Mountain Brook Fitness Center
Executive Summary
Opportunity
Problem
People in the area need to have a place where working out can be a family activity. Parents can bring children to be taken care of while they do whatever exercise activity they desire.
Solution
Mountain Brook Fitness Center will expand and create a larger childcare facility. In addition, new equipment will be purchased for the childcare center. The childcare center can currently care for 30 children but only five infants. The new facility will be able to handle up to 60 children including 15 infants. The childcare facility expansion will be funded with a short-term loan.
Market
Monroe is a city on the move. The population has grown by 15% each year for the past three years. The current population of Monroe is 600,000. Most importantly, the growth has been fueled by the increased employment in the city’s high-tech companies. This has attracted a type of professional that is the target customer for the Mountain Brook Fitness Center.
Competition
There are other gyms in the area. However, we are one of a kind since we are focused on families. They can come and do things together or do separate things and then grab lunch after.
Why Us?
The Mountain Brook Fitness Center is a thriving business-person’s club but is also one of the only family-focused clubs in the Monroe area. Fifty percent of our members are under the age of 45 and have young children. Currently, the center has 900 members. A center membership is $800 a year. The Mountain Brook Fitness Center wants to add an additional 300 members with families over the next three years.
Expectations
Forecast
Of course, our forecast depends on key assumptions, especially retention. We think, however, that we can launch and reach critical mass early enough to establish profitability from year 1.
Financial Highlights by Year
Opportunity
Problem & Solution
Problem Worth Solving
People in the area need to have a place where working out can be a family activity. Parents can bring children to be taken care of while they do whatever exercise activity they desire
Our Solution
Mountain Brook Fitness Center has the ability to offer reasonably priced childcare in a safe environment while a parent works out in the fitness center. The club has increased the size of its fitness center and added more equipment, but many members would be unable to use the center if they didn’t have a service to watch their children while they exercised. In fact, the service has become so popular that the clubhouse has outgrown its existing childcare facilities. Offering childcare has kept many members coming to the club. The lack of current space for a larger childcare area has even kept some prospective members from joining.
Target Market
Market Size & Segments
Market Analysis Summary
Monroe is a city on the move. The population has grown by 15% each year for the past three years. The current population of Monroe is 600,000. Most importantly, the growth has been fueled by the increased employment in the city’s high-tech companies. This has attracted a type of professional that is the target customer for the Mountain Brook Fitness Center.
4.1 Market Segmentation
The Mountain Brook Fitness Center will focus on the young urban professionals as its primary customer base.
Competition
Current Alternatives
There are other gyms in the area. However, we are one of a kind since we are focused on families. They can come and do things together or do separate things and then grab lunch after.
Our Advantages
The competitive edge of the Mountain Brook Fitness Center is our focus on the family. We offer our members childcare services that are second to none.
Execution
Marketing & Sales
Marketing Plan
Our marketing plan will include – signage, Facebook, Twitter, Instagram, Website – where we will have our trainer blogs/recommendations as well as our classes, and well-placed radio spots to get the attention of potential clients that are not social media savvy.
Sales Plan
The sales strategy is to highlight the childcare service to prospective center members. The focus will be marketing the center to young active families. Every Saturday morning will be an open house for the childcare center. Families will be able to visit the facility for the entire morning.
Operations
Locations & Facilities
The Mountain Brook Fitness Center is one of the only family-focused clubs in the Monroe area. The center has grown steadily over the past four years. Our clubhouse is 50,000 square feet and our new fitness center is 12,000 square feet. The Mountain Brook Fitness Center is located at 1234 Main Street in Monroe.
The Mountain Brook Fitness Center has the following activities and services:
- Swimming
- Tennis
- Fitness center with cardiovascular and weight training equipment
- Court sports
- Massage
- Physical therapy
- Childcare
The club is a 24-hours facility, seven days a week.
