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 $264,089.
Net Cash Flow over 5 years
|Year 0||Year 1||Year 2||Year 3||Year 4||Year 5|
|Net Operating Profits||$37,787||$56,680||$75,573||$77,992||$80,487|
|Net Cash Flow||-$65,975||$37,787||$56,680||$75,573||$77,992||$321,950|
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 Independence.
- median income
- gross rent
- population density
- July temperature
- land area
- household size
- November temperature
- May temperature
- family households
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About Independence and its Consumers
Independence is the fourth-largest city in the U.S. state of Missouri. Independence lies within Jackson County, of which it is thecounty seat. Independence is a satellite city of Kansas City, Missouri, and is part of the Kansas City metropolitan area. In 2010, Independence had a total population of 116,830. Independence is known as the "Queen City of the Trails" because it was a point of departure of the California, Oregon andSanta Fe Trails. Independence is also noted as the hometown of President Harry S. Truman; the Truman Presidential Library and Museum is located in the city, and Truman and First Lady Bess Truman are buried here. Independence played an important role in the early history of the Latter Day Saint movement, and is home to the headquarters of several denominations of the Latter Day Saint movement, most notably the Community of Christ (formerly the Reorganized Church of Jesus Christ of Latter Day Saints), whose Temple is located there. Other Latter Day Saint denominations headquartered in the city include the Church of Christ (Temple Lot) and the Church of Jesus Christ (Cutlerite), among others.
Independence is the fourth-largest city in the U.S. state of Missouri. Independence lies within Jackson County, of which it is thecounty seat. Independence is a satellite city of Kansas City, Missouri, and is part of the Kansas City metropolitan area. In 2010, Independence had a total population of 116,830. Independence is known as the "Queen City of the Trails" because it was a point of...description source
Population Population (2012) 117,270 Population Density 1,511 ppl/sq mi Population Growth Rate 0.4% Median Income $41,487 Median Age 39.0 Unemployment 7.5% Family Household Percent 61.9% Avg. Household Size 2.4 Avg. House Price $95,900 Foreign Born 4.2% Married 25.9% Cost of Living 45.8%
Demographics White 82.2% Hispanic / Latino 7.7% Black / African American 5.4% Asian 1.0% Native American 0.5%
Market & Regulatory Conditions For Missouri
Third parties rate Missouri'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 C+ Overall regulatory friendliness C+ Friendliness of health and safety regulations C- Friendliness of employment, labor, and hiring regulations C+ Friendliness of tax code B- Friendliness of licensing regulations C+ Friendliness of environmental regulations C- Friendliness of zoning regulations C- Publicity of training programs C- Publicity of networking programs C- Current economic health of small business 37th/50 Change in revenue over past 12 months 38th/50 Forecast of small business's future economic health 13th/50Source: Thumbtack.com (2012)
Business Friendliness Overall Business Friendliness 23th/50 Cost of Doing Business 11th/50 Economy 15th/50 Infrastructure 13th/50 Workforce 44th/50 Quality of life 48th/50 Technology and innovation 24th/50 Business friendliness 29th/50 Education 20th/50 Cost of living 18th/50 Access to capital 39th/50Source: CNBC (2014)
Tax Friendliness Missouri Corporate Tax Rate 4.2% Avg Local Corporate Tax Rate in Missouri 3.4% Avg Combined Corporate Tax Rate 7.6% Overall tax friendliness 17th/50 Corporate tax rank 4th/50 Individual income tax rank 29th/50 Sales tax rank 29th/50 Unemployment insurance tax rank 12th/50 Property tax rank 7th/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.