The Challenge
The Department of Employment and Workplace Relations (DEWR) is a dynamic, innovative and customer-focused organisation that contributes to strong employment growth, increased workforce participation and the improved productive performance of enterprises in Australia. The organization also runs a funding scheme aimed at providing financing to applicants who wish to own their own business.
In early 2005, DEWR received a business plan and funding request from a client who needed financing to buy a franchise from a major fitness franchise.
The generic business plan provided detail on how the client intended to run the franchise, where the client wished to locate the studio, the demographics of the customers being targeted and projections for the first three years of operation.
Given the substantial nature of the funding request, DEWR were anxious to more accurately estimate the likely success of the franchise in the chosen location, based on the local demographic and the success rates of franchises located in similar locations.
The Solution
DEWR approached Silver Stream Solutions based on our combined marketing and technology experience to undertake a location Intelligence study of the area using the following data:
- The Australian Bureau of Statistics demographics for the franchise area
- The ABS demographic statistics for other franchise areas
- The turnover of other franchises compared to the projections of the proposed franchise.
Using the Mapinfo GIS software we were able to examine in detail the co-relation between the information sets above to predict with accuracy the likely success of the franchise.
Our study provided accurate/easy to use information on the following:
- The most profitable location within the franchise area to locate a studio
- The revenue in years 1 -3 that the new franchise could expect to turnover in the first three years from people within the franchise area
- The revenue in years 1 – 1 that the franchise could expect from all areas within 10km of the studio
- The revenue that the studio could expect from all areas within an 8 minute drive of the studio
The Result
Using the findings of our study DEWR was able to more accurately assess the risk of funding this venture. The visual nature of the maps provided made for easy decision making. The cost of the study was minimal when compared with the risk involved in investing in the project without the information provided by location intelligence. The overall outcome of the study was that it provided the necessary information to DEWR and led them to provide financing to the franchisee.
Would you like to discuss how location intelligence and GIS mapping can help your organisation make better decisions? Contact us today on +61 3 8617 8160 or click here and we'll contact you. | 
