mgmt600_teama_wk8finalpresentation
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MANAGEMENT TEAM
Sean McQueen – CEO
Jeffrey Banks – CFO
Annapaula Sizemore – COO
George Braga – Marketing Manager
PRESENTATION AGENDA
Business Concept
Company Mission
Investor opportunities
Market Assessment
Marketing Plan
Operations Plan
Financial Plan
Exit Strategy
BUSINESS CONCEPT OVERVIEW
With competitors outdoing others year after year, FitnessConnect
aims to build a commitment level within the target market; a level
that makes it even easier to commit to. Our idea, in its entirety, is
to provide a revolutionary Live In-home workout system
broadcasted straight from a home-based gym. This will provide
the flexibility to maintain a workout schedule no matter life’s daily
challenges. For those who are onsite, FitnessConnect offers free
health assessments and guides to healthy eating in addition to
expected services and amenities. No matter what life’s daily
challenges throw, FitnessConnect offers solutions to keep you on
track to a healthier you.
MISSION STATEMENT
“DELIVER A HIGHER QUALITY OF LIFE TO OUR CLIENTS BY
OFFERING A DISTINCT STYLE OF FITNESS TRAINING”
SLOGAN
“COMMIT TO BE FIT”
INVESTMENT PROPOSAL
A steady return on investment
An excellent management team
A solid business plan
Anticipated 41% ROI by the end of year 5
SOURCES OF FUNDING
$-
$100,000.00
$200,000.00
$300,000.00
$400,000.00
$500,000.00
$600,000.00
$700,000.00
Sean
McQueen
Jeffrey
Banks
Annapaula
Sizemore
George
Braga
Investors Total
Capital
$400,000 Needed to get business off the ground.
$80,000$40,000$40,000$40,000
$600,000
$400,000
MARKET SIZE & TRENDS
Burbank Population – 104,391 (U.S. Census )
Media Center : Warner Bros. Entertainment, Warner Music
Group, NBC Universal, The Walt Disney Company, ABC,
Cartoon Network, Nickelodeon, Cookie Jar Entertainment,
New Wave Entertainment, and Insomniac Games.
People who don’t mind spending more on convenience.
Population aged between 18-50 years old
Based on lifestyle & interests
PRIMARY MARKET
SECONDARY MARKET
Population over 51 years old
Education, income etc.
TARGETED MARKET
INDUSTRY DATA
YEAR REVENUE $ MILLION GROWTH %
2015 $ 27,339.2 3.1 %
2016 $ 28,225.2 3.2 %
2017 $ 29,014.0 2.8 %
2018 $ 29,913.4 3.1 %
2019 $ 30,511.7 2.0 %
REGULATORY REVIEW
Industry’s regulation-light
NBFE- National Board of Fitness Examiners:
1. Define and address scope of practice for fitness
professionals
2. Determine the standards of practice
COMPETITIVE ANALYSIS
In Burbank area - there are about 39 gym business focusing on
regular fitness programs
Three major competitors: LA|FITNESS , 24 HOUR FITNESS
AND EQUINOX
FitnessConnect – top of the line equipment, certified trainers,
excellent customer service
COMPETITIVE ANALYSISPRICE COMPARISON
$749.99
$1,499.99
$4,807.69
$-
$1,000.00
$2,000.00
$3,000.00
$4,000.00
$5,000.00
$6,000.00
Fitness Connect 24hr Fitness Equinox
Membership with Personal Trainer
SWOT Analysis
INTERNAL
STRENGTHS WEAKNESSES
Certified personal trainers and dietician
Top of the line equipment
Highest quality of service
Accessibility for everybody
Strong management team
Specialized fitness plans
No established customer base
Unknown brand name
First business venture
Limited startup costs
EXTERNAL
OPPORTUNITIES THREATS
Growing market
Group training
Internet, social media
Targeting new demographics
Outdoor activities
Wide spread competition
Equipment maintenance
Local and federal regulations
Insurance costs
Consumer confidence
SURVEY QUESTIONS AND RESULTS100 People Surveyed
1. What age group do you fall under?
a. 18 to 35 years old
b. 36 to 50 years old
c. 51 years and up
Answers: 48 % (A) // 33% (B) // 19 % (C)
2. How often do you go to the gym?
a. 1 time per week
b. 2-3 times per week
c. 5+ times per week
Answers: 57 % (A) // 21% (B) // 22 % (C)
3. Why do you go to the gym?
a. Lifestyle
b. Weight Loss
c. Health Improvement
d. Social Environment
Answers: 37 % (A) // 8 % (B) // 12 % (C) //43 % (D)
SURVEY QUESTIONS AND RESULTS100 People Surveyed
4. What are your preferred hours to visit the gym?
a.5 AM – 12 PM
b.12 PM – 6 PM
c.6 PM – 12 AM
Answers: 37% (5AM-12PM) // 5 % (12PM-6PM) // 48 % (6PM-12AM)
5. What is your preferred length of membership contract?
a. Month to Month
b. Semi-Annual Basis
c. Annual Basis
d. Not at all
Answers: 32 % (A) // 53 % (B) // 12 % (C) // 3% (D)
6. How likely would you pay extra for the convenience of an in house workout
service?
