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 $128,061.
Net Cash Flow over 5 years
|Year 0||Year 1||Year 2||Year 3||Year 4||Year 5|
|Net Operating Profits||$17,501||$26,252||$35,003||$37,109||$39,342|
|Net Cash Flow||-$29,480||$17,501||$26,252||$35,003||$37,109||$157,369|
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 McAllen.
- median income
- gross rent
- population density
- July temperature
- November temperature
- household size
- May temperature
- land area
- family households
- February temperature
Suppliers & Service Providers Contact List
Get a great business loan today!
Get a business loan that suits your needs.
Get the business loan you need and want.
Free help for entrepreneurs
Our experienced entrepreneurs can help you reach your goals.
We provide free business mentoring for entrepreneurs.
Get business insurance for your venture
Find great rates on business insurance.
About McAllen and its Consumers
McAllen is a city located at the southern tip of Texas in an area known as the Rio Grande Valley. Only about five miles from the Mexican border, McAllen is situated along U.S. Route 83, which connects the Valley to West Texas. Other major highways servicing the city include U.S. Route 281 and Texas State Highway 107. Regional air transportation is available at Miller International Airport, which offers frequent daily flights to major hubs in Houston, Dallas and Mexico City. Developer John McAllen settled in the Rio Grande Valley in the late 1800s and established a town site in 1904 known as West McAllen. Shortly thereafter, other developers started a nearby town which they named East McAllen. The two groups eventually joined forces and in 1911 the City of McAllen was incorporated. Over the next several centuries, McAllen experienced steady growth and by the 1970s saw an increase in industrial trade and manufacturing brought about by activation of the Free Trade Zone (FTZ). The passing of the North American Free Trade Agreement (NAFTA) in the 1990s enhanced the impact of the FTZ, resulting in the creation of several thousand new jobs in both the U.S. and Reynosa, Mexico.
McAllen is a city located at the southern tip of Texas in an area known as the Rio Grande Valley. Only about five miles from the Mexican border, McAllen is situated along U.S. Route 83, which connects the Valley to West Texas. Other major highways servicing the city include U.S. Route 281 and Texas State Highway 107. Regional air transportation is available at Miller International Airport,...description source
Population Population (2012) 134,719 Population Density 2,786 ppl/sq mi Population Growth Rate 3.7% Median Income $35,348 Median Age 32.7 Unemployment 7.5% Family Household Percent 76.5% Avg. Household Size 3.1 Avg. House Price $109,000 Foreign Born 26.6% Married 28.4% Cost of Living 43.7%
Demographics White 11.7% Hispanic / Latino 84.6% Black / African American 0.6% Asian 2.5% Native American 0.09%
Market & Regulatory Conditions For Texas
Third parties rate Texas'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 B+ 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 C+ Publicity of networking programs C Current economic health of small business 13th/50 Change in revenue over past 12 months 29th/50 Forecast of small business's future economic health 17th/50Source: Thumbtack.com (2012)
Business Friendliness Overall Business Friendliness 2th/50 Cost of Doing Business 23th/50 Economy 1th/50 Infrastructure 1th/50 Workforce 11th/50 Quality of life 37th/50 Technology and innovation 2th/50 Business friendliness 20th/50 Education 27th/50 Cost of living 18th/50 Access to capital 5th/50Source: CNBC (2014)
Tax Friendliness Texas Corporate Tax Rate 6.3% Avg Local Corporate Tax Rate in Texas 1.9% Avg Combined Corporate Tax Rate 8.2% Overall tax friendliness 10th/50 Corporate tax rank 39th/50 Individual income tax rank 6th/50 Sales tax rank 36th/50 Unemployment insurance tax rank 15th/50 Property tax rank 36th/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.