Market Research Report
Based on the parameters below, we project this business would break even in 2.6 years with a net present value of $60,375.
Net Cash Flow over 5 years
|Year 0||Year 1||Year 2||Year 3||Year 4||Year 5|
|Net Operating Profits||$9,733||$14,600||$19,467||$20,234||$21,032|
|Net Cash Flow||-$25,323||$9,733||$14,600||$19,467||$20,234||$84,126|
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 Birmingham.
- July temperature
- median income
- August temperature
- gross rent
- land area
- population density
- business activity
- house price
- February temperature
Accounting firms or individuals that provide accounting, tax filing, or related financial services to clients.
3017 27th St N Birmingham, AL 35207
6 Office Park Cir Birmingham, AL 35223
Kellum Wilson & Associates PC
3825 Lorna Rd Birmingham, AL 35244
Lee Alan Company LLC
62 Mt Laurel Ave Birmingham, AL 35242
Williams Gregory E CPA
5850 Valley Rd Ste 100 Birmingham, AL 35235
TIP: Your market is dominated by independant companies. Consider entering with a national or regional franchise.
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About Birmingham and its Consumers
Birmingham is the largest city in Alabama. The city is the county seat of Jefferson County. The city's population was 212,237 according to the 2010 United States Census.The Birmingham-Hoover Metropolitan Statistical Area had a population of about 1,128,047 according to the 2010 Census, which is approximately one quarter of Alabama's population. Birmingham's major industries were iron and steel production, plus a major component of the railroading industry, where rails and railroad cars were both manufactured in Birmingham. In the field of railroading, the two primary hubs of railroading in the Deep South were nearby Atlanta and Birmingham, beginning in the 1860s and continuing through to the present day. Though the manufacturing industry maintains a strong presence in Birmingham, other businesses and industries such as banking, telecommunications, transportation, electrical power transmission, medical care, college education, and insurance have risen in stature. Mining in the Birmingham area is no longer a major industry with the exception of coal mining. Birmingham ranks as one of the most important business centers in the Southeastern United States.
Birmingham is the largest city in Alabama. The city is the county seat of Jefferson County. The city's population was 212,237 according to the 2010 United States Census.The Birmingham-Hoover Metropolitan Statistical Area had a population of about 1,128,047 according to the 2010 Census, which is approximately one quarter of Alabama's population. Birmingham's major industries were iron and...description source
Population Population (2012) 212,038 Population Density 1,451 ppl/sq mi Population Growth Rate -0.1% Median Income $28,646 Median Age 35.5 Unemployment 7.6% Family Household Percent 55.0% Avg. Household Size 2.3 Avg. House Price $85,900 Foreign Born 4.1% Married 42.6% Cost of Living 46.4%
Demographics White 21.1% Hispanic / Latino 3.6% Black / African American 73.2% Asian 1.0% Native American 0.2%
Market & Regulatory Conditions For Alabama
Third parties rate Alabama'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 B+ Cost of hiring a new employee C+ Overall regulatory friendliness A Friendliness of health and safety regulations A Friendliness of employment, labor, and hiring regulations B+ Friendliness of tax code A Friendliness of licensing regulations A+ Friendliness of environmental regulations A- Friendliness of zoning regulations A Publicity of training programs A Publicity of networking programs A Current economic health of small business 23thth/50 Change in revenue over past 12 months 5th/50 Forecast of small business's future economic health 10th/50Source: Thumbtack.com (2012)
Business Friendliness Overall Business Friendliness 34th/50 Cost of Doing Business 4th/50 Economy 40th/50 Infrastructure 21th/50 Workforce 20th/50 Quality of life 46th/50 Technology and innovation 31th/50 Business friendliness 38th/50 Education 47th/50 Cost of living 7th/50 Access to capital 45th/50Source: CNBC (2014)
Tax Friendliness Alabama Corporate Tax Rate 4.0% Avg Local Corporate Tax Rate in Alabama 4.5% Avg Combined Corporate Tax Rate 8.5% Overall tax friendliness 28th/50 Corporate tax rank 27th/50 Individual income tax rank 23th/50 Sales tax rank 41th/50 Unemployment insurance tax rank 25th/50 Property tax rank 10th/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.