Home Electrical Contractor Free Electrical Contractor Business Strategy Questionnaire 4.26 Market Value of Owned Home by Income Nationally Analysis Questionnaire
What is the benefit of having an Market Value of Owned Home by Income Analysis in a business plan for a Electrical Contractor?
This market value of owned home by Income analysis gives the reader of the business plan as well as a small business owner like Andy Powell a very clear idea as to the distribution of the housing stock nationally when accounting for the income of the homeownes. This analysis is critical since it gives the most direct information to busines owners about the income demographics of their potential customers. While the market value of owned home by income actually covers the spending done by consumers in various income categories at a national level, the results can most certainly be extrapolated to any local target market like Cuyahoga.
In order to conduct the market value of owned home by Income category analysis we have categorized the annual income into the following 5 categories:
What if most of my business comes from folks who are in the lowest 20% Income Quintile?
In the event your analysis shows that most of your clients are folks whose homes market values happen to be in the lowest 20% income quintile, then you are going to have to concentrate your marketing efforts on making sure that your message gets out to this particular market demographic. It is very important that you understand and appreciate that even though you may be looking to add new customers from different income brackets, your core customers should always be that demographic that is giving you the most business.
A simple example of this principle would be the contrast between a check cashing service and wealth management services. A check cashing business owner may want and wish that his clientele include up market middle class and higher income customers whose checks will probably be of much larger dollar value, but the stark reality of the check cashing business is that it tends to have customers who have income brackets that are not very high. On the other hand, if you are offering high end wealth management services then your target market will automatically have to be folks who have substantial savings and income that they need managed for them. Even if your services are equally needed by folks in the lower income brackets, your practice and business cannot sustain that target market and you will have to go after the target market that canactually provide you with the wealth that makes your own business profitable.
Of course once you have established a successful wealth management business, you may consider doing some pro bono work with many smaller non-for-profit institutions to assist lower income folks with their money management problems as well but it would be unrealistic for you to be able to build a book of business in wealth management having customers who don't have much wealth to manage!
What if the amount of spending done by my target demographic market has been changing over time?
One of the reasons that we insist that the market value of owned home by Income analysis cover a period of at least 10 years is that it gives the reader of the business plan as well as business owners like Andy Powell a very good idea of what the patterns used to be 10 years ago and what they are today. Thus for example, if our analysis were to show the folks in the highest 20% of income used to have the highest home values and more recently they are not - it indicates that these home owners are certainly not feeling as wealthy as they used to. As a business marketing to folks in this income category, changes may have to be made to the marketing and advertising strategy to ensure that a steady stream of business can be obtained. A small business that does kitchen cabinetry may have to offer slightly cheaper re-modification alternatives to the clientele instead of the traditional high end options. Lower down payments and installment payment options may also be considered.
This analysis has significant implications for many businesses - restaurants based in neighborhoods with high income populations where home prices have ebbed may have to in turn change their offerings and offer more affordable alternatives. High end Retail establishments may also consider keeping some mid-range and affordably priced merchandise to go along with their high end items.
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