State-Metro Industry Market Reports

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Contents
P1: Industry Population, Time Series
P2: Failure Rates
P3: Industry Market Volume, Average Company Sales
P4: Company Sales Class Trends
P5: Market Share by Sales Class, Average Annual Company Sales by Class
P6: Market Share by Segment, Sales Per Employee
P7: Facility Employment Class Trends, Average Employment Trends
P8: Entrepreneurial Activity, New Branch Development, Sales-Employment Growth Indices
P9: Industry Concentrations, Consolidation Trends, Emerging Vitality Chart
P10: About the Data

NOTES ON US MARKET RESEARCH REPORT TERMS

This series offers report content at the metro area and state levels industry level for over 16,000 lines of business. Content is specific to the customer-selected industry and area, except where otherwise specified.

Time Series:
The report analyzes trends in three running years, each for the twelve months (real time) specified in the Time Series table in the report (and sample). Content is adjusted to account for time lags in raw data; the dates shown generally reflect the actual time series shown in the Time Series table.

Current Industry Population:

Establishments: Firms plus Branch operations.

Firms: Independent companies.

Small Businesses: In order to focus the analysis on the small businesses of greatest interest to our users, the analysis defines small businesses as single site firms with fewer than 25 employees. All small businesses are also “firms”.

Startups: In order to reduce distortion and focus the analysis on the startup population of greatest interest to our users, the startup sales and employment analysis limits the definition of startups to single site firms with fewer than 50 employees, with less than $10m annual sales and reporting one year or less of operation. All Startups are also “firms”; The overwhelming majority are also “small businesses”.

Branches: Subsidiary facilities of firms; non-headquarters operations.

Failure Rates:
Failure rates track the actual experience of business establishments, firms, small businesses, startups and branches doing business at the start of the time series, and still in operation at its end-point. "Survivors" are business operations within a given category which have maintained operations for at least three years. Throughout the report, Survivor measures isolate and report on these ongoing firms in addition to snapshots of the entire industry and various other segments. As a result, these Survivor benchmarks display experience-rated measures, rather than snapshots of the industry at a particular point in time.

Firms which have experienced a transfer in ownership but continue as independent firms are considered "survivors". Firms which relocate but maintain independent operations are considered survivors if they do not move out of the jurisdiction being analyzed. Firms which are purchased or merge and become subsidiary locations, or whose location is terminated, are grouped with the "failures". Any business entity which does not evidence ongoing operations (for example, by registering with government agencies or credit reporting services) is considered to have ceased viable operations and is classified with the "failures".

The Failure rate analysis is developed for discrete business segments by segregating the original pool of tracked firms by industry classification, location, and population segment (all firms, small businesses, startups etc.) That beginning universe is segregated and tracked to develop the failure rate for that group. As a result, failure rates occasionally reflect performance above 100% or below 0% due to business migration among industries (changes in primary business line) or (in the case of location-specific failure rates) due to business relocations during the analysis period. In general, this anomaly is found only in highly granular industry segments or very small local jurisdictions.

Industry Market Volume:
Reported Annual Market Volume includes industry sales figures from multi-site firms classified in the selected industry, generally including branch revenues. The Market Volume figures include sales of US firms and US-reporting subsidiaries of firms headquartered outside the US. The volume figures are for the industry (firms identifying this as their primary classification) not the product or service. As an example, a report for retail furniture stores analyzes sales of stores whose predominant revenue stream is furniture sales; That data would not include furniture sold at a general department store, for example. Consequently, more detailed industry segments may underreport volume due to the choice of companies to identify a higher level “parent classification” as their primary line of business.

Generated Annual Market Volume projects sales volume based on the number of local industry employees and national sales per employee data developed by BizMiner. This number includes headquarters operations inside the area, as well as branches of any industry firms located within the selected area. It excludes branch operations located outside the area. The Generated Market Volume figure is an indicator of the actual sales of an industry transacted within the selected area.

