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 $254,924.
Net Cash Flow over 5 years
|Year 0||Year 1||Year 2||Year 3||Year 4||Year 5|
|Net Operating Profits||$35,775||$53,663||$71,551||$74,880||$78,364|
|Net Cash Flow||-$62,464||$35,775||$53,663||$71,551||$74,880||$313,457|
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 Lafayette.
- median income
- gross rent
- population density
- July temperature
- November temperature
- household size
- May temperature
- land area
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About Lafayette and its Consumers
Lafayette is a city located along the Vermilion River in southwestern Louisiana. The city of Lafayette is the fourth-largest in the state, with a population of 120,623 at the 2010 census. The combined statistical area of LafayetteOpelousas-Morgan City was 611,774 according to 2012 estimates. Lafayette is the parish seat of Lafayette Parish, Louisiana. Its nickname is The Hub City. The European-American city was founded as Vermilionville in 1821 by Jean Mouton, a French-speaking man of Acadiandescent. In 1884, it was renamed for General Lafayette, who fought with and significantly aided the American Army during theAmerican Revolutionary War. The city's economy was primarily based on agriculture until the 1940s, when the petroleum and natural gas industries became dominant. Lafayette is considered the center of Acadiana, the area of Cajun culture in Louisiana and the United States. It developed after Acadians were relocated here following their expulsion by the British from eastern Canada in the late 18th century following the defeat of France in the Seven Years' War.
Lafayette is a city located along the Vermilion River in southwestern Louisiana. The city of Lafayette is the fourth-largest in the state, with a population of 120,623 at the 2010 census. The combined statistical area of LafayetteOpelousas-Morgan City was 611,774 according to 2012 estimates. Lafayette is the parish seat of Lafayette Parish, Louisiana. Its nickname is The Hub City. The...description source
Population Population (2012) 122,761 Population Density 2,493 ppl/sq mi Population Growth Rate 1.8% Median Income $41,546 Median Age 34.1 Unemployment 5.4% Family Household Percent 58.0% Avg. Household Size 2.4 Avg. House Price $171,900 Foreign Born 3.7% Married 41.7% Cost of Living 45.8%
Demographics White 61.7% Hispanic / Latino 3.8% Black / African American 30.9% Asian 1.8% Native American 0.3%
Market & Regulatory Conditions For Louisiana
Third parties rate Louisiana's business and regulatory conditions according to their own methods. We report them here for informational purposes.
Small-Business Friendliness Overall small business friendliness A Ease of starting a small business A Cost of hiring a new employee D Overall regulatory friendliness A+ Friendliness of health and safety regulations A- Friendliness of employment, labor, and hiring regulations A Friendliness of tax code A- Friendliness of licensing regulations A+ Friendliness of environmental regulations A Friendliness of zoning regulations A+ Publicity of training programs A Publicity of networking programs A+ Current economic health of small business 5th/50 Change in revenue over past 12 months 14th/50 Forecast of small business's future economic health 16th/50Source: Thumbtack.com (2012)
Business Friendliness Overall Business Friendliness 40th/50 Cost of Doing Business 3th/50 Economy 44th/50 Infrastructure 36th/50 Workforce 26th/50 Quality of life 47th/50 Technology and innovation 36th/50 Business friendliness 39th/50 Education 44th/50 Cost of living 4th/50 Access to capital 47th/50Source: CNBC (2014)
Tax Friendliness Louisiana Corporate Tax Rate 4.0% Avg Local Corporate Tax Rate in Louisiana 4.9% Avg Combined Corporate Tax Rate 8.9% Overall tax friendliness 35th/50 Corporate tax rank 23th/50 Individual income tax rank 27th/50 Sales tax rank 50th/50 Unemployment insurance tax rank 6th/50 Property tax rank 24th/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.