Market Research Report
Based on the parameters below, we project this business would break even in 1.9 years with a net present value of $250,106.
Net Cash Flow over 5 years
|Year 0||Year 1||Year 2||Year 3||Year 4||Year 5|
|Net Operating Profits||$35,149||$52,723||$70,297||$74,528||$79,012|
|Net Cash Flow||-$66,290||$35,149||$52,723||$70,297||$74,528||$316,050|
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 Denton.
- median income
- gross rent
- population density
- July temperature
- land area
- November temperature
- household size
- May temperature
- family households
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About Denton and its Consumers
The Texas city of Denton is located about 40 miles northwest of Dallas and about 38 miles northeast of Fort Worth. Together, the three cities comprise an area traditionally referred to as the "Golden Triangle". The city is served by three major highways: Interstate 35, U.S. Route 380, and U.S. Route 377. Founded in 1856 and later incorporated in 1866, the city of Denton is the county seat of Denton County. Both the city and county were named for John B. Denton, a prominent lawyer, preacher, and soldier. Denton is home to two major Universities: the University of North Texas (UNT) which is the largest university in north Texas and the third largest in the state; and Texas Woman's University (TWU) which despite its name is open to both genders. Music fans will recognize Denton as the home town of Grammy Award winning band Brave Combo and also of the Grammy Award winning 1 O'Clock Lab band. It is also the former habitat of UNT alumni Roy Orbison, Pat Boone, and Don Henley.
The Texas city of Denton is located about 40 miles northwest of Dallas and about 38 miles northeast of Fort Worth. Together, the three cities comprise an area traditionally referred to as the "Golden Triangle". The city is served by three major highways: Interstate 35, U.S. Route 380, and U.S. Route 377. Founded in 1856 and later incorporated in 1866, the city of Denton is the county seat of...description source
Population Population (2012) 121,123 Population Density 1,377 ppl/sq mi Population Growth Rate 6.8% Median Income $42,658 Median Age 27.2 Unemployment 5.5% Family Household Percent 53.8% Avg. Household Size 2.5 Avg. House Price $148,800 Foreign Born 12.1% Married 45.5% Cost of Living 49.4%
Demographics White 61.9% Hispanic / Latino 21.2% Black / African American 10.0% Asian 4.1% Native American 0.5%
Market & Regulatory Conditions For Texas
Third parties rate Texas's business and regulatory conditions according to their own methods. We report them here for informational purposes.
Small-Business Friendliness Overall small business friendliness A+ Ease of starting a small business A Cost of hiring a new employee B+ Overall regulatory friendliness A Friendliness of health and safety regulations A- 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 C+ Publicity of networking programs C Current economic health of small business 13th/50 Change in revenue over past 12 months 29th/50 Forecast of small business's future economic health 17th/50Source: Thumbtack.com (2012)
Business Friendliness Overall Business Friendliness 2th/50 Cost of Doing Business 23th/50 Economy 1th/50 Infrastructure 1th/50 Workforce 11th/50 Quality of life 37th/50 Technology and innovation 2th/50 Business friendliness 20th/50 Education 27th/50 Cost of living 18th/50 Access to capital 5th/50Source: CNBC (2014)
Tax Friendliness Texas Corporate Tax Rate 6.3% Avg Local Corporate Tax Rate in Texas 1.9% Avg Combined Corporate Tax Rate 8.2% Overall tax friendliness 10th/50 Corporate tax rank 39th/50 Individual income tax rank 6th/50 Sales tax rank 36th/50 Unemployment insurance tax rank 15th/50 Property tax rank 36th/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.