Average Annual Sales:
The Average Annual Sales table displays “snapshot” average dollar sales for industry firms, small businesses and startups in each of the three years in the time series. The Change rows express the growth or decline of these snapshots in percentage terms. Sales will often fluctuate most radically in the startup category (both snapshot and survivor), in part because startup operations are less numerous and differ dramatically in size, growth and, in many cases, failure. The Survivor Avg. Sales data row tracks the same set of firms in each category from the beginning of the time series through the end. In this case, only those firms which maintained operations through the three years are analyzed as Survivors; New entries and those which ceased operations in the interim are not included. These Survivor sales reflect an experience-rated analysis which can be used to help inform future projections. While there is significant overlap of firms in each category between years, results can be affected by business failures, mergers and the migration of companies between the three categories. Migration between business classifications has a much lesser impact in most cases.

Company Sales Class Trends:
This large table classifies the number of industry firms which fall into each of a dozen sales classes. Data is displayed as the number of firms in each of the three years of the time series. The fourth column displays the distribution of Survivor firms (only those tracked from Yr1 and still in operation) through the same sales classes. Each of the final four columns corresponds to the first four by year, and displays the distribution as a percentage of all firms for that year and, in the case of Yr3 Survivors, among all Survivor firms. Firms which do not report sales are noted in the unknown row, while the final row sums the total number of firms in the industry in each of the years and for the survivor category. The analysis in the Company Sales Class Trends table is deepened by reading it in conjunction with the Market Share by Sales Class and Average Annual Company Sales by Class tables on the following page.

Market Share by Sales Class:
This table displays the total reported dollar sales volume (market share) captured by firms in each of twelve sales categories in each of the three years of the time series, plus a fourth column showing Survivor sales (explained on the previous page). The percentage of total sales is displayed in the four corresponding columns on the right. Projected sales for non-reporting firms are displayed in the "unknown" cells.

Average Annual Company Sales by Class:
This table displays the average firm sales within each industry sales class, indicating a benchmark within that peer group. The average sales figure is derived by dividing the total market share within each sales class by the number of firms in the class. Reported sales are utilized, capturing revenue from all headquarters and branch operations of multi-site firms.

Market Share by Segment:
The share of total industry market volume captured by each category of firms is displayed as a percentage for each year of the time series. Naturally, the (all) Firms category captures 100% of the snapshot sales in each year. The Small Business and Startup shares of total market volume is displayed. For each category, a separate calculation has been performed to report the share of market volume held by “Survivors” in each category. Note that Survivor small businesses may not remain in the small business segment by the end of the time series shown here; and that startup survivors have by definition superseded the startup parameter of “one year or less of operation” by the end of the time series.

Sales per Employee:
A common indicator of productivity, Sales per Employee data is presented for the Industry (all firms), and the Small Business and Startup sectors within it. Sales per employee measures are displayed for each of the three years in the time series, as well as for Survivor firms in each industry category. As is the case for average sales calculations, sales per employee will often fluctuate most radically in the startup category (both snapshot and survivor), in part because startup operations are relatively few in number and differ dramatically in size, growth and failure rates.

Facility Employment Class:
Using the same general format as the previous Sales Class Trends table, the Facility Employment Class analysis displays the distribution of industry establishments (not just firms, and including branches) among ten employment size categories. An eleventh data point reports the number of industry establishments which do not identify employment data. In the second set of rows in the table, the row labels are repeated and table cells display the percentage of establishments in each year – and for Survivors – which are distributed among the same employment categories. This analysis method makes it possible to observe significant shifts in employment, toward larger or smaller operations – in a more granular way than average employment data alone (below) can indicate. In this regard, survivor percentage changes between employment categories may be especially noteworthy.

Average Employment Trends:
Presented as a more traditional method of measuring industry employment trends, this table displays average establishment employment in the Industry (by establishment, not firms), as well as for Small Business, Startup and Branch categories. Survivor average employment in each category offers a window on employment projections over similar time series. Total reported employment can be ascertained by multiplying average employment data by the number of total establishments taken from the Industry Population table on P1 of the report.

Entrepreneurial Activity:
The Area Segment Startup Rate measures the percentage of local industry firms which indicated one year or less of operation during the one–year period reflected by the Time Series table and which maintained operation through the end of the time series. These startup firms are compared to the number of local firms in the industry for which ages can be identified to create the Segment Startup Rate. This is then compared to the US Segment Startup Rate, the national industry-specific startup percentage. The Area Segment Startup Index benchmarks the local industry rate against national industry startup patterns, expressed as a two-digit decimal where the US industry rate equals 1.00; An Index of 1.10 indicates a local rate 10% above the national average.

