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 $251,449.
Net Cash Flow over 5 years
|Year 0||Year 1||Year 2||Year 3||Year 4||Year 5|
|Net Operating Profits||$35,433||$53,150||$70,866||$73,809||$76,874|
|Net Cash Flow||-$61,228||$35,433||$53,150||$70,866||$73,809||$307,498|
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 Little Rock.
- median income
- gross rent
- population density
- July temperature
- land area
- November temperature
- household size
- 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.
Little Rock Bolt & Supply Co., Inc.
11209 I-30 Little Rock, AR 72209
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About Little Rock and its Consumers
Little Rock is the capital and the largest city of the State of Arkansas. The Metropolitan Statistical Area (MSA) had a population of 724,385 people in the 2013 census estimate. The MSA is included in the Little Rock-North Little Rock, AR Combined Statistical Area, which had a population of 898,683 in the 2013 census estimate. As of the 2010 census, Little Rock had a city proper population of 193,524. It is the county seat of Pulaski County. Located near the geographic center of Arkansas, Little Rock derives its name from a small rock formation on the south bank of theArkansas River called la Petite Roche (French: "the little rock"). The "little rock" was used by early river traffic as a landmark and became a well-known river crossing. The "little rock" is across the river from "big rock," a large bluff at the edge of the river, which was once used as a rock quarry. There have been two ships of the United States Navy named after the city, including USS Little Rock
Little Rock is the capital and the largest city of the State of Arkansas. The Metropolitan Statistical Area (MSA) had a population of 724,385 people in the 2013 census estimate. The MSA is included in the Little Rock-North Little Rock, AR Combined Statistical Area, which had a population of 898,683 in the 2013 census estimate. As of the 2010 census, Little Rock had a city proper population of...description source
Population Population (2012) 196,537 Population Density 1,648 ppl/sq mi Population Growth Rate 1.6% Median Income $40,976 Median Age 35.2 Unemployment 7.2% Family Household Percent 58.3% Avg. Household Size 2.3 Avg. House Price $151,900 Foreign Born 6.4% Married 40.4% Cost of Living 45.3%
Demographics White 46.7% Hispanic / Latino 6.8% Black / African American 42.2% Asian 2.6% Native American 0.3%
Market & Regulatory Conditions For Arkansas
Third parties rate Arkansas'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 C- Overall regulatory friendliness B Friendliness of health and safety regulations B- Friendliness of employment, labor, and hiring regulations C Friendliness of tax code C+ Friendliness of licensing regulations A Friendliness of environmental regulations B+ Friendliness of zoning regulations B+ Publicity of training programs A Publicity of networking programs F Current economic health of small business 2th/50 Change in revenue over past 12 months 2th/50 Forecast of small business's future economic health 2th/50Source: Thumbtack.com (2012)
Business Friendliness Overall Business Friendliness 30th/50 Cost of Doing Business 2th/50 Economy 25th/50 Infrastructure 35th/50 Workforce 19th/50 Quality of life 41th/50 Technology and innovation 44th/50 Business friendliness 45th/50 Education 37th/50 Cost of living 2th/50 Access to capital 39th/50Source: CNBC (2014)
Tax Friendliness Arkansas Corporate Tax Rate 6.5% Avg Local Corporate Tax Rate in Arkansas 2.7% Avg Combined Corporate Tax Rate 9.2% Overall tax friendliness 39th/50 Corporate tax rank 40th/50 Individual income tax rank 28th/50 Sales tax rank 44th/50 Unemployment insurance tax rank 39th/50 Property tax rank 19th/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.