Milestones & Metrics
Milestones Table
| Milestone | Due Date | Who’s Responsible | |
|---|---|---|---|
|
Q1 plan vs. actual review
|
Apr 28, 2020 | Owners | |
|
Q2 plan vs. actual review
|
July 21, 2020 | Owners | |
|
Location selected
|
Sept 15, 2020 | Owners | |
|
Q3 plan vs. actual review
|
Oct 11, 2020 | Ownership | |
|
Location contracted
|
Oct 14, 2020 | ||
|
Ready to launch
|
Dec 15, 2020 | Owners | |
|
Annual plan review
|
Jan 17, 2021 | Ownership |
Key Metrics
Our Key Metrics are:
- membership
- cancellations
- average membership retention
- # of tweets and retweets
- # of website link shares
- # of page views and Faceview post shares
- # of views of our classes and sharing of our trainer blogs
Company
Overview
Ownership & Structure
The Mountain Brook Fitness Center is managed by co-owners Robert Sinclair and Arnold Hess. Robert Sinclair is the center’s operations manager and Arnold Hess is the center’s fiscal manager.
Company History
From its beginning in 1996, the Mountain Brook Fitness Center has had an exceptional swimming and tennis program. Two years ago, a loss in membership pointed toward the need for a fitness center to round out the club’s offerings. The club spent approximately $140,000 to add a fitness center with cardiovascular and weight training equipment. The club has also become a 24-hours facility, seven days a week, with childcare.
Team
Management Team
Both Robert Sinclair and Arnold Hess holds MBA degrees in finance from State University. Robert Sinclair has held executive positions with two of Monroe’s top athletic clubs. Robert managed the Decathlon Athletic Club, with a membership base of 1,500, for five years prior to opening the Mountain Brook Fitness Center. He also served as Assistant Manager of the Downtown Athletic Club for three years before joining the Decathlon Athletic Club.
Arnold Hess’ experience is in accounting. He has been a member of both Johnson, Billings, and Konig and Johnson and Associates over the past ten years.
Personnel Table
| 2020 | 2021 | 2022 | |
|---|---|---|---|
| Physical Therapist | $84,000 | $85,680 | $87,394 |
| Assistant Manager | $57,600 | $58,752 | $59,927 |
| Center Manager | $60,000 | $61,200 | $62,424 |
| Tennis Manager | $43,200 | $44,064 | $44,945 |
| Pool Manager | $40,800 | $41,616 | $42,448 |
| Center Staff (11.83) | $342,000 | $440,640 | $524,356 |
| Childcare Manager | $48,000 | $48,960 | $49,939 |
| Childcare Staff (6.83) | $211,200 | $274,176 | $319,608 |
| Massage Therapist | $60,000 | $61,200 | $62,424 |
| Totals | $946,800 | $1,116,288 | $1,253,465 |
Financial Plan
Forecast
Key Assumptions
- Increasing overall demand for gyms and fitness continues
- Increasing overall demand for healthy organic food continues
- No big changes in general view on gyms vs. outside activities
- No major push from chain competition
Revenue by Month
Expenses by Month
Net Profit (or Loss) by Year
Financing
Financing Needed
We have existing loans of $100,000 long-term and $70,000 short-term. We’ll be opening a new credit line of $70,000 as we start with this plan.