a. Very
b. Somewhat
c. Not very
d. Not at all
Answers: 42% (A) // 35 % (B) //14% (C) // 9 % (D)
MARKETING MIX
• Innovative live In-Home Fitness and Gym
Product
• Membership starting at $24.99/month
Price
• Burbank, California
• Direct Sales, advertising and Word of Mouth
Place Promotion
MARKET NEED & PRODUCT EXCLUSIVITY
Market Need
• People of Burbank are in need of extra
time to work out.
Product Exclusivity
• Live In-Home Workout
MARKETING STRATEGY
Focuses on the following:
• Elite Program
• Increase Customer Base
• Lifestyle Change
• Target Market and Increase Market
PRICING STRATEGY
Value Pricing
• Low Basic Membership to draw
in the masses
• In-Home flexibility
• More visits from personal
trainers for same price.
MARKETING
COMMUNICATION PLAN
Customize Marketing Channels
Brochures/Flyers
Signs/Billboards
Local News Papers
Social Media
Maintenance Housing
MARKETING BUDGET
Where the $16,512 is spent
Brochures/ Flyers
Signs Billboards
Local News Papers
Online
Maintenance
Hosting
1st Year Advertising Plan
2014 2015 2016 2017 2018
Brochures/Flyers $2,917 $2,917 $2917 $2917 $2917
Signs/Billboards $10,000 $10,000 $10,000 $10,000 $10,000
Local News Papers $1,095 $1,095 $1,095 $1,095 $1,095
Online $1,000 $1,000 $1,000 $1,000 $1,000
Maintenance Hosting $1,500 $1,500 $1,500 $1,500 $1,500
Annual Expense $16,512 $16,512 $16,512 $16,512 $16,512
• 601 Glenoaks Blvd unit # 400 Burbank CA 91502
• Class A office space : 4500SF
• Rental rate: $8,550.00/Month
• 8 Work stations for workout
• Kids area
• Group Fitness Studio
• Fitness Channels provided by Direct TV
• Security System
• Hours of Operation:
• Monday – Friday 5:00 AM to 11:00 PM
• Saturday 6:00 AM to 9:00 PM
• Sunday 7:00 AM to 8:00 PM
Front Desk Customer Service
Membership Sales
Tours
Packages and Prices
MembershipTrainers
Week Trial
Estimated Monthly Shop Expenses
Salaries and wages $14,320
Employee benefits $2,500
Payroll taxes $2,148
Marketing and advertising $1,376
Property Lease Agreement $8,550
Fitness Equipment (Lease basis) $1,600
Broadcast Service $0
Insurance (Fire, Customer Accidental Property Lost or Damage, etc.) $250
Telephone Service $100
Utilities $300
Office & Cleaning Supplies $50
Gym Maintenance $200
Information Technology $120
Total Expenses $31,514
CEO
Operations Manager
JanitorMaster of
Fitness
Trainer
Trainer
Trainer
Customer Service
Market Manager
Advertising
Sales Representative
Finance Manager
Cashier
Accountant
EMPLOYEES
NUMBER
OF
STAFF
MONTHLY
WAGESBENEFITS
PAYROLL
TAXES
Customer Service 2 $3,840 $833 $576
Master Of Fitness 1 $2,500 $417 $250
Trainers 3 7,500 $1250 $1,250
Janitorial 2 480 - $72
Accountant - - - -
Cashier - - - -
Advertising - - - -
Sales Representative - - - -
TOTAL $14,320 $2,500 $2,148
MONTHLY EMPLOYEES
EXPENSES
Electricity
Low/Medium
Network Failure
Medium/Low
Legal
Medium/Medium
Employee Injury High/Medium
Earthquake-High/High
FINANCIAL ASSUMPTIONS
Sales
• Upon opening, FitnessConnect will have 4 membership
levels
• We expect to fall inline with the industry growth
expectations of 3%
Financial
• In order to have FitnessConnect ready for business, our
startup costs will be $325,000
START UP FUNDING
$0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000
DUES - IHRSA
