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 $233,648.
Net Cash Flow over 5 years
|Year 0||Year 1||Year 2||Year 3||Year 4||Year 5|
|Net Operating Profits||$33,561||$50,341||$67,121||$70,161||$73,339|
|Net Cash Flow||-$63,698||$33,561||$50,341||$67,121||$70,161||$293,356|
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 Richmond.
- 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.
Horizon Forest Products
11100 Smoketree Dr Richmond, VA 23236
Virginia Abrasives Corp
2851 Service Rd Petersburg, VA 23805
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About Richmond and its Consumers
Richmond is the capital of the Commonwealth of Virginia, in the United States. It is the center of the Richmond Metropolitan Statistical Area (MSA) and the Greater Richmond Region. Richmond is located at the fall line of the James River, 44 miles (71 km) west of Williamsburg, 66 miles (106 km) east of Charlottesville, and 98 miles (158 km) south of Washington, D.C. Surrounded by Henrico and Chesterfield counties, the city is located at the intersections of Interstate 95 and Interstate 64, and encircled by Interstate 295 and Virginia State Route 288. Major suburbs include Midlothian to the southwest, Glen Allen to the north and west, Short Pump to the west and Mechanicsville to the northeast. Richmond's economy is primarily driven by law, finance, and government, with federal, state, and local governmental agencies, as well as notable legal and banking firms, located in the downtown area. The city is home to both the United States Court of Appeals for the Fourth Circuit, one of 13 United States courts of appeals, and the Federal Reserve Bank of Richmond, with others in the metropolitan area.Tourism is also important, as many historic sites are in or near the city.
Richmond is the capital of the Commonwealth of Virginia, in the United States. It is the center of the Richmond Metropolitan Statistical Area (MSA) and the Greater Richmond Region. Richmond is located at the fall line of the James River, 44 miles (71 km) west of Williamsburg, 66 miles (106 km) east of Charlottesville, and 98 miles (158 km) south of Washington, D.C. Surrounded by Henrico and...description source
Population Population (2012) 210,309 Population Density 3,516 ppl/sq mi Population Growth Rate 3.0% Median Income $38,926 Median Age 32.2 Unemployment 8.3% Family Household Percent 47.4% Avg. Household Size 2.2 Avg. House Price $193,300 Foreign Born 6.0% Married 49.6% Cost of Living 49.8%
Demographics White 39.7% Hispanic / Latino 6.3% Black / African American 48.9% Asian 2.4% Native American 0.1%
Market & Regulatory Conditions For Virginia
Third parties rate Virginia'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 B+ 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 B Publicity of training programs A- Publicity of networking programs A- Current economic health of small business 39th/50 Change in revenue over past 12 months 26th/50 Forecast of small business's future economic health 12th/50Source: Thumbtack.com (2012)
Business Friendliness Overall Business Friendliness 8th/50 Cost of Doing Business 30th/50 Economy 29th/50 Infrastructure 19th/50 Workforce 10th/50 Quality of life 22th/50 Technology and innovation 10th/50 Business friendliness 5th/50 Education 9th/50 Cost of living 32th/50 Access to capital 19th/50Source: CNBC (2014)
Tax Friendliness Virginia Corporate Tax Rate 5.3% Avg Local Corporate Tax Rate in Virginia 0.3% Avg Combined Corporate Tax Rate 5.6% Overall tax friendliness 27th/50 Corporate tax rank 6th/50 Individual income tax rank 39th/50 Sales tax rank 6th/50 Unemployment insurance tax rank 37th/50 Property tax rank 26th/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.