Market Research Report
Based on the parameters below, we project this business would break even in 2.5 years with a net present value of $294,859.
Net Cash Flow over 5 years
|Year 0||Year 1||Year 2||Year 3||Year 4||Year 5|
|Net Operating Profits||$46,576||$69,864||$93,152||$97,437||$101,920|
|Net Cash Flow||-$118,117||$46,576||$69,864||$93,152||$97,437||$407,678|
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 Pomona.
- median income
- gross rent
- population density
- household size
- July temperature
- November temperature
- family households
- May temperature
- land area
- February temperature
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About Pomona and its Consumers
Incorporated in 1888, Pomona is a city of over 150,000 people. Pomona is located in Los Angeles county and is part of the Los Angeles Long Beach Santa Ana metropolitan area, which is the second largest metropolitan area in the United States with a population of over 12.9 million people. Pomona is located in Southern California, about thirty minutes west of the City of Los Angeles. Pomona is named after the the ancient Roman goddess of fruit. Pomona is home to California State Polytechnic University, and the Los Angeles County fairgrounds. Pomona receives the sunny dry weather for which Southern California is so famous. July and August are the warmest months of the year with average daily temperatures in the high eighties (degrees Fahrenheit). The winter months see average daily temperatures in the high sixties (degrees Fahrenheit). Pomona's location close to the city of Los Angeles provide residents the opportunity to take advantage of all of the entertainment offerings of Los Angeles and Los Angeles county. Pomona does have entertainment offerings of its own.
Incorporated in 1888, Pomona is a city of over 150,000 people. Pomona is located in Los Angeles county and is part of the Los Angeles Long Beach Santa Ana metropolitan area, which is the second largest metropolitan area in the United States with a population of over 12.9 million people. Pomona is located in Southern California, about thirty minutes west of the City of Los Angeles. Pomona is...description source
Population Population (2012) 150,812 Population Density 6,570 ppl/sq mi Population Growth Rate 1.2% Median Income $47,229 Median Age 29.3 Unemployment 12.0% Family Household Percent 78.6% Avg. Household Size 3.8 Avg. House Price $252,900 Foreign Born 36.3% Married 43.6% Cost of Living 66.5%
Demographics White 14.2% Hispanic / Latino 68.6% Black / African American 7.9% Asian 8.1% Native American 0.2%
Market & Regulatory Conditions For California
Third parties rate California's business and regulatory conditions according to their own methods. We report them here for informational purposes.
Small-Business Friendliness Overall small business friendliness F Ease of starting a small business D Cost of hiring a new employee C- Overall regulatory friendliness F Friendliness of health and safety regulations F Friendliness of employment, labor, and hiring regulations F Friendliness of tax code F Friendliness of licensing regulations F Friendliness of environmental regulations D Friendliness of zoning regulations D Publicity of training programs C- Publicity of networking programs D+ Current economic health of small business 40th/50 Change in revenue over past 12 months 40th/50 Forecast of small business's future economic health 35th/50Source: Thumbtack.com (2012)
Business Friendliness Overall Business Friendliness 32th/50 Cost of Doing Business 48th/50 Economy 9th/50 Infrastructure 24th/50 Workforce 36th/50 Quality of life 23th/50 Technology and innovation 1th/50 Business friendliness 48th/50 Education 26th/50 Cost of living 47th/50 Access to capital 1th/50Source: CNBC (2014)
Tax Friendliness California Corporate Tax Rate 7.5% Avg Local Corporate Tax Rate in California 0.9% Avg Combined Corporate Tax Rate 8.4% Overall tax friendliness 48th/50 Corporate tax rank 34th/50 Individual income tax rank 50th/50 Sales tax rank 42th/50 Unemployment insurance tax rank 14th/50 Property tax rank 14th/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.