Home Restaurant Free Restaurant Business Strategy Questionnaire 4.4 Estimated Households by Income Class Questionnaire
Why do we need an Households by Income Class Analysis in a business plan for A Touch of Tuscany
As a business you cannot sell your goods or services if the local market in Westchester County does not have he financial ability to buy what you are selling! Thus it is fairly obvious that in order for consumers in Westchester County to buy goods and services they first need to have substantial amount of income coming into their households. In order to understand just how many folks in Westchester County have the income demographics that you need your consumers to have you must conduct an analysis of this type.
The benefits of understanding income distribution in Westchester County
The classes that we have created to measure the income distribution of the Westchester County target market range from less than ten thousand dollars of income to more than two hundred thousand. The purpose of course is to distribute all the income into its appropriate income category for Westchester County . Once done, we now have created a table that shows the percentage of income distribution which will total 100% for all the income classes. From there we can now get a very clear understanding of just how much folks in Westchester County are earning and how many of them are earning the income that you need your clientele to have. This becomes the basis for your pricing and marketing strategy for A Touch of Tuscany
We have used the following classifications to break down the Households of the target market of Westchester County by income class:
Positioning and Pricing for A Touch of Tuscany
If you are a business owner that is looking to position and pitch your goods or services to the higher end of your target market and you find that most of your clients earn a middle income, you will have a a tough time generating a high volume of sales. You will have to understand that your sales turnover will be slow and you must price yourself accordingly. On the oher hand if you are looking to sell very low cost goods or services and most of your target market is affluent, you will have just an equally tough time since the buying patterns of the affluent are different from those in the middle income. A great measure of how to pitch yourself as a business, marketing to consumers is to look at which big box retailers have a presence in your target market. For example, if you only see high end shops and boutiques in the target market you an safely conclude after looking at the income distribution table that your target market is affluent and you will need to offer goods and services accordingly.
Do Income Classes change?
The answer is yes - but very slowly. For any target market to go through a transformation where the income distribution has changed rapidly, it usually indicates that the local economy was very dependent on one industry or employer and that employer decided to shut shop and move on. Sometimes a new large employer coming into a small target market can also have the impact of increasing the income distribution, but these instances are rare. One of the reasons that companies relocate from high cost areas like the New York Metropolitan area to relatively low cost areas is that they are looking to save costs by reducing their compensation burden by moving to lower cost and income areas.
What is the definition of household in the households by income class table that we have for A Touch of Tuscany?
A household as defined by us in our tables, includes all the people who occupy any particular housing unit being sampled in Westchester County, New York. A housing unit is a house, an apartment, a mobile home, a group of rooms, or a single room that is occupied (or if vacant is intended for occupancy) as separate living quarters in Westchester County. Separate living quarters are those in which the occupants live separately from any other people in the building and which have direct access from the outside of the building from any other building or through a common hall. The occupants may be a single family, one person living alone, two or more families living together, or any other group of related or unrelated people who share living arrangements.
What about the income number in the households by income section of the business plan for Full Service Restaurant? What does that mean?
The data on income in our table of households by income class for the A Touch of Tuscany business plan is the the total income reported separately for wage or salary income; net self-employment income; interest, dividends, or net rental or royalty income or income from estates and trusts; Social Security or railroad retirement income; Supplemental Security Income (SSI); public assistance or welfare payments; retirement, survivor, or disability pensions; and all other income.
Receipts from the following sources are not included as income: capital gains, money received from the sale of the property (unless the recipient was
engaged in the business of selling such property); the value of income 'in kind' from food stamps; public housing subsidies, medical care, employer contributions for individuals, etc.; withdrawal of bank deposits; money borrowed; tax refunds; exchange of money between relatives living in he same household; gifts and lump-sum inheritances; insurance payments, and other types of lump-sum receipts.
When we consider the income for households in Westchester County, New York, we include the income of the householder and all other
individuals 15 years old and over in the household, whether they are related to the householder or not. Because many households consist of only one person, average household income is usually less than average family income in Westchester County. Income from households does not include amounts received by individuals who were members of the household during all or part of the past 12 months if these individuals no longer resided in the household at the time of the survey being conducted.
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