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 $230,879.
Net Cash Flow over 5 years
|Year 0||Year 1||Year 2||Year 3||Year 4||Year 5|
|Net Operating Profits||$32,034||$48,051||$64,067||$67,572||$71,269|
|Net Cash Flow||-$55,803||$32,034||$48,051||$64,067||$67,572||$285,075|
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 Provo.
- median income
- gross rent
- population density
- household size
- July temperature
- land area
- November temperature
- family households
- May temperature
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About Provo and its Consumers
Provo is the third-largest city in the U.S. state of Utah, located about 43 miles (69 km) south of Salt Lake City along the Wasatch Front. Provo is the county seat of Utah County and is the largest city in Utah County. It lies between the cities of Orem to the north and Springville to the south. With a population at the 2010 census of 112,488,Provo is the principal city in the Provo-Orem metropolitan area, which had a population of 526,810 residents at the 2010 census. It is the third-largest metro area in the state behind Salt Lake City and Ogden-Clearfield. The city is home to Brigham Young University, a private higher education institution in the United States, which is operated by The Church of Jesus Christ of Latter-day Saints (LDS Church). Provo is also home to the largest Missionary Training Center for the LDS Church. The city is a key operational center for Novell and has been a focus area for technology development in Utah.
Provo is the third-largest city in the U.S. state of Utah, located about 43 miles (69 km) south of Salt Lake City along the Wasatch Front. Provo is the county seat of Utah County and is the largest city in Utah County. It lies between the cities of Orem to the north and Springville to the south. With a population at the 2010 census of 112,488,Provo is the principal city in the Provo-Orem...description source
Population Population (2012) 115,919 Population Density 2,781 ppl/sq mi Population Growth Rate 3.1% Median Income $36,831 Median Age 23.5 Unemployment 4.6% Family Household Percent 67.1% Avg. Household Size 3.2 Avg. House Price $196,300 Foreign Born 11.4% Married 45.7% Cost of Living 45.7%
Demographics White 72.9% Hispanic / Latino 19.1% Black / African American 0.9% Asian 3.2% Native American 0.2%
Market & Regulatory Conditions For Utah
Third parties rate Utah'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 A- Overall regulatory friendliness A- Friendliness of health and safety regulations A Friendliness of employment, labor, and hiring regulations B 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 B+ Current economic health of small business 8th/50 Change in revenue over past 12 months 7th/50 Forecast of small business's future economic health 3th/50Source: Thumbtack.com (2012)
Business Friendliness Overall Business Friendliness 3th/50 Cost of Doing Business 16th/50 Economy 6th/50 Infrastructure 28th/50 Workforce 12th/50 Quality of life 15th/50 Technology and innovation 18th/50 Business friendliness 4th/50 Education 46th/50 Cost of living 20th/50 Access to capital 1th/50Source: CNBC (2014)
Tax Friendliness Utah Corporate Tax Rate 5.9% Avg Local Corporate Tax Rate in Utah 0.7% Avg Combined Corporate Tax Rate 6.7% Overall tax friendliness 9th/50 Corporate tax rank 5th/50 Individual income tax rank 12th/50 Sales tax rank 19th/50 Unemployment insurance tax rank 22th/50 Property tax rank 4th/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.