential areas, and zoom in to these areas to inspect traffic patterns, use Power Business or Big Book to get a sense of other businesses in the area by category and compatibility, etc. 

Choosing A Site For A Mini-Mart Liquor Store

While the above analysis is certainly helpful, and a good investment of a few dollars against a business location investment of tens of thousands or hundreds of thousands of dollars, it is obviously quite limited.  Most critically, we'd like to examine the store locations by performance - sales.  We'd also like a more detailed map, and the ability to conduct some simple spatial queries, such as determining the sales volume within a mile of a current or potential site, how many competitors are present in that one mile area, what the sales are per competitor and how this compares to other areas, etc.  

Stepping up to this level actually requires more of a resource commitment in user time than it does in dollars, though we are increasing the budget to the $1,000 level of investment at this point.  Atlas GIS 4.0 is the software of choice here, and while Atlas is arguably the easiest GIS to learn and use, it still requires an investment of 8-10 hours with the included Atlas tutorial and perhaps a month of applied use to learn - with periodic assistance from Esri tech support and/or from the Business Partner.

In the Atlas GIS example, we have created a more detailed map, with a thematic map of both the expenditures and the store sales.  Also, given the category - liquor sales - we need to make sure that there are no zoning implications or conditional use approval processes.  As far as we know, for the city of San Diego, there are no such implications.

As annotated, the resulting map is actually most helpful in suggesting where NOT to locate a new mini-mart liquor store -- in the yellow rectangle, a central urban core area where many stores are chasing relatively low levels of expenditure, and where the clustering of such stores presents social and civic issues that can lead to re-zoning and modified specific plans, in the municipal parlance.  Again, Point Loma stands out as a potential area for a new store, as does Pacific Beach.  Fashion Valley and Old Town straddling either side of I-8 also look good.  The next step here is to identify some particular site candidates, and query Atlas about how much business and business per competitor is available within a half mile, a mile or two miles.  With the help of a Business Partner, we would also look at drive times -- and walk times, if we are in a central business district.

Choosing A Site For A Live Adult Entertainment Venue

Now, let's consider a site location challenge that would be difficult or impossible to address without a GIS -- siting a live adult entertainment venue.  Sleazy as they may be, these businesses are protected by the 1st Amendment and have a right to exist.  However, "We The People" also have a right and an obligation to keep such venues away from families and kids.  As such, many municipalities have zoning ordinances concerning the location of live adult entertainment or other adult entertainment venues -- keeping them away from residentially-zoned property, schools, licensed day care centers, public parks, trails, community centers, public libraries and churches, etc. as well as other adult entertainment sites.  To check on zoning in your area, look for your City's city planning website, or make a visit in person "over the counter".  In the City of San Diego, Division 18 describes thirteen types of adult entertainment establishments and the required distance between an adult business and churches, public parks, residential zones, social welfare institutions, and other adult businesses. For new businesses started after 1979, the requirement is 1000 feet between exteriors, regardless of type. 

Since the owners of these small businesses typically have deeper pockets, and need to incorporate more data, ArcView will be their GIS platform -- where we can take advantage of ArcView features like spatial joins that allow us to integrate data on-the-fly based on geographic units; and geoprocessing, where we can create and dissolve buffers relating to the 1,000 foot requirement.  Later, we can even add raster underlay, allowing us to place satellite or aerial images beneath our maps for a real-world look at sites. 

Another way in which this particular site location challenge is different is that CEX does not measure consumer expenditures on such lascivious categories as adult entertainment.  As such, we need to get an idea of the demographics that may drive consumption.  It does not require an advanced degree to quickly realize that we are looking for the concentrated presence of men, particularly young men.  San Diego is still a Navy town, and this means that areas convenient to the military are prime locations.  Secondarily, we might expect to find potential locations near colleges and universities.

The map above shows that live adult entertainment and the military do indeed go hand in hand, particularly in clusters around Kearny Mesa, the Gaslamp District and Old Town (proceeding clockwise from the top).  Now, let's turn on the College locations.

With only a couple of exceptions, the live adult entertainment spots strongly tend to be in the immediate vicinity (less than a mile away) of either colleges or military bases.  Now, let's use some demographic data, namely the density of resident male population aged 18-44.

Now, with the exception of one club in La Jolla, ALL of the live adult entertainment venues are near military sites, and/or colleges, and/or areas of relatively dense male 18-44 population.  Further, there are some obvious areas of potential with a confluence of resident population, and military and college presence, where there are no venues.  And there are a number of opportunities to go "head to head" with competitors in current areas of concentration, while respecting the 1,000 foot buffer..

Finally, an analytical by-product is that, by adding in school locations alone, we have appeared to catch three live adult entertainment operators in illegal locations (unless they were "grandfathered" in).  That club in La Jolla is the Taxxi Nightclub, and it is in an illegal location within 1,000 feet of a school.  So is Pal Joey's on Waring Road, and Club Max on Hazard Center Drive.

Conclusion: Tomorrow's Solutions

Even today, small business owners can tap into a number of commercial websites offering demographic site reports and maps of a specified location.  Such web services are a new way to "rent" software, and in the future will offer a way of providing complete solution kits with data, distance learning and knowledge base capabilities.  Web services are currently receiving the same level of hype as the Web itself did in the mid to late 1990's, but there is precious little to show at this time beyond the rudimentary "demographic reporters" -- nothing, in other words, that can support even the most basic type of analysis presented here in the ArcExplorer environment .  Watch developments on the G.net in particular as web services come of age over the next couple of years.

Readers should note that this paper is intended to be a preliminary exploration of the ability to use GIS in a small retail environment.  It is by no means suggested as an exhaustive approach to business planning or site location or the application of GIS to same.  Finally, we have not addressed the availability and application of other available specialized data in the public domain, including environmental, climatological, and financial data among other types. 

What I hope we have done is to present a plain-English explanation of how an entrepreneur with no prior knowledge can educate themselves about what GIS is, how to use it to integrate data and where the data sources are, and how to apply it in both simple and more complex ways to uncover business potential and plan a site location.

Steve Lackow, Partner

RPM Consulting

http://rpmconsulting.com