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 $205,489.
Net Cash Flow over 5 years
|Year 0||Year 1||Year 2||Year 3||Year 4||Year 5|
|Net Operating Profits||$28,950||$43,424||$57,899||$60,031||$62,242|
|Net Cash Flow||-$48,693||$28,950||$43,424||$57,899||$60,031||$248,967|
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 Evansville.
- median income
- gross rent
- population density
- July temperature
- land area
- household size
- November temperature
- May temperature
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About Evansville and its Consumers
Located along the banks of the Ohio River in the southwestern corner of Indiana is the city of Evansville. As the regional hub for the Tri-State (Indiana, Kentucky, and Illinois) area, Evansville is home to the University of Southern Indiana and also to the University of Evansville. The city, which is also known as the "River City", serves as the county seat of Vanderburgh County. Evansville is home to a number of significant cultural, historic, and artistic sites. The Evansville Museum of Arts, History & Science houses a large permanent art collection with paintings, sculptures, and exhibits which span the decades from the 16th century to the present day. The Angel Mounds State Historic Site comprises one of the best preserved prehistoric Native American sites in the country. The Evansville African American Museum, one of the city's newest attractions, chronicles the struggles and celebrates the successes of the city's African American community throughout the past 70 years. The Reitz Home Museum, Evansville's only Victorian House Museum, is recognized as one of the nation's finest examples of Second French Empire architecture. Performing arts have a home in the city's Victory Theatre, residence of the Evansville Philharmonic Orchestra.
Located along the banks of the Ohio River in the southwestern corner of Indiana is the city of Evansville. As the regional hub for the Tri-State (Indiana, Kentucky, and Illinois) area, Evansville is home to the University of Southern Indiana and also to the University of Evansville. The city, which is also known as the "River City", serves as the county seat of Vanderburgh County. Evansville...description source
Population Population (2012) 120,235 Population Density 2,723 ppl/sq mi Population Growth Rate 2.4% Median Income $35,939 Median Age 35.9 Unemployment 8.3% Family Household Percent 55.5% Avg. Household Size 2.2 Avg. House Price $89,800 Foreign Born 2.3% Married 34.7% Cost of Living 44.1%
Demographics White 80.9% Hispanic / Latino 2.6% Black / African American 12.5% Asian 1.0% Native American 0.2%
Market & Regulatory Conditions For Indiana
Third parties rate Indiana's business and regulatory conditions according to their own methods. We report them here for informational purposes.
Small-Business Friendliness Overall small business friendliness B+ Ease of starting a small business B+ 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 B+ Friendliness of environmental regulations B+ Friendliness of zoning regulations B+ Publicity of training programs C Publicity of networking programs D Current economic health of small business 29th/50 Change in revenue over past 12 months 13th/50 Forecast of small business's future economic health 14th/50Source: Thumbtack.com (2012)
Business Friendliness Overall Business Friendliness 19th/50 Cost of Doing Business 21th/50 Economy 30th/50 Infrastructure 7th/50 Workforce 27th/50 Quality of life 44th/50 Technology and innovation 25th/50 Business friendliness 11th/50 Education 15th/50 Cost of living 7th/50 Access to capital 37th/50Source: CNBC (2014)
Tax Friendliness Indiana Corporate Tax Rate 7.0% Avg Local Corporate Tax Rate in Indiana 0.0% Avg Combined Corporate Tax Rate 7.0% Overall tax friendliness 8th/50 Corporate tax rank 22th/50 Individual income tax rank 10th/50 Sales tax rank 10th/50 Unemployment insurance tax rank 7th/50 Property tax rank 5th/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.