How businesses use federal census data to make decisions
Not too long ago, a doctor phoned Ana-Maria Garcia with an interest in setting up pediatric services for children living in a certain area. A data dissemination specialist with the U.S. Census Bureau, Garcia helped him find data about rates of health insurance coverage and the number of young children in the area.
Garcia found that if the doctor was willing to move his business to another location, the possibility of having more clients was greater.
This is one of many examples in which census data can be useful to a business owner in deciding where to open or expand.
Garcia points to a tool called the Census Business Builder as one that is “very, very helpful.” It has two editions: The Small Business Edition is for small business owners who need data to understand their potential market, while the Regional Analyst Edition is “primarily for chambers of commerce and regional planning staff who need a broad portrait of the people and businesses in their area.”
Let’s say you want to open a breakfast restaurant. The tool could show you that the highest consumer spending on breakfast in southeastern Connecticut is in Census Tract 7053, which includes the Stonington side of Mystic and Masons Island.
According to the Census Bureau, the average size of a census tract is about 4,000 people.
Using the Census Business Builder, you could also view consumer expenditures on beer consumed away from home, footwear, pet food, lawn and garden services, utilities, gasoline, airfare and more. The tool can also show the population in a certain age range by tract, ZIP code, city or
town, county or state.
The Census Business Builder includes the American Community Survey data released every year; this is a sample, whereas the census completed every 10 years aims for a complete count of the U.S. population.
The decennial census helps distribute $675 billion in federal funds each year, and Garcia said it may be useful for businesses to see where the money is going. An example she offered is that a construction company might want to know where money is going for road and bridge construction.
Providing useful information
At the Southeastern Connecticut Enterprise Region, or seCTer, Executive Director Nancy Cowser said her staff uses census data daily. She noted that the ability to identify low-income pockets through census data is useful for grant-writing and for programs such as Opportunity Zones.
Cowser declined to share specific stories of businesses using census data, saying a lot of that is confidential. But as a hypothetical example, she said that perhaps you want to open an “old-school American meat and potatoes restaurant” but you want to do so in an area known for its outdoorsy, vegan population.
“That restaurant’s going to fail,” she said, adding, “You’re either going to have to change the menu or downsize your expectations of revenue or locate it somewhere else.”
Cowser said there are pockets for just about everything in southeastern Connecticut and the area can’t be painted with a broad brush, so it wouldn’t be fair for a developer to compare all of southeastern Connecticut to Fairfield County, for example.
As another example of how census data might be used, Connecticut Business and Industry Association economic adviser Pete Gioia said someone opening or relocating a pharmacy would want to look at an area’s population growth among people over 50.
He said CBIA has occasionally used census data for its health insurance business, to identify how many businesses Connecticut has with fewer than 10 employees.
Gioia said a jewelry store owner looking to expand would want to know where people have disposable income, while a coffee shop relying on commuter traffic would want to know the working-age population. He also pointed to supermarkets.
Stop & Shop spokesperson Maura O’Brien said in an email, “Stop & Shop utilizes Census data in real estate planning and site locations. We occasionally use Census data to help us understand trends in the markets we serve to understand population growth or decline.”
Fran Pastore, CEO of the Women’s Business Developmental Council, said WBDC used census data in deciding to open a WBDC office in New London 18 months ago.
“I wanted to know: Are women starting businesses?
What kind of businesses? What’s the socioeconomic profile of these women?” she said.
Pastore said some clients who come to WBDC are so excited about what they do that they haven’t taken the time to look at market research, which she called a “way of mitigating the risks to starting or scaling up.”
Of course, there are other sources of data outside the Census Bureau that are useful to businesses, and one’s needs may depend on the granularity of the data they seek.
Mark Hill, chief operating officer of the Eastern Connecticut Workforce Investment Board, said EWIB doesn’t use census data much but relies on month-to-month data from the Bureau of Labor Statistics, a division of the U.S. Department of Labor.
He sees census data as being more important for the community planning side, looking at housing and public transportation.
Chamber of Commerce of Eastern Connecticut President Tony Sheridan said census data might be useful for someone opening a law office to know how many attorneys are in the area, or for someone opening an Asian market to know how many Asian people are in the region, or for Electric Boat as it ramps up hiring. An EB spokesperson declined to comment for this story.
Sheridan said the chamber uses census data when it’s making reports and when people call to say they’re thinking about opening a business in eastern Connecticut.