Statements
Projected Profit & Loss
| 2020 | 2021 | 2022 | |
|---|---|---|---|
| Revenue | $1,296,300 | $1,543,000 | $1,727,000 |
| Direct Costs | $84,000 | $85,680 | $87,394 |
| Gross Margin | $1,212,300 | $1,457,320 | $1,639,606 |
| Gross Margin % | 94% | 94% | 95% |
| Operating Expenses | |||
| Salaries & Wages | $862,800 | $1,030,608 | $1,166,071 |
| Employee Related Expenses | $97,200 | $117,504 | $134,835 |
| Sales | $18,000 | $18,000 | $18,000 |
| Marketing | $11,400 | $11,400 | $11,400 |
| Utilities | $6,000 | $6,000 | $6,000 |
| Insurance | $12,000 | $12,000 | $12,000 |
| Rent | $72,000 | $72,000 | $72,000 |
| Amortization of Other Current Assets | $0 | $0 | $0 |
| Total Operating Expenses | $1,079,400 | $1,267,512 | $1,420,306 |
| Operating Income | $132,900 | $189,808 | $219,300 |
| Interest Incurred | $9,151 | $3,696 | $2,695 |
| Depreciation and Amortization | $12,667 | $12,666 | $12,667 |
| Gain or Loss from Sale of Assets | |||
| Income Taxes | $16,662 | $26,017 | $30,591 |
| Total Expenses | $1,201,880 | $1,395,572 | $1,553,653 |
| Net Profit | $94,420 | $147,428 | $173,347 |
| Net Profit/Sales | 7% | 10% | 10% |
Projected Balance Sheet
| Starting Balances | 2020 | 2021 | 2022 | |
|---|---|---|---|---|
| Cash | $55,000 | $59,344 | $91,488 | $110,298 |
| Accounts Receivable | $17,388 | $17,359 | $19,429 | |
| Inventory | ||||
| Other Current Assets | $45,000 | $45,000 | $45,000 | $45,000 |
| Total Current Assets | $100,000 | $121,732 | $153,847 | $174,727 |
| Long-Term Assets | $200,000 | $200,000 | $200,000 | $200,000 |
| Accumulated Depreciation | ($48,000) | ($60,667) | ($73,333) | ($86,000) |
| Total Long-Term Assets | $152,000 | $139,333 | $126,667 | $114,000 |
| Total Assets | $252,000 | $261,066 | $280,513 | $288,727 |
| Accounts Payable | $60,000 | $16,318 | $16,318 | $16,318 |
| Income Taxes Payable | $10,391 | $6,519 | $7,654 | |
| Sales Taxes Payable | $30,000 | $30,860 | $34,540 | |
| Short-Term Debt | $88,054 | $24,968 | $19,949 | $20,969 |
| Prepaid Revenue | ||||
| Total Current Liabilities | $148,054 | $81,677 | $73,646 | $79,481 |
| Long-Term Debt | $81,946 | $62,968 | $43,020 | $22,050 |
| Long-Term Liabilities | $81,946 | $62,968 | $43,020 | $22,050 |
| Total Liabilities | $230,000 | $144,646 | $116,665 | $101,532 |
| Paid-In Capital | ||||
| Retained Earnings | $22,000 | $22,000 | $16,420 | $13,848 |
| Earnings | $94,420 | $147,428 | $173,347 | |
| Total Owner’s Equity | $22,000 | $116,420 | $163,848 | $187,195 |
| Total Liabilities & Equity | $252,000 | $261,066 | $280,513 | $288,727 |
Projected Cash Flow Statement
| 2020 | 2021 | 2022 | |
|---|---|---|---|
| Net Cash Flow from Operations | |||
| Net Profit | $94,420 | $147,428 | $173,347 |
| Depreciation & Amortization | $12,667 | $12,667 | $12,667 |
| Change in Accounts Receivable | ($17,388) | $29 | ($2,070) |
| Change in Inventory | |||
| Change in Accounts Payable | ($43,682) | $0 | $0 |
| Change in Income Tax Payable | $10,391 | ($3,872) | $1,135 |
| Change in Sales Tax Payable | $30,000 | $860 | $3,680 |
| Change in Prepaid Revenue | |||
| Net Cash Flow from Operations | $86,408 | $157,112 | $188,759 |
| Investing & Financing | |||
| Assets Purchased or Sold | |||
| Net Cash from Investing | |||
| Investments Received | |||
| Dividends & Distributions | ($100,000) | ($150,000) | |
| Change in Short-Term Debt | ($63,086) | ($5,020) | $1,021 |
| Change in Long-Term Debt | ($18,978) | ($19,949) | ($20,969) |
| Net Cash from Financing | ($82,063) | ($124,968) | ($169,949) |
| Cash at Beginning of Period | $55,000 | $59,344 | $91,488 |
| Net Change in Cash | $4,344 | $32,143 | $18,811 |
| Cash at End of Period | $59,344 | $91,488 | $110,298 |
By 
