Market Research Report
Based on the parameters below, we project this business would break even in 1.8 years with a net present value of $110,680.
Net Cash Flow over 5 years
|Year 0||Year 1||Year 2||Year 3||Year 4||Year 5|
|Net Operating Profits||$16,044||$24,067||$32,089||$32,859||$33,648|
|Net Cash Flow||-$28,270||$16,044||$24,067||$32,089||$32,859||$134,590|
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 Detroit.
- median income
- July temperature
- August temperature
- gross rent
- population density
- land area
- business activity
- house price
- nearby population
Accounting firms or individuals that provide accounting, tax filing, or related financial services to clients.
7750 W Vernor Hwy Detroit, MI 48209
16862 Schaefer Hwy Detroit, MI 48235
10378 Gratiot Ave Detroit, MI 48213
4501 Woodward Ave Ste 104B Detroit, MI 48201
2601 Gratiot Ave Detroit, MI 48207
TIP: Your market is dominated by national chains. Consider entering the market with an independant business or a regional franchise.
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About Detroit and its Consumers
Detroit, the largest city in Michigan, is situated in the southeast part of the state on the Detroit River. The seat of Wayne County, Detroit was incorporated as a city in 1815 and reincorporated in 1824. Detroit is the oldest city of any size west of the seaboard colonies, having been founded by Antoine de la Mothe Cadillac on July 24, 1701, more than a century before Chicago was founded. The French were the first settlers, and they gave the city its name from their word meaning strait, referring to the 27-mile-long Detroit River, which connects Lake Erie and Lake St. Clair. The river forms part of the international boundary, and marks the only point where Canada lies directly south of U.S. territory. Detroit is one of the largest manufacturing cities in the U.S. and is the center of the automobile manufacturing industry, which has experienced a decline due to foreign competition in the past decade. The health and medical care sector is important to the economy, and employment in the finance, insurance, and real-estate industries has inched up in the Detroit metropolitan area since the early 1990s.
Detroit, the largest city in Michigan, is situated in the southeast part of the state on the Detroit River. The seat of Wayne County, Detroit was incorporated as a city in 1815 and reincorporated in 1824. Detroit is the oldest city of any size west of the seaboard colonies, having been founded by Antoine de la Mothe Cadillac on July 24, 1701, more than a century before Chicago was founded. The...description source
Population Population (2012) 701,475 Population Density 5,055 ppl/sq mi Population Growth Rate -1.7% Median Income $25,193 Median Age 34.7 Unemployment 18.8% Family Household Percent 60.5% Avg. Household Size 2.6 Avg. House Price $50,200 Foreign Born 8.6% Married 52.3% Cost of Living 46.2%
Demographics White 8.1% Hispanic / Latino 7.3% Black / African American 81.4% Asian 1.1% Native American 0.2%
Market & Regulatory Conditions For Michigan
Third parties rate Michigan's business and regulatory conditions according to their own methods. We report them here for informational purposes.
Small-Business Friendliness Overall small business friendliness D Ease of starting a small business D+ Cost of hiring a new employee C- Overall regulatory friendliness D+ Friendliness of health and safety regulations C- Friendliness of employment, labor, and hiring regulations D+ Friendliness of tax code C- Friendliness of licensing regulations D+ Friendliness of environmental regulations D+ Friendliness of zoning regulations D+ Publicity of training programs C+ Publicity of networking programs B- Current economic health of small business 28th/50 Change in revenue over past 12 months 15th/50 Forecast of small business's future economic health 25th/50Source: Thumbtack.com (2012)
Business Friendliness Overall Business Friendliness 26th/50 Cost of Doing Business 31th/50 Economy 28th/50 Infrastructure 16th/50 Workforce 15th/50 Quality of life 45th/50 Technology and innovation 14th/50 Business friendliness 32th/50 Education 34th/50 Cost of living 17th/50 Access to capital 23th/50Source: CNBC (2014)
Tax Friendliness Michigan Corporate Tax Rate 6.0% Avg Local Corporate Tax Rate in Michigan 0.0% Avg Combined Corporate Tax Rate 6.0% Overall tax friendliness 13th/50 Corporate tax rank 10th/50 Individual income tax rank 14th/50 Sales tax rank 7th/50 Unemployment insurance tax rank 47th/50 Property tax rank 27th/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.