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 $246,218.
Net Cash Flow over 5 years
|Year 0||Year 1||Year 2||Year 3||Year 4||Year 5|
|Net Operating Profits||$37,033||$55,549||$74,065||$77,472||$81,036|
|Net Cash Flow||-$82,138||$37,033||$55,549||$74,065||$77,472||$324,144|
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 Victorville.
- median income
- gross rent
- population density
- household size
- July temperature
- land area
- November temperature
- family households
- May temperature
- February temperature
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About Victorville and its Consumers
The California city of Victorville is located at the southern edge of the Mojave Desert in the Victor Valley of western San Bernardino County. The city is situated 82 miles northeast of Los Angeles, and is surrounded by the nearby communities of Adelanto, Apple Valley, and Hesperia. Victorville is serviced principally by Interstate I-15 and California State Highway 18, with U.S. Route 395 located nearby. The community known as Victor was established in the late 19th century and named after Jacob Nash Victor, a construction superintendent for the California Southern Railroad. Primarily an agricultural community at that time, the area soon developed a burgeoning cement manufacturing industry due to the discovery of large deposits of limestone and granite in the region. In 1901, the community's name was changed by the U.S. Post Office to Victorville owing to confusion with the community of Victor, Colorado. The year 1926 saw the establishment of U.S. Route 66, a major national transportation artery linking Chicago, Illinois with California. A portion of this highway bisected Victorville and provided the community with a significant transportation corridor which lasted until Interstate I-15 was constructed. In 1962 the community of Victorville was incorporated as a city.
The California city of Victorville is located at the southern edge of the Mojave Desert in the Victor Valley of western San Bernardino County. The city is situated 82 miles northeast of Los Angeles, and is surrounded by the nearby communities of Adelanto, Apple Valley, and Hesperia. Victorville is serviced principally by Interstate I-15 and California State Highway 18, with U.S. Route 395...description source
Population Population (2012) 120,336 Population Density 1,644 ppl/sq mi Population Growth Rate 3.8% Median Income $45,847 Median Age 29.0 Unemployment 13.0% Family Household Percent 79.6% Avg. Household Size 3.4 Avg. House Price $133,000 Foreign Born 14.5% Married 36.7% Cost of Living 58.2%
Demographics White 28.3% Hispanic / Latino 47.8% Black / African American 16.0% Asian 3.7% Native American 0.7%
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.