New Branch Development:
The Area Segment New Branch Rate measures the number of new local industry branches developed in the final year of the time series and which maintained operation through the end of the time series. These are compared to the total number of newly developed branches in the industry nationally over the same time period: the US Segment New Branch Rate. The Area Segment New Branch Index benchmarks the local industry rate against national industry new branch development patterns, expressed as a two-digit decimal where the US all-industry rate equals 1.00; An Index of 1.10 indicates a local industry rate 10% above the national average.

Sales Growth Index and Employment Growth Index:
The Sales Growth Index compares the change in total local sales over the time series reflected by the report. The local industry specific growth rate is displayed, followed by a two-decimal index benchmarking the local industry against national industry growth percentages. The US Index equals 1.00 in all cases, so an Index of 1.10 indicates an industry growth rate 10% above the national industry average. Similarly, the Employment Growth Index compares the change in total local employment over the time series displayed in the report. Again, the local industry specific growth rate is displayed, followed by a two-decimal index benchmarking the industry against national industry growth percentages.

Industry Concentrations:
The Establishment Concentration compares the number of local industry operating establishments to the national industry overall for each of three years. The Employment Concentration is a comparably analyzed, displaying local reported industry employment to national industry data. The Reported Sales Concentration shows the local industry percentage of US industry sales. (Reported Sales data attributes all company sales to the location of headquarters operations.) In each case, the three year trend indicates the increasing or decreasing importance of the industry for the economic metric under review.

Consolidation Trends:
The Consolidation Trends table displays three years of local industry data reflecting the percentage of branch operations to all establishments (Area Branch Concentration), and compares that to three years of national data reflecting national industry branch operation percentages (US Industry Branch Concentration). Taken together, the two measures indicate increasing or decreasing trends toward industry consolidation, either as a stand-alone metric or benchmarked against economy-wide patterns.

 

ABOUT THE DATA

Raw data analyzed for BizMiner reports is sourced from an array of the nation's private business databases, reporting agencies and government statistical sources, including the Internal Revenue Service, Bureau of Labor Statistics, and the Economic Census of available sectors. None of these raw data sources creates the final measures reflected in BizMiner industry profiles. In total, BizMiner accesses over half a billion sourced data points from eighteen million business operations for each of its twice annual updates. Census and other government data are used incidentally to inform and test projections for non-reporting firms.

At the same time, some firms are missed and specific information on others is lacking from the database. However, the overall current coverage of the databases approaches 12 million business operations annually. While 100% firm coverage is desirable for analysis purposes, the greatest value of the content rests in discerning patterns of activity, which are reflected in the large samples used to develop our reports. As is the case with any databases this large, some errors are inevitable. No representation is made as to the accuracy of the databases utilized or the results of subsequent analyses.

Sales volume figures are for firms identifying this as their primary classification. For example, a report for retail furniture stores analyzes sales of stores whose predominant revenue stream is furniture sales; that data would not include furniture sold at a general department store. Firms in more detailed industry segments may opt to identify a higher level parent classification as their primary line of business, effectively reducing sales applied to the detailed segment.

It is sometimes difficult to ascertain precise sales data for the smallest firms in the databases. When precise numbers are not available, reports that offer a sales range may be utilized. When there is a very small number of firms in a category (most often startups, which are by nature often micro-firms) the sales is recorded at 150,000 (reflecting a 100,000-175,000 range).

Survival and sales analysis of independent business operations are based on information supplied largely by business owners and representatives to private reporting services. Inaccurate information supplied by business owners or representatives may affect the analysis. Survival rates assume that the discontinuation of a facility's presence among credit reporting databases utilized reflects the discontinuation of operations of that facility. Where insufficient data is available to create specific line items in specific industry reports, projections developed through proprietary algorithms, including projections from broader industry data, may be utilized.

The Time Series: Our Profiles are adjusted to account for time lags in raw data. We adjust the time series to compensate, and the dates shown in the reports generally reflect the actual time series shown in each Profile. Neither the Brandow Company nor its resellers are responsible for conclusions drawn or decisions made based upon this data or analysis. In no event will the Brandow Company or its resellers be liable for any damages, direct, indirect, incidental or consequential resulting from the use of the information contained in BizMiner reports.

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