Market Research Report
Based on the parameters below, we project this business would break even in 7.4 years with a net present value of $5,587.
Net Cash Flow over 5 years
|Year 0||Year 1||Year 2||Year 3||Year 4||Year 5|
|Net Operating Profits||$4,005||$6,007||$8,010||$8,326||$8,654|
|Net Cash Flow||-$29,676||$4,005||$6,007||$8,010||$8,326||$34,617|
Startup costs are estimated as the larger of PYE and median income multiplied by the cost of living in the city. The positive cash flows in years 1 to 5 are estimated from the PYE. The first year is discounted by 50%, the second year is discounted by 75%, the fourth through tenth years are inflated according to a growth rate estimated from the GDP growth rate of the state. The profit margin is defaulted 10%. In year 5 a “terminal value” equal to the year 5 net operating income times three is added. The hurdle rate is defaulted to 15%. All values are net of taxes.
How is this opportunity calculated?
The following ten market factors are the most important determinants used to calculate the need for businesses of this type in Chattanooga.
- median income
- gross rent
- population density
- July temperature
- land area
- November temperature
- household size
- May temperature
Abrasive blast cleaning businesses can provide a range of services, from surface contaminant removal and cleaning, to the preparation and finishing of many different types of surfaces.
Porter Warner Industries
2 E 38th St Chattanooga, TN 37410
Hinton Water Blasting Co
2103 Tinsley Pl Chattanooga, TN 37404
Abrasive Blasting & Coating
1227 Latta St Chattanooga, TN 37406
Hinton Water Blasting Co
2441 Broad St Ste 103 Chattanooga, TN 37408
Challenge Supply Inc
1701 E 28th St Chattanooga, TN 37407
TIP: Your market is dominated by independant companies. Consider entering with a national or regional franchise.
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About Chattanooga and its Consumers
Chattanooga is the fourth-largest city in the U.S. state of Tennessee, with a population of 167,674 as of the 2010 census, and an estimated population of 171,279 in 2012. It is the seat of Hamilton County. Located in southeastern Tennessee in East Tennessee, on Chickamauga Lake and Nickajack Lake, which are both part of the Tennessee River, Chattanooga lies approximately 120 miles (190 km) to the northwest of Atlanta, Georgia, 120 miles (190 km) to the southwest of Knoxville, Tennessee, about 135 miles (217 km) to the southeast of Nashville, Tennessee, about 120 miles (190 km) to the northeast of Huntsville, Alabama, and about 148 miles (238 km) to the northeast of Birmingham, Alabama. Chattanooga abuts the Georgia border and is where three major interstate highways meet: I-24, I-75, and I-59. The city, which has a downtown elevation of approximately 680 feet (210 m), lies at the transition between the ridge-and-valley portion of the Appalachian Mountains and the Cumberland Plateau. The city is therefore surrounded by various mountains and ridges. The official nickname for Chattanooga is the Scenic City, being reinforced by the city's growing national reputation as a haven for numerous outdoor activities.
Chattanooga is the fourth-largest city in the U.S. state of Tennessee, with a population of 167,674 as of the 2010 census, and an estimated population of 171,279 in 2012. It is the seat of Hamilton County. Located in southeastern Tennessee in East Tennessee, on Chickamauga Lake and Nickajack Lake, which are both part of the Tennessee River, Chattanooga lies approximately 120 miles (190 km)...description source
Population Population (2012) 171,279 Population Density 1,248 ppl/sq mi Population Growth Rate 2.2% Median Income $32,791 Median Age 37.2 Unemployment 9.7% Family Household Percent 57.1% Avg. Household Size 2.3 Avg. House Price $140,000 Foreign Born 4.2% Married 37.5% Cost of Living 47.5%
Demographics White 55.9% Hispanic / Latino 5.5% Black / African American 34.7% Asian 2.0% Native American 0.2%
Market & Regulatory Conditions For Tennessee
Third parties rate Tennessee's business and regulatory conditions according to their own methods. We report them here for informational purposes.
Small-Business Friendliness Overall small business friendliness B- Ease of starting a small business B Cost of hiring a new employee A Overall regulatory friendliness A- Friendliness of health and safety regulations B+ Friendliness of employment, labor, and hiring regulations A- Friendliness of tax code A Friendliness of licensing regulations A Friendliness of environmental regulations A- Friendliness of zoning regulations A Publicity of training programs A- Publicity of networking programs B+ Current economic health of small business 17th/50 Change in revenue over past 12 months 16th/50 Forecast of small business's future economic health 30th/50Source: Thumbtack.com (2012)
Business Friendliness Overall Business Friendliness 14th/50 Cost of Doing Business 13th/50 Economy 14th/50 Infrastructure 4th/50 Workforce 6th/50 Quality of life 50th/50 Technology and innovation 28th/50 Business friendliness 18th/50 Education 39th/50 Cost of living 9th/50 Access to capital 33th/50Source: CNBC (2014)
Tax Friendliness Tennessee Corporate Tax Rate 7.0% Avg Local Corporate Tax Rate in Tennessee 2.5% Avg Combined Corporate Tax Rate 9.5% Overall tax friendliness 15th/50 Corporate tax rank 15th/50 Individual income tax rank 8th/50 Sales tax rank 47th/50 Unemployment insurance tax rank 26th/50 Property tax rank 37th/50Source: Tax Foundation (2015)
Resources to Get Started
Now that you have a potential location and idea for your business, here is a list of helpful resources you may need to get started.