Prepared to help small towns assess community population and economic trends, this publication provides a step-by-step guide for establishing an on-going local data collection system, which is based on four local indicators and will provide accurate, up-to-date estimates of population, family income, and gross sales within a town's trade area. The four local indicators are discussed: (1) electric hook-ups which are used to estimate present population; (2) school enrollment which is used to project population trends; (3) sales tax collections which are used to assess present economic activity; and (4) postal delivery service and postal receipts which are used to provide a further estimate of population and economic activity in the community. In addition to these four local indicators, this publication shows how to access and interpret three important indicators available from the United States Census: (1) population by incorporated community and census districts, including data on number of households and average family size; (2) personal income, including estimates of per capita and median family income; and (3) labor force, including total employment and unemployment, and male and female labor force participation rates. Examples from the community of Willcox, Arizona are provided throughout the publication. (NQA)