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 $305,925.
Net Cash Flow over 5 years
|Year 0||Year 1||Year 2||Year 3||Year 4||Year 5|
|Net Operating Profits||$43,451||$65,176||$86,902||$90,991||$95,273|
|Net Cash Flow||-$79,776||$43,451||$65,176||$86,902||$90,991||$381,093|
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 Phoenix.
- July temperature
- August temperature
- median income
- gross rent
- land area
- population density
- February temperature
- business activity
- house price
- nearby population
Accounting firms or individuals that provide accounting, tax filing, or related financial services to clients.
3131 E Thunderbird Rd Ste 45 Phoenix, AZ 85032
5127 W Indian School Rd Phoenix, AZ 85031
10720 W Indian School Rd Ste 29 Phoenix, AZ 85037
5851 S Central Ave Phoenix, AZ 85040
Robert F. Hockensmith, CPA, PC
6232 N 7th St Ste 110 Phoenix, AZ 85014
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 Phoenix and its Consumers
Phoenix, the capital of Arizona and seat of Maricopa County, is the largest city in the state. It is located in the center of Arizona, on the Salt River. It is the largest city in Arizona, the hub of the rich agricultural region of the Salt River valley, and an important center for research and development, electronics, telecommunications, semiconductors, and the aerospace industry. Food processing and the production of aircraft parts, electrical appliances, agricultural chemicals, machinery, tools, plastic and wood products, cosmetics, and leather goods remains central to its manufacturing base. Greater Phoenix is a popular resort area, and tourism is also important to the economy. Phoenix grew as an important trade and distribution center. It boomed during World War II, when three airfields were opened. The phenomenal growth continued after the war; veterans who had been stationed in Phoenix returned to stay, and manufacturing concerns moved there to utilize the large labor supply. The expanding metropolitan area includes the suburbs of Mesa, Scottsdale, Tempe, Glendale, Chandler, and Peoria, all of which are among the fastest-growing cities in the United States.
Phoenix, the capital of Arizona and seat of Maricopa County, is the largest city in the state. It is located in the center of Arizona, on the Salt River. It is the largest city in Arizona, the hub of the rich agricultural region of the Salt River valley, and an important center for research and development, electronics, telecommunications, semiconductors, and the aerospace industry. Food...description source
Population Population (2012) 1,488,750 Population Density 2,881 ppl/sq mi Population Growth Rate 3.0% Median Income $43,960 Median Age 32.2 Unemployment 7.0% Family Household Percent 64.2% Avg. Household Size 2.8 Avg. House Price $137,500 Foreign Born 23.1% Married 38.1% Cost of Living 48.1%
Demographics White 46.8% Hispanic / Latino 40.2% Black / African American 6.2% Asian 3.3% Native American 1.7%
Market & Regulatory Conditions For Arizona
Third parties rate Arizona'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 B- Cost of hiring a new employee B- Overall regulatory friendliness C+ Friendliness of health and safety regulations B- Friendliness of employment, labor, and hiring regulations B Friendliness of tax code C+ Friendliness of licensing regulations C Friendliness of environmental regulations C+ Friendliness of zoning regulations C Publicity of training programs D Publicity of networking programs B+ Current economic health of small business 22th/50 Change in revenue over past 12 months 20th/50 Forecast of small business's future economic health 26th/50Source: Thumbtack.com (2012)
Business Friendliness Overall Business Friendliness 13th/50 Cost of Doing Business 28th/50 Economy 15th/50 Infrastructure 8th/50 Workforce 2th/50 Quality of life 27th/50 Technology and innovation 19th/50 Business friendliness 16th/50 Education 50th/50 Cost of living 27th/50 Access to capital 5th/50Source: CNBC (2014)
Tax Friendliness Arizona Corporate Tax Rate 5.6% Avg Local Corporate Tax Rate in Arizona 2.6% Avg Combined Corporate Tax Rate 8.2% Overall tax friendliness 23th/50 Corporate tax rank 24th/50 Individual income tax rank 19th/50 Sales tax rank 49th/50 Unemployment insurance tax rank 4th/50 Property tax rank 6th/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.