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 $170,943.
Net Cash Flow over 5 years
|Year 0||Year 1||Year 2||Year 3||Year 4||Year 5|
|Net Operating Profits||$24,226||$36,339||$48,452||$50,236||$52,086|
|Net Cash Flow||-$41,766||$24,226||$36,339||$48,452||$50,236||$208,345|
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 South Bend.
- median income
- gross rent
- population density
- July temperature
- household size
- land area
- November temperature
- May temperature
- family households
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About South Bend and its Consumers
The Indiana city of South Bend is situated in the extreme northern part of the state, only 5 miles from the Michigan border. The county seat of St. Joseph County, South Bend sits 95 miles east of Chicago, Illinois. Large nearby cities include Elkhart (15 miles to the east), Gary (65 miles to the west), Fort Wayne (85 miles to the southeast), and Benton Harbor, Michigan (36 miles to the north). Major highways servicing the city include Interstates 80 and 90, U.S. Routes 20 and 31, and Indiana State Highways 2, 23, and 933. South Bend is also famous as the home of the University of Notre Dame. Established in 1842 by the Very Rev. Edward Sorin, C.S.C. and six Catholic brothers, the University has since been an intrinsic part of the city with a great effect on its culture and economy. As the largest employer in the city, Notre Dame is estimated to be responsible for one out of every ten dollars circulated in the St. Joseph County area.
The Indiana city of South Bend is situated in the extreme northern part of the state, only 5 miles from the Michigan border. The county seat of St. Joseph County, South Bend sits 95 miles east of Chicago, Illinois. Large nearby cities include Elkhart (15 miles to the east), Gary (65 miles to the west), Fort Wayne (85 miles to the southeast), and Benton Harbor, Michigan (36 miles to the north)....description source
Population Population (2012) 100,800 Population Density 2,431 ppl/sq mi Population Growth Rate -0.4% Median Income $31,927 Median Age 33.6 Unemployment 11.7% Family Household Percent 59.2% Avg. Household Size 2.5 Avg. House Price $82,900 Foreign Born 8.7% Married 39.4% Cost of Living 45.2%
Demographics White 55.3% Hispanic / Latino 12.8% Black / African American 27.5% Asian 1.1% Native American 0.1%
Market & Regulatory Conditions For Indiana
Third parties rate Indiana's business and regulatory conditions according to their own methods. We report them here for informational purposes.
Small-Business Friendliness Overall small business friendliness B+ Ease of starting a small business B+ 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 A+ Friendliness of tax code B+ Friendliness of licensing regulations B+ Friendliness of environmental regulations B+ Friendliness of zoning regulations B+ Publicity of training programs C Publicity of networking programs D Current economic health of small business 29th/50 Change in revenue over past 12 months 13th/50 Forecast of small business's future economic health 14th/50Source: Thumbtack.com (2012)
Business Friendliness Overall Business Friendliness 19th/50 Cost of Doing Business 21th/50 Economy 30th/50 Infrastructure 7th/50 Workforce 27th/50 Quality of life 44th/50 Technology and innovation 25th/50 Business friendliness 11th/50 Education 15th/50 Cost of living 7th/50 Access to capital 37th/50Source: CNBC (2014)
Tax Friendliness Indiana Corporate Tax Rate 7.0% Avg Local Corporate Tax Rate in Indiana 0.0% Avg Combined Corporate Tax Rate 7.0% Overall tax friendliness 8th/50 Corporate tax rank 22th/50 Individual income tax rank 10th/50 Sales tax rank 10th/50 Unemployment insurance tax rank 7th/50 Property tax rank 5th/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.