Market Research Report
Based on the parameters below, we project this business would break even in 2.2 years with a net present value of $283,427.
Net Cash Flow over 5 years
|Year 0||Year 1||Year 2||Year 3||Year 4||Year 5|
|Net Operating Profits||$42,235||$63,353||$84,471||$88,356||$92,421|
|Net Cash Flow||-$91,059||$42,235||$63,353||$84,471||$88,356||$369,682|
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 Santa Maria.
- median income
- gross rent
- population density
- household size
- November temperature
- July temperature
- family households
- land area
- May temperature
- February temperature
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About Santa Maria and its Consumers
Santa Maria is a city in Santa Barbara County, on the Southern California coast. It is approximately 120 miles (190 km) northwest of Los Angeles (city limits). The 2012 population was 101,459, putting it ahead of Santa Barbara (the county seat) for the first time and making it the most populous city in the county. The estimated population of the area is 171,227, which includes Santa Maria, the city of Guadalupe and the unincorporated township of Orcutt. The city is notable for its wine industry and Santa Maria-style barbecue. Sunset Magazine called Santa Maria "The Wests Best BBQ Town. According to the United States Census Bureau, the city has a total area of 22.4 square miles (58 km2), of which, 22.8 square miles (59 km2) of it is land and 0.6 square miles (1.6 km2) of it (2.73%) is water. Santa Maria is situated north of the unincorporated township of Orcutt, California, and south of the Santa Maria River (which serves as the line between Santa Barbara County andSan Luis Obispo County).
Santa Maria is a city in Santa Barbara County, on the Southern California coast. It is approximately 120 miles (190 km) northwest of Los Angeles (city limits). The 2012 population was 101,459, putting it ahead of Santa Barbara (the county seat) for the first time and making it the most populous city in the county. The estimated population of the area is 171,227, which includes Santa Maria, the...description source
Population Population (2012) 101,459 Population Density 4,458 ppl/sq mi Population Growth Rate 1.9% Median Income $50,532 Median Age 29.2 Unemployment 10.6% Family Household Percent 76.1% Avg. Household Size 3.7 Avg. House Price $252,400 Foreign Born 28.7% Married 40.2% Cost of Living 56.5%
Demographics White 22.4% Hispanic / Latino 68.3% Black / African American 0.6% Asian 6.7% Native American 0.9%
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.