How to Do a Market Analysis for a Local Business, Using Free Public Data

Start with the decision the numbers have to settle

Market research has a reputation for producing binders. The small business version should produce a yes or a no. Should we open in the next county? Add commercial work? Hire a second crew for spring? Raise prices ten percent? Write the decision at the top of a page before you pull a single table, because it tells you which numbers matter and which are trivia.

The U.S. Small Business Administration's market research guide lists what to look for: demand, market size, economic indicators such as income and employment, location, market saturation and pricing. That list is the skeleton of this page. Who your customers are as people, their worries and their words, is a separate job covered in audience research. Here we count them.

Plenty of demand is a feeling. Seven thousand roofs a year is a number you can argue with.

Free data sources, what each one counts, and the catch in each

All of these are free and none needs an account. Release dates are as of October 2026; check each source for the newest edition before you rely on it. The Census Bureau has scheduled the 2025 ACS 1-year estimates for October 29, 2026.

The Census Bureau also runs Census Business Builder, which puts selected demographic and economic data for a chosen place and business type on maps and a dashboard. It is a good first look. The steps below go to the underlying tables, because that is where the definitions live.

An afternoon market sizing, step by step

1. 1

   Draw the territory you can actually serve

   List the counties or ZIP codes your trucks reach without losing money on drive time, or the area your store's customers come from. Your own invoices are the honest map. Everything after this step is counted inside these lines.

2. 2

   Find your industry code

   Federal business data is filed under NAICS codes. Roofing contractors are 238160; plumbing, heating and air-conditioning contractors are 238220. Search the Census Bureau's NAICS lookup for yours, and note it, because every business count uses it.

3. 3

   Count the possible customers

   On data.census.gov, pull the 5-year ACS for your counties: households (table B11001), owner-occupied homes (B25003), median household income (B19013), and for home trades, Year Structure Built (B25034). Write each figure down with its margin of error.

4. 4

   Put a dollar figure on demand

   Multiply customers by how often they buy and by what they spend per purchase. Your job records supply the ticket; the frequency is an assumption you write down and defend. The BLS spending tables give a regional cross-check.

5. 5

   Count who already sells it

   From County Business Patterns, take employer establishments under your code in your counties. Add Nonemployer Statistics for the one-truck operators. Then search your main service on Google Maps from three points in the territory and list who actually shows up.

6. 6

   Read the calendar

   In Google Trends, set the region to your state or metro, the range to five years, and compare two or three phrases for your service. Peaks that repeat each year are your season. A peak that came once is an event.

7. 7

   Write one sentence with a range

   "Our two counties buy roughly $80 to $110 million of residential roofing a year, split among about 400 businesses, and we hold about 1 percent." That sentence is the deliverable. The rest is the working.

A worked example with a hypothetical roofer

Every number below is invented for illustration, so you can see the arithmetic. Your counties will give you real figures for the first column; the assumptions come from your own records.

Now the useful part. A 1.2 percent share in a market of 400 sellers says the ceiling is not demand; it is how many of those 7,200 homeowners find you, trust you and call. That points the budget at visibility and reviews rather than at a second territory. If the share had come out at 15 percent, the opposite conclusion would follow: growth means a new county or a new service, which is the decision the market and economic research we do for clients is built around.

Top-down, bottom-up, and why the honest answer is a range

The example built the market from the bottom: customers times frequency times ticket. A top-down estimate starts from total spending and narrows it. Do both. When they land within shouting distance of each other, you can trust the range. When they disagree by a factor of three, one of your assumptions is wrong, and finding which one is the most valuable hour of the whole exercise.

Consultants call the layers TAM, SAM and SOM: the total addressable market, the share you can serve with your services and territory, and the share you can realistically obtain. For a local business, the middle number is the one that matters. A national market size for roofing is a fact about the country, not about your phone.

Counting the competition two ways

The government count and the customer's count are different lists, and you need both. County Business Patterns and Nonemployer Statistics tell you how many businesses are filed under your code, which shows saturation: divide owner-occupied homes by sellers and compare the ratio with a neighboring county you know. A county with half the homes per roofer is a harder place to open.

The customer sees a shorter list: the three businesses in the map pack, the ads above them and the names friends recommend. That is the competition that takes your calls.

• Map results. Search your top three services from several addresses in the territory and record who appears and their review counts. The map pack audit shows where you stand, and the free local visibility check shows where you appear for your customers' terms.
• Ads. Who bids on your service, and what offers they lead with. The competitor ads guide shows how to look them up.
• Reviews. Count and recency for the top ten names. A leader with 600 reviews and none this year is less settled than the count suggests.
• Websites. Which competitors publish prices, warranties or financing. Each is a promise you will be compared against.

That is a snapshot. Watching rivals over time is competitive intelligence, the tools are compared in competitor analysis tools, and our competitor analysis service maps who wins your key searches and why.

Demand by month, and the searches behind it

Google Trends is the free way to see seasons. Read it carefully. Google's help center says each data point is divided by total searches in that place and time range, then scaled from 0 to 100, so it shows relative interest, not volume. It is built from a sample of searches, it drops repeated searches from the same person in a short period, and very small terms read as zero. It also excludes internal searches made by Google's own products, including AI Mode and AI Overviews.

Use it for shape, not size. Compare this year's curve with the last five, compare your phrase in your metro with the state, and notice when interest starts climbing, because that is when your marketing has to be running already. For actual monthly search estimates, Google's Keyword Planner works inside a Google Ads account with billing set up, and keyword research turns those estimates into a list of pages and ads. Your own Search Console queries are the third source, and the only one about your business specifically.

What the market pays, and what it costs you to serve it

A market can be large and still unprofitable if the going price does not cover your costs. Collect the price side with the same discipline as the demand side.

How price fits with product, place and promotion is in the 4 Ps of marketing. The ethics of gathering rivals' prices belong to competitive intelligence; the short rule is to use what they publish and what customers tell you.

Turning the numbers into a decision

Go back to the sentence at the top of the page. A small share of a large market means the job is winning more of the customers already there: visibility, reviews, a better site. A large share means the job is new ground: another territory, another service or a higher price. A growing customer count with flat competitor counts is an opening; the reverse is a warning. Put the conclusion and its range into your marketing plan, and if the answer is a new service, the product launch checklist picks up from there.

The afternoon version gets most owners to a decision they can defend. When the stakes are higher, a second location, a loan or a new line of business, DataCram's market and economic research combines primary and secondary research with forecasting models, states the sources and the confidence behind every figure, and leads the report with the recommendation. It is research to inform the decision, not financial advice. If the next step is building the plan around it, online marketing strategy is where that happens, and the marketing strategy guides cover the rest in order.