Market Research Report
Based on the parameters below, we project this business would break even in 1.9 years with a net present value of $462,738.
Net Cash Flow over 5 years
|Year 0||Year 1||Year 2||Year 3||Year 4||Year 5|
|Net Operating Profits||$65,086||$97,629||$130,172||$138,005||$146,310|
|Net Cash Flow||-$123,143||$65,086||$97,629||$130,172||$138,005||$585,240|
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 McKinney.
- median income
- gross rent
- population density
- July temperature
- household size
- November temperature
- land area
- May temperature
- family households
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About McKinney and its Consumers
McKinney is a city in and the county seat of Collin County, Texas, United States, and the second in population to Plano. According to the U.S. Census Bureau, the city's 2010 population was 131,117 making it the nineteenth most populous city in the state of Texas. It is part of the Dallas-Fort Worth metroplex, and is located about 31 mi (50 km) north of Dallas. The Census Bureau listed McKinney as the nation's fastest growing city from 2000 to 2003 and again in 2006, among cities with more than 50,000 people. In 2007 it was ranked second-fastest growing among cities with more than 100,000 people and in 2008 as third-fastest. The most recent population estimate, as of January 1, 2014, is 149,082. Between 1970 and 1990, McKinney experienced moderate population growth, from 15,193 in the 1970 census, to 21,283 in the 1990 census. Since then, McKinney's rate of increase has been much more dramatic. In the 2000 census, McKinney had grown to 54,369 and to 131,117 in the 2010 census
McKinney is a city in and the county seat of Collin County, Texas, United States, and the second in population to Plano. According to the U.S. Census Bureau, the city's 2010 population was 131,117 making it the nineteenth most populous city in the state of Texas. It is part of the Dallas-Fort Worth metroplex, and is located about 31 mi (50 km) north of Dallas. The Census Bureau listed McKinney...description source
Population Population (2012) 143,223 Population Density 2,302 ppl/sq mi Population Growth Rate 9.2% Median Income $81,256 Median Age 32.7 Unemployment 6.4% Family Household Percent 76.6% Avg. Household Size 2.9 Avg. House Price $183,600 Foreign Born 10.4% Married 25.8% Cost of Living 49.6%
Demographics White 64.5% Hispanic / Latino 18.6% Black / African American 10.2% Asian 4.0% Native American 0.5%
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.