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 $190,597.
Net Cash Flow over 5 years
|Year 0||Year 1||Year 2||Year 3||Year 4||Year 5|
|Net Operating Profits||$26,695||$40,042||$53,389||$55,490||$57,674|
|Net Cash Flow||-$44,420||$26,695||$40,042||$53,389||$55,490||$230,695|
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 Topeka.
- median income
- gross rent
- population density
- July temperature
- land area
- household size
- November temperature
- May temperature
- family households
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About Topeka and its Consumers
Topeka is the capital city of the State of Kansas and the county seat of Shawnee County. It is situated along the Kansas River in the central part of Shawnee County, located in northeast Kansas, in the Central United States. As of the 2010 census, the city population was 127,473. The Topeka Metropolitan Statistical Area, which includes Shawnee,Jackson, Jefferson, Osage, and Wabaunsee counties, had a population of 233,870 in the 2010 census. The meaning of Topeka is unknown and unrecorded. It is believed to be from the languages of the Kansa and the Ioway. As a placename, Topeka was first recorded in 1826 as the Kansa name for what is now called the Kansas River. Topeka's founders chose the name in 1855 because it "was novel, of Indian origin and euphonious of sound.The mixed-blood Kansa Indian,Joseph James, called Jojim, is credited with suggesting the name of Topeka.The city, laid out in 1854, was one of the Free-State towns founded by Eastern antislavery men immediately after the passage of the KansasNebraska Bill. In 1857, Topeka was chartered as a city.
Topeka is the capital city of the State of Kansas and the county seat of Shawnee County. It is situated along the Kansas River in the central part of Shawnee County, located in northeast Kansas, in the Central United States. As of the 2010 census, the city population was 127,473. The Topeka Metropolitan Statistical Area, which includes Shawnee,Jackson, Jefferson, Osage, and Wabaunsee counties,...description source
Population Population (2012) 127,939 Population Density 2,126 ppl/sq mi Population Growth Rate 0.4% Median Income $36,666 Median Age 35.6 Unemployment 7.8% Family Household Percent 56.9% Avg. Household Size 2.3 Avg. House Price $92,300 Foreign Born 4.8% Married 28.5% Cost of Living 43.6%
Demographics White 69.0% Hispanic / Latino 13.5% Black / African American 11.1% Asian 1.0% Native American 0.9%
Market & Regulatory Conditions For Kansas
Third parties rate Kansas'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 D+ Overall regulatory friendliness C+ Friendliness of health and safety regulations D+ Friendliness of employment, labor, and hiring regulations C Friendliness of tax code B- Friendliness of licensing regulations C+ Friendliness of environmental regulations D Friendliness of zoning regulations A- Publicity of training programs B Publicity of networking programs A Current economic health of small business 16th/50 Change in revenue over past 12 months 8th/50 Forecast of small business's future economic health 34th/50Source: Thumbtack.com (2012)
Business Friendliness Overall Business Friendliness 15th/50 Cost of Doing Business 26th/50 Economy 31th/50 Infrastructure 8th/50 Workforce 13th/50 Quality of life 25th/50 Technology and innovation 27th/50 Business friendliness 11th/50 Education 14th/50 Cost of living 24th/50 Access to capital 41th/50Source: CNBC (2014)
Tax Friendliness Kansas Corporate Tax Rate 6.2% Avg Local Corporate Tax Rate in Kansas 2.0% Avg Combined Corporate Tax Rate 8.2% Overall tax friendliness 22th/50 Corporate tax rank 38th/50 Individual income tax rank 18th/50 Sales tax rank 30th/50 Unemployment insurance tax rank 9th/50 Property tax rank 28th/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.