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Data & Methodology

How Locatalyze analyses
your location

Every Locatalyze report combines live API data with AI-estimated benchmarks. Here's exactly what we analyse, where the data comes from, and how we calculate your score.

The process

What happens when you submit an address

01

Address + coordinate pinning

You drop a pin on an interactive map to confirm your exact location. We capture the precise latitude/longitude coordinates — not just a suburb name — so all subsequent analysis is anchored to your specific street and block, not a generic suburb average.
02

Competitor mapping

We sweep multiple location providers — Google Maps, Geoapify and Foursquare — for businesses matching your category around your pinned coordinates, then confidence-weight the results so no single source skews the count. Each competitor is assessed by their rating and review volume to produce a competition intensity score (LOW / MEDIUM / HIGH) and a Threat Score that accounts for quality, not just count. Competition is scored within a 500m window; the underlying provider queries reach out to roughly 600–1,500m depending on category.
03

Demographic analysis

We use ABS Census 2021 data — a real Australian government dataset — for suburb-level demographics: median household income, age distribution, population density, and household size. These are cross-referenced against your business type to assess market fit. ABS data is the most reliable dataset in the report.
04

Rent benchmarking

Your submitted monthly rent is compared against estimated rent benchmarks for the suburb and business category. Rent benchmarks are AI-estimated from category patterns, suburb context, and commercial-listing signals. Treat the benchmark range as directional guidance, not a market quote. We calculate rent as a percentage of projected revenue and rate it Healthy / Watch / Risky. For more accurate benchmarking, calibrate with your own figures.
05

Model calibration (optional but impactful)

If you fill in the "Calibrate your model" section, the financial engine replaces generic category norms with your actual inputs. Average order value overrides the typical ticket for your category — changing revenue projections and break-even thresholds. Operating hours apply a demand multiplier against the standard baseline (e.g. breakfast/lunch = 0.65×; all-day = 1.35×). Location access type applies a footfall multiplier (street frontage = baseline; transport hub = +10%; shopping centre = +5%; side street = −25%; arcade = −30%). Each field you provide raises the Model Accuracy score displayed on the report.
06

Deterministic financial model

A rules-based engine (not AI) builds the P&L from your calibrated inputs: monthly revenue, COGS, staffing, rent, fixed overheads, gross margin, net profit, contribution-margin break-even customers per day, and investment payback period. All formulas are documented below. If any critical input is missing, the relevant financial section is suppressed and a data gap is shown — no fake numbers.
07

Written analysis & verdict

The quantitative scores from Steps 1–6 are passed to a language model to generate the written analysis: SWOT, market demand narrative, competitive positioning, and 3-year projection. The GO / CAUTION / NO GO verdict is determined by the weighted location score — the narrative explains the verdict; it does not decide it.

Data sources

Where the data comes from

Live API

Competitor providers

Competitor locations, ratings and review counts swept live from Google Maps, Geoapify and Foursquare, then confidence-weighted. Scored within a 500m window of your coordinates.

Government data

ABS Census 2021

Population demographics, median income, household size and age distribution from the Australian Bureau of Statistics. The most reliable dataset in the report.

AI-estimated

Rent benchmarks

Suburb-level rent benchmarks estimated by the AI pipeline from category patterns, suburb context, and commercial-listing signals. Treat as directional guidance, not a market quote.

Geocoding

LocationIQ

Geocoding — converts your typed address into precise coordinates for the analysis. The interactive address map is rendered with Mapbox.

By type

Category trade norms

Daily customers baseline, average ticket size, COGS %, gross margin, and staffing cost ratios segmented by business type. Used as the fallback when you do not provide your own figures.

Rules-based

Deterministic Compute Engine

A rules-based financial model (not AI) that builds the P&L from your calibrated inputs. Formulas are deterministic and documented — no black box outputs.

AI-written

Narrative layer

Generates the prose sections only — SWOT, market narrative, risk scenarios, and 3-year projection. Financial figures come from the compute engine, not the language model.

