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Report, Page 2
Jointly these variables account for the following percentage of the variance in volume-of-business for the type of business you selected. 95 %
These variables and their associated weights were entered into a prediction formula. The purpose of this exercise was to determine the volume-of-business that is expected given the demographics of the county you chose. This expected value was then compared with the actual value for the most recent year. The expected and actual values and the ratio of expected/actual volume-of-business is:
Expected: 1483 Actual: 1340 Ratio: 1.11
If the expected value is higher than the actual value, the above ratio will be greater than 1.00 . In this case, the demographics are encouraging. The market for your kind of business in this specific county is said to be “under-developed” (in regard to demographics). That is, the residents of this county are spending less than what would be expected given their demographic profile. This condition presents a favorable business environment for start-ups and for established businesses considering either a relocation or expansion.
Conversely, if the expected value is equal to or less than the actual value, the ratio will be equal to or less than 1.00. The county residents are already spending as much or more on your type of business than would be expected, given the demographics of the county. In this case, the market is said to be “developed” or even “over-developed.” Such markets are relatively hard to penetrate, unless of course, you have some way to set your business apart, taking market share away from established competitors.
Based on the difference between expected and actual volume-of-business, and the ratio given above: This appears to be a market that is slightly underdeveloped. You should be able to capture some market share without being overly competitive.
Our rating of the potential for your type of business in the county you have indicated is: 6 -- Above Average
This is on a scale of 1 (low) to 9 (high).
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