Market Research Report
Based on the parameters below, we project this business would break even in 1.8 years with a net present value of $263,085.
Net Cash Flow over 5 years
|Year 0||Year 1||Year 2||Year 3||Year 4||Year 5|
|Net Operating Profits||$37,565||$56,347||$75,129||$78,338||$81,683|
|Net Cash Flow||-$68,818||$37,565||$56,347||$75,129||$78,338||$326,733|
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 Des Moines.
- median income
- gross rent
- population density
- July temperature
- land area
- household size
- May temperature
- November temperature
- family households
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.
900 Dayton Ave Ames, IA 50010
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About Des Moines and its Consumers
Des Moines is the capital and the most populous city in the U.S. state of Iowa. It is also the county seat of Polk County. A small portion of the city extends into Warren County. Des Moines is a major center of the U.S. insurance industry and has a sizable financial services and publishing business base. In fact, Des Moines was credited as the "number one spot for U.S. insurance companies" in a Business Wire article and named the third largest "insurance capital" of the world. The city is the headquarters for the Principal Financial Group, Athene USA insurance, the Meredith Corporation, Ruan Transportation, EMC Insurance Companies, and Wellmark Blue Cross Blue Shield. Other major corporations such as Wells Fargo, Voya Financial, Nationwide Mutual Insurance Company, ACE Limited, Marsh, Monsanto andPioneer Hi-Bred have large operations in or near the metro area. In recent years Microsoft, Hewlett Packard and Facebook have established data processing and logistical facilities in the Des Moines metro. Forbes magazine ranked Des Moines as the "Best Place for Business" in both 2010 and 2013. In 2014, NBC ranked Des Moines as the "Wealthiest City in America" according to its criteria.
Des Moines is the capital and the most populous city in the U.S. state of Iowa. It is also the county seat of Polk County. A small portion of the city extends into Warren County. Des Moines is a major center of the U.S. insurance industry and has a sizable financial services and publishing business base. In fact, Des Moines was credited as the "number one spot for U.S. insurance companies" in a...description source
Population Population (2012) 206,688 Population Density 2,555 ppl/sq mi Population Growth Rate 1.6% Median Income $41,813 Median Age 33.6 Unemployment 5.5% Family Household Percent 58.4% Avg. Household Size 2.4 Avg. House Price $117,900 Foreign Born 9.0% Married 31.7% Cost of Living 48.0%
Demographics White 70.0% Hispanic / Latino 11.9% Black / African American 10.5% Asian 4.8% Native American 0.2%
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.