Scoring system

How your Location Score is calculated

The Location Score (0–100) is a weighted composite of five dimensions. Each dimension is scored independently then combined into a final score that determines your GO / CAUTION / NO GO verdict. Every report also shows a separate Data Completeness % and Model Confidence label so you can see how much of the analysis relied on your own inputs versus fallback category norms. This score powers your on-demand address report; our public suburb guides use a separate, suburb-level model — see How suburb location guides are scored below.

20%

weight

Rent Affordability

Rent as a percentage of projected revenue. Under 14% rates as Healthy; 14–18% as Watch (margin buffer thinning); above 22% as Risky. The workable band runs 8%–18% of revenue. This dimension is one of the strongest predictors of long-term viability.

25%

weight

Competition

Competitor density within 500m, weighted by their threat level (ratings, review volume, proximity). Fewer strong competitors = higher score.

20%

weight

Market Demand

Search demand signals, population density, income fit, household growth and demographic alignment for your business category. When no measured demand signal is available, this weight is reduced and redistributed across the other dimensions.

25%

weight

Profitability

Net profit margin after all costs. Calculated from your revenue estimate minus rent, COGS, labour and fixed costs.

10%

weight

Location Quality

Physical location signals: access quality, anchor proximity, and local activity conditions around your specific site.

GO60–100 / 100

Economics and location signals support proceeding with normal diligence. The data gives you a basis to act — move to lease negotiation and site visits.

CAUTION40–59 / 100

A split read — economics, competition, demand, or location need verification before you commit. Viable with the right execution.

NO GO0–39 / 100

Economics or competition read as unfavourable on the measured inputs. The risk profile does not support proceeding at this time.

INSUFFICIENT DATAn/a / 100

Core commercial inputs (e.g. ticket size, demand, or foot traffic) are missing, so the verdict is provisional — not a measured rejection. Re-run once the missing inputs are confirmed; we never present a confident verdict on thin data.

The bands above describe the composite score on its own. The engine can apply a per-axis floor — for example when Profitability or Competition lands at the data floor because key inputs were unmeasured — that makes the displayed verdict harsher than the score alone predicts. When that happens, the report shows a one-line note explaining the override, so the verdict stays auditable.

Suburb guides

How suburb location guides are scored

Our public suburb guides (under Location guides) use a separate, suburb-level model from the on-demand address report above. Each suburb is rated on five 1–10 location factors, scored for three business types, and blended into a single 0–100 suburb score. Every figure is computed deterministically from the factors — never hand-entered — and a build-time check fails the site if any score is set by hand.

1–10

weight

Demand

Strength of underlying trade demand for the suburb. Higher is better — it lifts every business-type score.

1–10

weight

Rent cost

Rent pressure for the suburb. Higher is worse: expensive rent pulls scores down.

1–10

weight

Competition

How saturated the suburb already is. Higher is worse. These are curated factor levels, not a live competitor scan.

1–10

weight

Seasonality

Revenue volatility across the year. Higher is worse — steadier trade scores better.

1–10

weight

Tourism dep

How tourism-driven the trade is. Contextual: it lifts restaurant and retail scores but counts against cafés, which rely on steady local routine.

The five factors are weighted differently for each business type, then each business-type score is blended into the headline suburb score — café 40%, restaurant 35%, retail 25%. We surface the per-type scores so a suburb that suits a café is not presented as if it suits every concept, and we label the strongest fit.

Café weighting

Demand 40 · Rent cost 28 · Competition 18 · Seasonality 14

Cafés lean hardest on steady local demand and affordable rent; tourism is treated as a risk, not a help.

Restaurant weighting

Demand 32 · Rent cost 22 · Competition 18 · Seasonality 14 · Tourism dep 14

Restaurants can convert tourism and destination trade, so it counts in their favour.

Retail weighting

Demand 28 · Rent cost 22 · Competition 18 · Seasonality 10 · Tourism dep 22

Retail is the most tourism-sensitive of the three and the least exposed to seasonality.

Suburb composite

(Café × 40%) + (Restaurant × 35%) + (Retail × 25%)

The three business-type scores blend into one 0–100 suburb score. Suburb guides rank suburbs by this composite, highest first.

