Market Research Report
Based on the parameters below, we project this business would break even in 2.6 years with a net present value of $271,219.
Net Cash Flow over 5 years
|Year 0||Year 1||Year 2||Year 3||Year 4||Year 5|
|Net Operating Profits||$43,432||$65,148||$86,864||$90,860||$95,039|
|Net Cash Flow||-$113,879||$43,432||$65,148||$86,864||$90,860||$380,157|
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 El Cajon.
- median income
- gross rent
- population density
- July temperature
- November temperature
- household size
- May temperature
- family households
- February temperature
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About El Cajon and its Consumers
El Cajon is a city in San Diego County, California. Nestled in a valley surrounded by mountains, the city has acquired the nickname of "The Big Box". Its name originated similarly, from the Spanish phrase "el cajón", which means "the big box" or "the drawer." El Cajon, the Spanish words for "the box," was first recorded on September 10, 1821, as an alternative name for sitio rancho Santa Mónica, describing the "boxed in" nature of the valley in which it sat. The name appeared on maps in 1873 and 1875 as shortened to just "Cajon" until the modern town developed where the post office was named "Elcajon." In 1905, the name was once again expanded to "El Cajon" when California banker and historian, Zoeth Skinner Eldredge, insisted that the words be separated. According to the United States Census Bureau, the city has a total area of 14.4 square miles (37 km2), all land. It is bordered by San Diego and La Mesa on the west, Spring Valley on the south, Santee on the north, and unincorporated San Diego County on the east. It includes the neighborhoods of Fletcher Hills,Bostonia, and Rancho San Diego.
El Cajon is a city in San Diego County, California. Nestled in a valley surrounded by mountains, the city has acquired the nickname of "The Big Box". Its name originated similarly, from the Spanish phrase "el cajón", which means "the big box" or "the drawer." El Cajon, the Spanish words for "the box," was first recorded on September 10, 1821, as an alternative name for sitio rancho Santa...description source
Population Population (2012) 101,435 Population Density 7,027 ppl/sq mi Population Growth Rate 2.0% Median Income $43,540 Median Age 32.4 Unemployment 10.7% Family Household Percent 69.2% Avg. Household Size 2.8 Avg. House Price $314,900 Foreign Born 20.7% Married 36.9% Cost of Living 68.7%
Demographics White 62.0% Hispanic / Latino 26.8% Black / African American 3.8% Asian 2.0% Native American 0.06%
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.