Starting or expanding a business is a resource-demanding endeavor that often requires significant research on behalf of an entrepreneur. While most large, established businesses have entire teams devoted to market research, an individual looking to start a company or a small business looking to expand likely will not. Getting answers to a few basic questions about licensing requirements, industry need, and competitor locations could be the difference between success and eventual failure. Some of these basic research questions include:
- What are the available small business licenses issued by the city of New York?
- Where do NYC businesses with a particular license type tend to cluster?
- Are there any boroughs, neighborhoods, or zip codes with a surplus or dearth of a certain type of business?
- What type(s) of licenses does Business X have? What are similar businesses and where are they?
This project was inspired by story about an old Wendy’s expansion tactic. For many years, Wendy’s got free information about where to place its franchises by simply keeping track of existing, thriving McDonald’s locations. They would observe the success of a McDonald’s location and then place their own restaurants within a block or two of those McDonald’s restaurants. (Wendy’s, among other companies, has since evolved to use not only geolocation data about their competitors but also more high-tech GIS data about foot traffic to decide on new franchise placement. See this article for more detail.)
In general, having geolocation data on businesses similar to the one an entrepreneur cares about can be fruitful in two ways: 1) It can help identify areas of potential need for a certain business type, or 2) It can reveal areas that have responded well to a certain type of business. Depending on the level of risk an entrepreneur is willing to take – along with additional information about commercial real estate prices, demographics, etcetera – this data can help someone make a decision about where to open their new or next endeavor.
My Shiny App, available here, aims to be a tool used to answer the preliminary business licensing questions posed above. It should be considered as a first step of many in doing research into opening or expanding a small business. In the app, a user can opt to explore information about a single license category or to compare two license categories; the user can focus his or her search on a specific neighborhood or zip code, while getting summary information across boroughs. Lastly, small informational blurbs about specific existing businesses can be accessed by clicking on the geolocation markers in the interactive map.
The data used for this project comes from the Legally Operating Businesses dataset on NYC Open Data. The data set included information on roughly 42,000 New York City business licenses across 17 variables*; this project focuses on the following eight variables in order to gain insights:
- Name: the name of the business holding the license
- Industry: the license category as defined by the city of New York
- Post code: the zip code of the business location
- Longitude: the longitude of the business location
- Latitude: the latitude of the business location
- Borough: the NYC borough in which the business is located
- Neighborhood Tabulation Area (NTA): the NYC neighborhood in which the business is located
- Detail: location/business specs. For example, a business with an Amusement Arcade/Device license may have the names of its amusement devices listed (“Festival Wheel” or “Carousel”); a business with a Cabaret license** may include the capacity of its largest room.
Special Sale Opportunities in Queens
As defined by the New York City Department of Consumer Affairs: A Special Sale License is required for any business that will have a public sale or offer merchandise for sale in connection with a declared purpose (such as a going out of business, liquidation, loss of lease, or renovation sale, or a sale due to fire, smoke, or water damage).
Selecting the ‘Single License Exploration’ option the ‘Special Sale’ license option within my Shiny App yields the following geolocation data and graphical count summary:
Despite being the more residential boroughs, the Bronx, Brooklyn, Queens, and Staten Island have very few (or zero!) places that can legally have sales falling under the banner of the Special Sales license. If I were looking to open a business, I might consider a business that would pick up items from other businesses or residences looking to quickly sell merchandise and sell those items from a permanent location in Queens. By clicking on the map markers in the app, I can see the existing businesses with Special Sales licenses and do further research on their business models and locations. (I would also be advised to do further research on, say, commercial real estate prices and/or demographics in Queens.)
Sidewalk Cafes to Feed Hungry Tourists
While New York City as a whole has over 1300 sidewalk cafes (1323 to be exact!), there manage to be a few blocks that could use more. As one of the most famed metropolitan areas in the world, New York City has a booming tourist industry with no less than eight sightseeing bus companies. Since sidewalk cafes provide both food and the ability to take in the City, they would be well-placed to be near to the sightseeing bus companies. Upon investigation under the ‘License Comparison’ choice in my Shiny App, we can see that there are a few companies with Sightseeing Bus licenses (in orange) lacking nearby sidewalk cafes (in blue).
These sidewalk cafe-lacking Sightseeing Bus companies are Experience the Ride NY, Go NewYork Tours, Skyline Tours, and Taxi Tours, located in the neighborhoods Hudson Yards-Chelsea-Flatiron-Union, Murray Hill-Kips Bay, Midtown, and Midtown South, respectively. If I were looking to establish a second or third location for an existing sidewalk cafe, I would focus future energy into researching locations in these neighborhoods and, specifically, near these buses.
Starting or expanding a business is a big decision, but taking it in small steps can alleviate some of the stress. Getting answers to even basic questions about licensing and locations of similar businesses can lead an entrepreneur see business opportunities, and these answers can be obtained through interactive visualizations rather than by combing through a spreadsheet or multiple websites.
To interact with my app and find insights of your own interest, click here.
*Full variable list: License Number, License Type, License Expiration Date, Category, Name, Name2, Building Number, Street, Secondary Street, City, State, Post code, Contact Phone, Detail, Longitude, Latitude, Borough, Community Board, Census Tract, Council District, NTA, BBL, BIN, Industry (reduced version of Category)
**Interestingly enough, any establishment that serves food and drink and that allows dancing must have a Cabaret license!
The post Uncovering Business Opportunities with License Geolocation Data appeared first on NYC Data Science Academy Blog.