Market Research Report
Based on the parameters below, we project this business would break even in 4.4 years with a net present value of $101,296.
Net Cash Flow over 5 years
|Year 0||Year 1||Year 2||Year 3||Year 4||Year 5|
|Net Operating Profits||$22,785||$34,178||$45,571||$47,667||$49,860|
|Net Cash Flow||-$100,734||$22,785||$34,178||$45,571||$47,667||$199,438|
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 Torrance.
- median income
- gross rent
- population density
- November temperature
- July temperature
- household size
- May temperature
- family households
- median resident age
- land area
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.
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Abrasive Blast Finishing Co.
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TIP: Your market is dominated by regional chains. Consider entering the market with an independant business or a national franchise.
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About Torrance and its Consumers
Torrance, California is a city of slightly over 140,000 residents. It is located in Los Angeles County, twenty-five minutes southwest of Los Angeles. Torrance is part of the Los Angeles'Long Beach'Santa Ana metropolitan area, which is the second largest in the United States with a population of over 12.9 million people. Torrance is close to Los Angeles, which was ranked among the thirty "Most Fun U.S. Cities" in a study conducted by Cranium, Inc. in 2004. Torrance experiences the famous Southern California weather. Temperatures are pleasant year-round, with summer average daily temperatures in the high seventies (degrees Fahrenheit) and winter temperatures in the high sixties (degrees Fahrenheit). Torrance, California provides easy access to all of the arts, cultural, and entertainment offerings of Los Angeles and Los Angeles County. In addition, some of Torrance's more notable arts and entertainment offerings include: The Del Amo Fashion Center, one of the largest malls in the United States, The Torrance Art Museum, Torrance Beach, The Torrance Civic Chorale, The Torrance Cultural Arts Center ,Torrance High School whose facade was used in the television programs Beverly Hills 90210 and Buffy the Vampire Slayer, The Torrance Theatre Company.
Torrance, California is a city of slightly over 140,000 residents. It is located in Los Angeles County, twenty-five minutes southwest of Los Angeles. Torrance is part of the Los Angeles'Long Beach'Santa Ana metropolitan area, which is the second largest in the United States with a population of over 12.9 million people. Torrance is close to Los Angeles, which was ranked among the thirty "Most...description source
Population Population (2012) 147,027 Population Density 7,179 ppl/sq mi Population Growth Rate 1.1% Median Income $73,744 Median Age 41.7 Unemployment 5.4% Family Household Percent 68.6% Avg. Household Size 2.6 Avg. House Price $605,100 Foreign Born 29.0% Married 29.8% Cost of Living 71.6%
Demographics White 41.2% Hispanic / Latino 17.5% Black / African American 2.8% Asian 33.7% Native American 0.1%
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.