Market Research Report
Based on the parameters below, we project this business would break even in 2.8 years with a net present value of $269,815.
Net Cash Flow over 5 years
|Year 0||Year 1||Year 2||Year 3||Year 4||Year 5|
|Net Operating Profits||$44,611||$66,916||$89,221||$93,325||$97,618|
|Net Cash Flow||-$125,733||$44,611||$66,916||$89,221||$93,325||$390,473|
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 Fremont.
- median income
- gross rent
- population density
- household size
- July temperature
- November temperature
- land area
- family households
- May temperature
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.
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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 Fremont and its Consumers
Incorporated in 1956 as a merger of five localities, Fremont is the 14th largest city in California. The city is home to 200,000 inhabitants. Freemont is part of the combined metropolitan areas of San Jose, San Francisco, and Oakland, which has a population of about 7 million people. Fremont is located in the northern part of the state, about 35 miles southeast of San Francisco. Beginning as Mission San José in 1797, Fremont was an agricultural community in the 1800's. It grew rapidly during the Gold Rush of the mid 1800's, and again in the mid 1900's when General Motors built an automobile plant. Its most recent growth occurred in the 1980's and 1990's as it rode the high technology wave. In 1997 Fremont received the "All-America City Award" conferred by the National Civic League. Located within the Silicon Valley, Fremont has a large manufacturing base, much of it associated with electronics. Large employers include the NUMMI auto manufacturing plant, a General Motors/Toyota joint-venture, and Lam Research Corporation, a semiconductor processing equipment maker.
Incorporated in 1956 as a merger of five localities, Fremont is the 14th largest city in California. The city is home to 200,000 inhabitants. Freemont is part of the combined metropolitan areas of San Jose, San Francisco, and Oakland, which has a population of about 7 million people. Fremont is located in the northern part of the state, about 35 miles southeast of San Francisco. Beginning as...description source
Population Population (2012) 221,986 Population Density 2,865 ppl/sq mi Population Growth Rate 3.7% Median Income $92,655 Median Age 37.2 Unemployment 5.6% Family Household Percent 78.3% Avg. Household Size 3.0 Avg. House Price $587,000 Foreign Born 39.4% Married 27.8% Cost of Living 71.2%
Demographics White 26.0% Hispanic / Latino 17.5% Black / African American 3.8% Asian 48.5% Native American 0.3%
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.