LEASE
CERTIFIED TRAINING FOR EMERGANCIES
RENOVATION
GYM EQUIPMENT
PERSONAL TRAINER CERTIFICATION - NASM
BUSINESS FURNITURE
1ST. YEAR'S SALARIES & WAGES
COMPUTERS AND INFORMATION TECH
TOTAL EXPENSES
$550
$8,550
$1,200
$20,000
$85,000
$3,000
$20,000
$171,840
$15,000
$325,140
STARTUP COSTS - FITNESSCONNECT
SALES FORECAST
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
2015 2016 2017 2018 2019
$368,830
$621,976
$866,993
$1,063,736
$1,276,612
PROJECTED SALES
STATEMENT OF CASH FLOW
Cash Flow 2015 2016 2017 2018 2019
TOTAL TOTAL TOTAL TOTAL TOTAL
CASH RECEIPTS
Income from Sales
Cash Sales $ 368,830 $ 621,976 $ 866,993 $ 1,063,736 $ 1,276,612
Collections $ - $ - $ - $ - $ -
Total Cash from Sales $ 368,830 $ 621,976 $ 866,993 $ 1,063,736 $ 1,276,612
Income from Financing
Interest Income $ 4,447 $ 5,169 $ 7,044 $ 10,178 $ 17,281
Loan Proceeds $ - $ - $ - $ - $ -
Equity Capital Investments $ 400,000 $ - $ - $ - $ -
Total Cash from Financing $ 404,447 $ 5,169 $ 7,044 $ 10,178 $ 17,281
Other Cash Receipts $ - $ - $ - $ - $ -
TOTAL CASH RECEIPTS $ 773,277 $ 627,144 $ 874,037 $ 1,073,914 $ 1,293,893
CASH DISBURSEMENTS
Operating Expenses $ 479,928 $ 468,059 $ 617,400 $ 658,019 $ 673,506
Capital Purchases $ - $ - $ - $ - $ -
Loan Payments $ - $ - $ - $ - $ -
Income Tax Payments $ - $ - $ - $ - $ -
Investor Dividend Payments $ 40,000 $ 40,000 $ 40,000 $ 40,000 $ 40,000
Owner's Draw $ - $ - $ - $ - $ -
TOTAL CASH DISBURSEMENTS $ 519,928 $ 508,059 $ 657,400 $ 698,019 $ 713,506
NET CASH FLOW $ 253,349 $ 119,085 $ 216,637 $ 375,895 $ 580,386
Opening Cash Balance $ 485,686 $ 587,253 $ 746,286 $ 1,079,165 $ 1,164,966
Cash Receipts $ 39,058 $ 65,953 $ 235,185 $ 289,118 $ 1,293,893
Cash Disbursements $ 71,394 $ 80,772 $ 192,400 $ 203,317 $ 713,506
ENDING CASH BALANCE $ 453,349 $ 572,434 $ 789,071 $ 1,164,966 $ 1,745,352
INCOME STATEMENT
Statement of Income 2015 2016 2017 2018 2019
TOTAL TOTAL TOTAL TOTAL TOTAL
INCOME
Gross Sales $ 368,830 $ 621,976 $ 866,993 $ 1,063,736 $ 1,276,612
(Commissions) $ - $ - $ - $ - $ -
(Returns and allowances) $ - $ - $ - $ - $ -
Net Sales $ 368,830 $ 621,976 $ 866,993 $ 1,063,736 $ 1,276,612
(Cost of Goods) $ - $ - $ - $ - $ -
GROSS PROFIT $ 368,830 $ 621,976 $ 866,993 $ 1,063,736 $ 1,276,612
EXPENSES - General and Administrative
Salaries and wages $ 171,840 $ 232,128 $ 256,620 $ 287,403 $ 320,061
Employee benefits $ 30,000 $ 47,250 $ 165,375 $ 173,644 $ 60,775
Payroll taxes $ 25,776 $ 34,819 $ 38,493 $ 43,110 $ 135,758
Marketing and advertising $ 16,512 $ 16,512 $ 16,512 $ 16,512 $ 16,512
Rent $ 102,600 $ 102,600 $ 102,600 $ 102,600 $ 102,600
Fitness Equipment $ 102,600 $ 19,200 $ 19,200 $ 19,200 $ 19,200
Dues and Certification Fees $ 4,800 $ 1,750 $ 4,800 $ 1,750 $ 4,800
Broadcast Services $ - $ - $ - $ - $ -
Office Furniture $ 20,000 $ - $ - $ - $ -
Insurance $ 3,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000
Telephone service $ 1,200 $ 1,200 $ 1,200 $ 1,200 $ 1,200
Utilities $ 3,600 $ 3,600 $ 3,600 $ 3,600 $ 3,600
Office supplies $ 600 $ 600 $ 600 $ 600 $ 600
Gym Maintenance $ 2,400 $ 2,400 $ 2,400 $ 2,400 $ 2,400
Information Technologies $ 15,000 $ 3,000 $ 3,000 $ 3,000 $ 3,000
TOTAL EXPENSES $ 499,928 $ 468,059 $ 617,400 $ 658,019 $ 673,506
