Iowa Retail & Service Business Threshold Analysis: A Comparative Look at 2000-2005

This report provides information for communities and business owners to increase their understanding of retail trends in Iowa. Using data for the years 2000-2005, trends are monitored in demand threshold levels for different types of service and retail businesses while accounting for differences in employer firms and non-employer firms. The distinction between employer firms which report a payroll and non-employer firms which report no paid employees, allows us to reach conclusions about start up costs in different areas and which segments of the Iowa’s economy have the most growth potential. In general, demand threshold levels decreased during the time period 2000-2005 for select service related businesses while in the retail arena superstores represented the only category with substantial reduction in threshold levels. Across the state, retail threshold levels for businesses that require a physical location saw increases in threshold levels. Separating the data between employer and non-employer firms also shows that increases in sole-proprietorships has largely been concentrated in hobby type businesses rather than growth type businesses. Looking at the trends in threshold analysis allows us to glimpse the competitive forces at work in the state, and see areas where profit opportunities and entry and exit of firms have seen the most dramatic changes.