BUSINESS PLANNING

Business Planning



Table of Contents

Task 13

Data Sources3

Survey Methology and Frame8

Methods for Obtaining Primary Data8

Observation8

Questioning12

Primary and Secondary Data as Inputs to the Levels of Market Analysis13

Task 214

October Cost of Garage14

Percentiles15

Quartiles15

Task 316

Financial Decision Makers16

Net present value (NPV)18

Forecast20

Task 421

EOQ Mean22

Appendix25

Business Planning

Task 1

a) Data Sources

All data sources are not created equal. Some reference material has more value than others do. This does not mean that value equals a greater quantity of information. The actual value involves the quality of the information provided. Sources of data can be put into the two general categories of being either primary or secondary.

A primary data source is something that originates from first-hand knowledge of the person referenced in the data or from a first-hand witness.

A secondary data source means that the information is simply second-hand. If you write your own life history, the data you include would be considered primary. If you write about incidents in the lives of extended family (which you did not witness) the data is secondary. The information in a will is primary. The information in a will abstract book is secondary. Data on a ship's passenger manifest (a list of people who boarded the ship before it sailed) is primary but an index (created by someone compiling the original list) is secondary.

Primary data--Information that researchers gather first hand.

Secondary data--Information from secondary sources, i.e., not directly compiled by the analyst; may include published or unpublished work based on research that relies on primary sources of any material other than primary sources used to prepare a written work.

The Appraisal of Real Estate provides only a brief discussion of primary data when it states that "specific data and competitive supply and demand data, which deal with the subject property and comparable properties in the subject market, is most often obtained by appraisers themselves and therefore qualifies as primary data." This statement is correct but short of being an explicit definition.

The Appraisal of Real Estate also provides only a brief discussion of secondary data when it states that "this secondary data describes the general real estate market and is usually collected by a research firm or government agency." (4) Again, this is close to a definition, but it is not an explicit definition.

Consider the following definitions for primary and secondary data taken from marketing literature:

* Primary data is facts and information collected specifically for the purpose of the investigation at hand.

* Secondary data is facts and information gathered not for the immediate study at hand but for some other purpose. (5)

Secondary data has been gathered by others for their own purposes, but the data could be useful in the analysis of a wide range of real property. In general, secondary data exists in published sources.

These definitions relate these two forms of data. Secondary data is generated by means of primary data gathering techniques. One person or entity's primary data become another person or entity's secondary data. The best example of this relationship is the data of the ...