Market Research Report
Based on the parameters below, we project this business would break even in 1.7 years with a net present value of $245,781.
Net Cash Flow over 5 years
|Year 0||Year 1||Year 2||Year 3||Year 4||Year 5|
|Net Operating Profits||$34,668||$52,002||$69,336||$72,297||$75,385|
|Net Cash Flow||-$60,530||$34,668||$52,002||$69,336||$72,297||$301,539|
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 Davenport.
- median income
- gross rent
- population density
- July temperature
- land area
- household size
- May temperature
- November temperature
- family households
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About Davenport and its Consumers
Davenport is a city located along the Mississippi River in Scott County, Iowa, United States. Davenport is the county seatof and largest city in Scott County; it is also the largest of the Quad Cities, a metropolitan area with a population estimate of 382,630 and a CSA population of 474,226, making it the 90th largest CSA in the nation. Davenport was founded on May 14, 1836 by Antoine LeClaire and was named for his friend, George Davenport, a colonel during the Black Hawk War stationed at nearby Fort Armstrong. According to the 2010 census, the city had a population of 99,685 (making it Iowa's third-largest city). However, the city is currently appealing this figure, arguing that the Census Bureau missed a section of residents that would place the total population over 100,000, and indeed, even the Census Bureau's own estimate for Davenport's 2011 population is 100,802. Located approximately half way between Chicago and Des Moines, Davenport is on the border of Iowa and Illinois. The city is prone to frequent flooding due to its location on the Mississippi River.
Davenport is a city located along the Mississippi River in Scott County, Iowa, United States. Davenport is the county seatof and largest city in Scott County; it is also the largest of the Quad Cities, a metropolitan area with a population estimate of 382,630 and a CSA population of 474,226, making it the 90th largest CSA in the nation. Davenport was founded on May 14, 1836 by Antoine LeClaire...description source
Population Population (2012) 101,363 Population Density 1,610 ppl/sq mi Population Growth Rate 1.7% Median Income $41,672 Median Age 35.2 Unemployment 6.7% Family Household Percent 60.3% Avg. Household Size 2.4 Avg. House Price $120,100 Foreign Born 4.7% Married 34.6% Cost of Living 45.8%
Demographics White 75.7% Hispanic / Latino 8.1% Black / African American 11.4% Asian 2.5% Native American 0.4%
Market & Regulatory Conditions For Iowa
Third parties rate Iowa's business and regulatory conditions according to their own methods. We report them here for informational purposes.
Small-Business Friendliness Overall small business friendliness C+ Ease of starting a small business C- Cost of hiring a new employee A- Overall regulatory friendliness A+ Friendliness of health and safety regulations A+ Friendliness of employment, labor, and hiring regulations A+ Friendliness of tax code B+ Friendliness of licensing regulations A+ Friendliness of environmental regulations A+ Friendliness of zoning regulations A+ Publicity of training programs A+ Publicity of networking programs C- Current economic health of small business 4th/50 Change in revenue over past 12 months 3th/50 Forecast of small business's future economic health 45th/50Source: Thumbtack.com (2012)
Business Friendliness Overall Business Friendliness 12th/50 Cost of Doing Business 7th/50 Economy 18th/50 Infrastructure 25th/50 Workforce 37th/50 Quality of life 20th/50 Technology and innovation 29th/50 Business friendliness 9th/50 Education 22th/50 Cost of living 12th/50 Access to capital 49th/50Source: CNBC (2014)
Tax Friendliness Iowa Corporate Tax Rate 6.0% Avg Local Corporate Tax Rate in Iowa 0.8% Avg Combined Corporate Tax Rate 6.8% Overall tax friendliness 41th/50 Corporate tax rank 49th/50 Individual income tax rank 32th/50 Sales tax rank 23th/50 Unemployment insurance tax rank 33th/50 Property tax rank 38th/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.