GO69–100 / 100

The suburb scores well across demand, rent and competition for the blended business mix.

CAUTION60–68 / 100

A workable suburb with trade-offs — the score is held back by rent, competition or seasonality on at least one concept.

RISKY0–59 / 100

The factor mix works against most concepts here. Treat as a stretch unless your model is unusually strong on the weak factor.

Rent viability check

Each suburb guide also shows a rent-viability table across the quoted rent band. As a quick screen it anchors rent at 10% of revenue — so a given rent implies the monthly revenue you would need to keep rent at that level — then converts that to a daily customer target across roughly 26 trading days (a six-day week). This is an illustrative suburb-level helper; your on-demand report uses the full engine, 30 trading days, and your own inputs.

A note on the two verdicts: suburb guides read GO / CAUTION / RISKY (some guides label the lowest tier NO) on the 69 / 60 bands above. Your on-demand address report reads GO / CAUTION / NO GO on the 60 / 40 bands in the previous section. They are deliberately separate models — one ranks suburbs for discovery, the other rates a specific site with your numbers.

Financial model

How we estimate revenue and profit

Our financial model combines your inputs with category baseline data to build a realistic P&L. Here's the logic behind each number.

Base revenue (category norm)

daily_customers_base × hours_multiplier × access_multiplier × avg_ticket × 30

The baseline revenue from which all scenarios are built. We use 30 calendar days per month; reduced trading (e.g. six-day weeks) is reflected through the hours_multiplier rather than the day count, so the model stays consistent across formats. hours_multiplier ranges from 0.45× (weekends only) to 1.35× (all-day). access_multiplier ranges from 0.70× (arcade) to 1.10× (transport hub). avg_ticket uses your entered value if provided, otherwise the category typical.

COGS (Cost of Goods)

~20–45% of revenue (by category)

COGS is derived from the category gross margin, so it varies by format: cafés ~35%, restaurants ~32%, retail ~45%, bars ~28%, takeaway ~40%. Specialist categories sit outside this range (e.g. pharmacy ~65%). Based on common gross margins for Australian operators.

Labour Costs

Category staffing baseline × your staffing scale

Each category carries a monthly staffing baseline — café ~$18,000, restaurant ~$35,000, retail ~$16,000 — which you can scale up or down in the calibration step. Does not include owner salary.

Fixed Costs (for break-even)

Monthly rent + staffing + other fixed costs

Fixed costs are rent, staffing, and other recurring overheads (utilities, insurance, baseline marketing, repairs) — everything that does not scale with covers. COGS is excluded because it is variable. This is the contribution-margin break-even, which avoids double-counting variable costs.

Break-even Customers / Day

Fixed costs ÷ (avg_ticket × (1 − COGS%) × 30)

The minimum daily customers needed to cover fixed costs over 30 days per month (matching the revenue formula). The denominator is the per-customer contribution margin — average ticket less the cost of goods on that sale. Compared against your projected daily demand: if projected > break-even, the location is viable at current inputs. The zero-profit survival floor (rent + overheads only, excluding staff cost) is lower than this number.

Payback Period

Setup cost ÷ Monthly net profit

Months to recover your initial investment. Only shown when monthly net profit is positive and setup cost is greater than $0. Under 12 months is excellent. Over 24 months carries meaningful risk.

3-Year Projection Assumption

Year2 = Year1 × 1.08, Year3 = Year2 × 1.10

Projection growth assumptions use a two-step rate: +8% then +10% when sufficient live revenue signals are available.

Important: Use as a decision-support tool

Locatalyze reports are designed to help you make better-informed decisions — not to replace professional due diligence. Scores and P&L figures come from our deterministic rules engine and category benchmarks; the written narrative is generated by AI on top of those numbers. Neither the engine nor the narrative guarantees trading outcomes.

Before signing a lease or committing capital, we recommend:

Conducting your own foot traffic counts at different times and days
Speaking to existing business owners in the area
Getting independent advice from a commercial property lawyer
Reviewing actual trading figures from comparable businesses
Consulting a business accountant to validate the financial model

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