Opening a restaurant in Portland, Or
Will M
Outline
-The Problem
-The Data
-The Methodology and Exploratory Data Analysis
-Conclusion and Discussion
-Introduction
Introduction
Opening a new restaurant can be a risky endeavor.
There are many factors to consider when choosing location and type. Some of these factors include:
- Demographics - What is the population of the area? What is the average income area?
- Expected Growth - What area is expected to see an increase in housing?
- Population preferences - What kinds of food are popular in a city?
- Competition - How many restaurants are in a given vicinity that could reduce business
- Attractions - How many venues in a vicinity that could have a positive impact on business
The Problem:
Jeff represents an investment firm who is looking to break into the restaurant market in Portland.
Jeff’s firm does not know what kind of restaurant to open, nor do they know much about the city’s layout.
Jeff’s firm wants to know what type of food will work and which neighborhood is the best neighborhood.
Questions to answer:
1. What kind of restaurant should the firm open
2. Which neighborhood should the firm open in.
The Data
1. Geo-spatial Data
For choropleth maps
by Neighborhood
2. Demographic Data
Neighborhood Population, Walk Score,
Median House Hold Income.
Geo-Coordinates
3. Building Permit Data
The data used to produce a solution includes:
4. Foursquare Venue Data
For determining expected growth
for each neighborhood
To determine popular tastes,
competition, attractions
(2016-2019)
Exploring the Data (geography)
The Neighborhoods of Portland, Oregon
There are around 95 neighborhoods of various shapes and sizes considered in this study.
Exploring the Data (demographic)
Population Density in Portland, by Neighborhood
The population is most dense in the city center. However other parts where there are large parks also have elevated densities.
Excluding Parks, and other non-inhabitable space
Exploring the Data (demographic)
Median House Hold Income by Neighborhood
The wealthiest neighborhoods tend to be located on the west side of the city
Exploring the Data (permits)
Expected growth in housing (2016-2019) , Number of New Units
The expected growth in new residential units is highest in the North Western part of the city center
Methodology
Using foursquare data to determine the most popular type of restaurants in Portland
In order to compile a list of restaurants for each neighborhood, 5 Geo-coordinates were used: the neighborhood center, and +/- .01 to each coordinate in each direction. Duplicates were dropped after their first occurrence. This produce a robust list of restaurants with in walking distance for a given neighborhood.
Center
What types of food are popular in Portland?
Using the foursquare data, the frequency for each type of restaurant was calculated and ranked for each neighborhood.
*'Food Trucks were excluded
What types of food are popular in Portland?
Based on both the previous visual and this visual, Pizza Places and Mexican Restaurants are the most popular types of food in Portland.
What neighborhood in Portland would be the best to open a Mexican Restaurant or Pizza Place?
In order to consider contributing factors, more data from foursquare was required.
Contributing factors considered
Weights assigned
Methodology
were number of:
Arts and Entertainment Venues
Hotels
Universities
High Schools
Night Life Spots
Office Building
25
100
100
50
75
50
*multiplied by -50
Negative factors:
Mexican Restaurants
Pizza Places
Other Restaurants
Weights assigned
-50
-50
-25
Methodology
What neighborhood in Portland would be the best to open a Mexican Restaurant or Pizza Place?
In order to answer this question, a formula was devised to give each neighborhood a score.
Adjusted Population - The number of residents in the neighborhood
NewUnits - The expected number of new residential unit
Median Household Income - The median house hold income of the neighborhood
Contributions - a positive influence on score determined by nearby venues likely to attract additional patrons
Same Restaurants - a negative influence on score determined by number of Pizza Places and Mexican Restaurants
Other Restaurants - a negative influence on score determined by number of other restaurants in the neighborhood
Walk Score - number between 0-100 to describe how 'walkable' the neighborhood is
As the local residents are likely to represent most of the business, the population + new units is multiplied by house hold income.
The population is multiplied by .75 to capture the fact that on average more that 1 person lives in a household.
This first portion represents roughly the total amout of income in the neighborhood
The positive and negative contributors are added to the score. This resulting figure is multiplied by walk score.
The total figure is divided by 100000000 to make the score more digestible
Results
According to the formula NORTHWEST DISTRICTS ASSOCIATION is the best neighborhood to open either a Pizza Place or a Mexican Restaurant.
Results
The map below shows existing Pizza and Mexican locations represented as red points and green heat signatures for new construction.
The darker the green, the higher number of new units. The large green circle represents an optimal location for a new restaurant
Conclusion and Discussion
Based on the research and analysis it was determined that if one wanted to enter the restaurant market in Portland, Oregon. Opening either a pizza place or a Mexican restaurant in the North West Neighborhood would be the best choice.
Limitations
It is important to note that there are some limitations to this analysis. There are other factors to consider when opening a restaurant, things such as rent/lease rates and parking availability. In addition, the formula that was devised to assign a score to each neighborhood could be refined to be more accurate. Lastly, additional information about the contributing factors could be collected to get a more precise gauge of their impact on potential business.