Market Research Report
Based on the parameters below, we project this business would break even in 11.3 years with a net present value of -$14,937.
Net Cash Flow over 5 years
|Year 0||Year 1||Year 2||Year 3||Year 4||Year 5|
|Net Operating Profits||$6,134||$9,200||$12,267||$12,832||$13,422|
|Net Cash Flow||-$69,322||$6,134||$9,200||$12,267||$12,832||$53,687|
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 Downey.
- median income
- gross rent
- population density
- household size
- July temperature
- November temperature
- family households
- May temperature
- February temperature
- median resident age
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.
Media Blast & Abrasives
591 Apollo St Brea, CA 92821
A-1 Abrasive Blasting
115 Nevada St El Segundo, CA 90245
Abrasive Blast Finishing Co.
9625 Rush St South El Monte, CA 91733
TIP: Your market is dominated by regional chains. Consider entering the market with an independant business or a national franchise.
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About Downey and its Consumers
Downey is a city located in southeast Los Angeles County, California, United States, 21 km (13 mi) southeast of downtown Los Angeles. The city is best known as the birthplace of the Apollo space program, and is the hometown of Richard and Karen Carpenter. As of the 2010 census, the city had a total population of 111,772. Prior to the arrival of the Spanish in Alta California, the area that now comprises Downey was inhabited by the Tongva ethnic group, which came to be called the Gabrielino by the Spanish. The nearest Tongva settlements appear to have been just north and northeast of present-day Downey, although there is difficulty is locating them very precisely. The villages of Naxaawngaand Sehat seem to have been situated near the present-day community of Los Nietos. Chokiishnga and Huutnga are other Tongva place names that may have referred to villages in the general area north of Downey between the San Gabriel River and Rio Hondo. In all four cases, it is difficult to relate the original location descriptions, based on ranchos and land grants, to more specific sites identifiable by todays landmarks.
Downey is a city located in southeast Los Angeles County, California, United States, 21 km (13 mi) southeast of downtown Los Angeles. The city is best known as the birthplace of the Apollo space program, and is the hometown of Richard and Karen Carpenter. As of the 2010 census, the city had a total population of 111,772. Prior to the arrival of the Spanish in Alta California, the area that now...description source
Population Population (2012) 112,873 Population Density 9,096 ppl/sq mi Population Growth Rate 1.0% Median Income $53,202 Median Age 34.1 Unemployment 8.7% Family Household Percent 78.1% Avg. Household Size 3.3 Avg. House Price $381,800 Foreign Born 32.5% Married 35.8% Cost of Living 68.3%
Demographics White 17.7% Hispanic / Latino 70.7% Black / African American 3.4% Asian 6.7% Native American 0.2%
Market & Regulatory Conditions For California
Third parties rate California's business and regulatory conditions according to their own methods. We report them here for informational purposes.
Small-Business Friendliness Overall small business friendliness F Ease of starting a small business D Cost of hiring a new employee C- Overall regulatory friendliness F Friendliness of health and safety regulations F Friendliness of employment, labor, and hiring regulations F Friendliness of tax code F Friendliness of licensing regulations F Friendliness of environmental regulations D Friendliness of zoning regulations D Publicity of training programs C- Publicity of networking programs D+ Current economic health of small business 40th/50 Change in revenue over past 12 months 40th/50 Forecast of small business's future economic health 35th/50Source: Thumbtack.com (2012)
Business Friendliness Overall Business Friendliness 32th/50 Cost of Doing Business 48th/50 Economy 9th/50 Infrastructure 24th/50 Workforce 36th/50 Quality of life 23th/50 Technology and innovation 1th/50 Business friendliness 48th/50 Education 26th/50 Cost of living 47th/50 Access to capital 1th/50Source: CNBC (2014)
Tax Friendliness California Corporate Tax Rate 7.5% Avg Local Corporate Tax Rate in California 0.9% Avg Combined Corporate Tax Rate 8.4% Overall tax friendliness 48th/50 Corporate tax rank 34th/50 Individual income tax rank 50th/50 Sales tax rank 42th/50 Unemployment insurance tax rank 14th/50 Property tax rank 14th/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.