Net income before taxes $ (131,098) $ 153,916 $ 249,593 $ 405,717 $ 603,106
Provision for taxes on income $ - $ 43,097 $ 69,886 $ 113,601 $ 168,870
NET PROFIT $ (131,098) $ 110,820 $ 179,707 $ 292,116 $ 434,236
FIVE YEAR BALANCE SHEET
Balance Sheet
FitnessConnect
2015 2016 2017 2018 2019
ASSETS
Current Assets
Cash $453,349 $573,434 $789,071 $1,164,966 $1,745,352
Accounts Receivable $0 $0 $0 $0 $0
Other Current Assets $0 $0 $0 $0 $0
Total Current Assets $453,349 $573,434 $789,071 $1,164,966 $1,745,352
Fixed Assets
Facilities $0 $0 $0 $0 $0
Equipment $102,600 $102,600 $102,600 $102,600 $102,600
Computers & Technologies $0 $0 $0 $0 $0
Office Furniture $20,000 $20,000 $20,000 $20,000 $20,000
Total Fixed Assets $122,600 $122,600 $122,600 $122,600 $122,600
Other Assets $0 $0 $0 $0 $0
TOTAL ASSETS $575,949 $695,034 $911,671 $1,287,566 $1,867,952
LIABILITIES
Current Liabilities
Short-Term Notes Payable $0 $0 $0 $0 $0
Income Taxes Due $0 $43,097 $112,983 $226,583 $395,453
Other Current Liabilities $0 $0 $0 $0 $0
Total Current Liabilities $0 $43,097 $112,983 $226,583 $395,453
Long-Term Liabilities
Long-Term Notes Payable $0 $0 $0 $0 $0
Other Long-Term Liabilities $0 $0 $0 $0 $0
Total Long-Term Liabilities $0 $0 $0 $0 $0
NET WORTH
Paid-In Capital $600,000 $600,000 $600,000 $600,000 $600,000
Retained Earnings ($24,051) $51,938 $198,688 $460,983 $872,500
Total Net Worth $575,949 $651,938 $798,688 $1,060,983 $1,472,500
TOTAL LIABILITIES AND NET WORTH $575,949 $695,034 $911,671 $1,287,566 $1,867,952
BREAK-EVEN ANALYSIS
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
Oct-
14
Nov-1
4
Dec-1
4
Jan-1
5
Feb
-1
5
Mar-
15
Apr-
15
May-15
Jun-15
Jul-
15
Aug-15
Sep
-1
5
Oct-
15
Nov-1
5
Dec-1
5
Jan-1
6
Feb
-1
6
SALES
EXPENSES
VALUATION
Gordon Model Approach
• At the end of year five, the business is projected to have
a value over $4.8 million dollars.
Asset Valuation Approach
• Under the Asset Valuation approach, business value at
the end of year five is $1.9 million dollars.
TERMS OF PAYBACK
For the investor: The management team has projected that at
the end of year 5, a return on investment of 41%
In the below chart will also show other key ratios for the first 5 years.
Key Ratios
Year 1 (2015-2016)
Working
Capital Current Ratio Quick Ratio
Cash
Turnover
Debt to
Equity
Return on
Investment
Return on
Sales
Return on
Assets
1st Quarter $481,547 N.A. N.A. 0.16 0.00 -30% -179% -30%
2nd Quarter $476,224 N.A. N.A. 0.18 0.00 -1% -7% -1%
3rd Quarter $477,471 2,612.82 2,612.82 0.20 0.00 0% 0% 0%
4th Quarter $453,349 N.A. N.A. 0.24 0.00 3% 13% 3%
Year 2 (2016-2017) $529,338 13.28 13.28 1.18 0.07 24% 25% 22%
Year 3 (2017-2018) $676,088 6.98 6.98 1.28 0.14 31% 29% 27%
Year 4 (2018-2019) $938,383 5.14 5.14 1.13 0.21 38% 38% 32%
Year 5 (2019-2020) $1,349,900 4.41 4.41 0.95 0.27 41% 47% 32%
EXIT STRATEGY
We offer you a choice at the end of year five:
• We can provide a cash buyout of your investment with a
30%plus over principal along with your end of year annual
investment interest payment.
• The second choice is to bring you onboard as a silent
partner as we would gear up to open a second location in
the Southern California area.
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