Market Research Report
Based on the parameters below, we project this business would break even in 2.0 years with a net present value of $205,133.
Net Cash Flow over 5 years
|Year 0||Year 1||Year 2||Year 3||Year 4||Year 5|
|Net Operating Profits||$30,148||$45,222||$60,296||$62,555||$64,899|
|Net Cash Flow||-$59,753||$30,148||$45,222||$60,296||$62,555||$259,596|
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 Madison.
- median income
- July temperature
- August temperature
- gross rent
- population density
- house price
- land area
- business activity
- nearby population
Accounting firms or individuals that provide accounting, tax filing, or related financial services to clients.
1240 S Park St Madison, WI 53715
1860 E Washington Ave Madison, WI 53704
KMA Bodilly CPAs & Consultants SC
1200 John Q Hammons Dr Madison, WI 53717
Villard & Associates CPA
2453 Atwood Ave #210 Madison, WI 53704
Porter & Sack CPAs SC
6515 Watts Rd Suite 200 Madison, WI 53719
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About Madison and its Consumers
Madison is the capital of the U.S. state of Wisconsin and the county seat of Dane County. As of July 1, 2012, Madison had an estimated population of 240,323, making it the second largest city in Wisconsin, after Milwaukee, and the 83rd largest in the United States. The city forms the core of the United States Census Bureau's Madison Metropolitan Statistical Area, which includes all of Dane County and neighboring Iowa and Columbia counties. The Madison Metropolitan Statistical Area had a 2010 population of 568,593. Wisconsin state government and the University of WisconsinMadison remain the two largest Madison employers. However, Madison's economy today is evolving from a government-based economy to a consumer services and high-tech base, particularly in the health, biotech and advertising sectors.Much of the expansion has occurred on the city's south and west sides, but it has also affected the east side near the Interstate 39-90-94 interchange and along the northern shore of Lake Mendota. Underpinning the boom is the development of high-tech companies, many fostered by UWMadison working with local businesses and entrepreneurs to transfer the results of academic research into real-world applications, especially bio-tech applications.
Madison is the capital of the U.S. state of Wisconsin and the county seat of Dane County. As of July 1, 2012, Madison had an estimated population of 240,323, making it the second largest city in Wisconsin, after Milwaukee, and the 83rd largest in the United States. The city forms the core of the United States Census Bureau's Madison Metropolitan Statistical Area, which includes all of Dane...description source
Population Population (2012) 240,323 Population Density 3,129 ppl/sq mi Population Growth Rate 3.1% Median Income $53,363 Median Age 30.7 Unemployment 5.0% Family Household Percent 46.7% Avg. Household Size 2.2 Avg. House Price $213,900 Foreign Born 9.4% Married 47.7% Cost of Living 52.0%
Demographics White 74.7% Hispanic / Latino 7.7% Black / African American 6.2% Asian 8.0% Native American 0.4%
Market & Regulatory Conditions For Wisconsin
Third parties rate Wisconsin's business and regulatory conditions according to their own methods. We report them here for informational purposes.
Small-Business Friendliness Overall small business friendliness C+ Ease of starting a small business C+ Cost of hiring a new employee C Overall regulatory friendliness C- Friendliness of health and safety regulations D Friendliness of employment, labor, and hiring regulations C- Friendliness of tax code C Friendliness of licensing regulations B- Friendliness of environmental regulations C Friendliness of zoning regulations D+ Publicity of training programs C Publicity of networking programs D+ Current economic health of small business 14th/50 Change in revenue over past 12 months 22th/50 Forecast of small business's future economic health 41th/50Source: Thumbtack.com (2012)
Business Friendliness Overall Business Friendliness 17th/50 Cost of Doing Business 26th/50 Economy 22th/50 Infrastructure 10th/50 Workforce 40th/50 Quality of life 24th/50 Technology and innovation 20th/50 Business friendliness 25th/50 Education 10th/50 Cost of living 23th/50 Access to capital 37th/50Source: CNBC (2014)
Tax Friendliness Wisconsin Corporate Tax Rate 5.0% Avg Local Corporate Tax Rate in Wisconsin 0.4% Avg Combined Corporate Tax Rate 5.4% Overall tax friendliness 43th/50 Corporate tax rank 33th/50 Individual income tax rank 43th/50 Sales tax rank 14th/50 Unemployment insurance tax rank 27th/50 Property tax rank 31th/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.