Market Feasibility

Market Feasibility Study

Financial Planning

My group and I are trying to open up a financial planning business in the

area. Financial planning is a very profitable and rising industry, as countless people

ranging from blue collar workers trying to put money away for their children or their

retirements to wealthy doctors and lawyers trying to maintain and grow their assets for

their families' futures. Needless to say, the financial planning industry is indispensable.

No matter how optimistic I may be about this business venture, many economic, social,

political, and geographical trends will have to be looked at and analyzed in order to

properly figure out where to place this business to maximize profit as well as influence.

A service industry such as financial planning is one that is important

enough where even an economic recession would not significantly hinder demand for that

service - in fact, it may even raise the demand, though the field of possible clients might

slim down a bit. However, in any case, the national economy has been doing rather well

on an increasing scale. The unemployment rate is expected to be around 5.1% by next

year. The president's economic team is projecting economic growth of 3.5%, and the

popular consensus among economists is that consumer prices will only rise about 2.2%.

Good news to investors, including many potential clients, is that the yield for 10-year

Treasury bonds will increase this week from 4.3% to 5.1%. Of possible concern is the

volatile housing market.

The national economy is always good to look at, but perhaps more

important is the economic situation in Morris County, where I would try to start my

business. I chose Morris County because having lived here for a few years, and having

been all around the county, I have noticed it is generally a very affluent county, with a

large market for financial planning. Looking at the current data, I was right about its

affluence: the median household income in Morris County is a very impressive $78,000.

But besides the current economic status of the county, I would need to look at

demographics and trends of all sorts that might affect the business. Current

unemployment hovers around 4% in the area, and total population in the county increased

11.6% from 1990 to 2000 according the last census. Not only that, but Morris County's

elderly population, people age 65 or older, has increased 23% in that time to about 55,000

people out of the almost 500,000 residents of Morris. Retirees, or people about to retire,

are always a good target for financial advising. About half of Morris County's

population (25 or older) has a college degree, and 17% of the total population has a

graduate degree. That's about 250,000 college graduates, 85,000 with graduate degrees.

Also, among those aged 25 and older, at least 91% have a high school degree.

Obviously, this is a very large market of potential present and future wealth, and most of

these statistics are well above the national average per county, and needless to say above

most other NJ counties.

I feel Morris would be a good place to set up shop as well because of its

reputation as a business and financial center. An interesting fact is that 53 Fortune 500

companies have either a headquarters or a major facility in the county. This means plenty

of CEO's, other executives, and rising employees that could use a little financial advice.

Moody's Investor Services, as well as Standard's and Poor's, have given Morris County a

(AAA) bond rating for 30 consecutive years, the first NJ county to get that rating in 1975.

There is no reason to think all of these trends I have listed won't continue well beyond

2010 and beyond - corporate projects, increasing population, excellent school systems

developing college graduates with future wealth, etc. Morris County is definitely a great

place to start.

As far as political trends go, many things right now can directly impact the

amount of disposable income people in the area will have. For instance, President Bush's

plan to privatize social security. Currently, the return on social security is about 2%.

Most members of the Senate and Congress already have their plans privatized, and earn

about 12%. Privatization could greatly boost potential