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Corporate Fitness

Executive Summary

Corporate Fitness will serve Seattle-area businesses, helping them to become more productive, while lowering their overall costs.

Our business is based on two simple facts:

  1. Healthy employees are more productive than chronically ill employees.
  2. It costs less to prevent injuries or illnesses than to treat them after they occur.

At Corporate Fitness, we tie worker productivity directly to the health care issue. We believe that traditional approaches to the current health care crisis are misdirected. These traditional efforts are what we call reactive–that is, they wait until after the worker has been stricken with illness or injury, and then pay for the necessary treatments. Our approach, which emphasizes prevention and good health promotion, is much more proactive.

By helping employees change their behavior patterns and choose more healthy lifestyles, Corporate Fitness will lower companies’ health care expenditures, while raising worker productivity. Health care expenditures will decrease due to reduced medical insurance premiums, reduced absenteeism, reduced turnover rates, reduced worker’s compensation claims, reduced tardiness, shorter hospital stays, etc.

The state of America’s health care crisis, coupled with current demographic changes, threaten to not only exacerbate the crisis, but further erode worker productivity as well. These environmental factors coupled with the local competitive situation signal a favorable opportunity in this market. We feel the time is right for Corporate Fitness.

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1.1 Objectives

  1. Provide wellness strategies/programs to businesses in the downtown Seattle area.
  2. Create working relationships with 20 companies by the end of year one.
  3. Expand Corporate Fitness into Portland, Oregon by the end of year two.

1.2 Keys to Success

Corporate Fitness’ keys to success are:

  • Marketing services to companies and individuals.
  • Recruitment of experienced managerial talent.
  • Dedication and hard work of the founders.
  • Raising productivity.
  • Lowering overall costs.

1.3 Mission

Corporate Fitness is a health service that helps businesses and individual workers attain one of the greatest gifts of all–that of good health. Personal gains, such as improved self-esteem and self-motivation, combined with measurable benefits will create tremendous advantages for both the employer and the employee.

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Company Summary

Corporate Fitness is based on the belief that healthy employees are more productive and efficient employees. For this reason, it provides wellness strategies/programs to businesses in the downtown Seattle area. This combines promotion of health and exercise-related activities designed to facilitate positive lifestyle changes in members of a company’s work force.

The company began in Seattle, founded by three owners, all of whom hold director positions.

2.1 Company Ownership

Corporate Fitness is a privately held corporation. The three founders comprise all of the ownership.

  • Dave Jensen – 40 percent.
  • Steve Perkins – 30 percent.
  • Robert Gomez – 30 percent.

2.2 Start-up Summary

Start-up will require approximately $300,000 of capital, $200,000 of which will be provided by the founders and their families. The remaining $100,000 will come as a loan.

Approximately $140,000 will be allocated to leasehold improvements and $75,000 to equipment.

Health club business plan, company summary chart image

Start-up Funding
Start-up Expenses to Fund $290,000
Start-up Assets to Fund $10,000
Total Funding Required $300,000
Assets
Non-cash Assets from Start-up $0
Cash Requirements from Start-up $10,000
Additional Cash Raised $0
Cash Balance on Starting Date $10,000
Total Assets $10,000
Liabilities and Capital
Liabilities
Current Borrowing $0
Long-term Liabilities $100,000
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $100,000
Capital
Planned Investment
Investor 1 $80,000
Investor 2 $60,000
Investor 3 $60,000
Additional Investment Requirement $0
Total Planned Investment $200,000
Loss at Start-up (Start-up Expenses) ($290,000)
Total Capital ($90,000)
Total Capital and Liabilities $10,000
Total Funding $300,000
Start-up
Requirements
Start-up Expenses
Legal $1,250
Stationery etc. $1,000
Brochures $800
Insurance $5,000
Rent $58,000
Expensed Equipment $75,000
Utilities $6,500
Leasehold improvements $140,000
Other $2,450
Total Start-up Expenses $290,000
Start-up Assets
Cash Required $10,000
Other Current Assets $0
Long-term Assets $0
Total Assets $10,000
Total Requirements $300,000

2.3 Company Locations and Facilities

Corporate Fitness headquarters are located within the first club located in downtown Seattle. Upon expansion, offices will be moved to a different location, not within any individual club.

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Services

Business ratios for Corporate Fitness indicate strong financial growth and an impressive chance for investment opportunities, making expansion and further development both very possible.

3.1 Service Description

Corporate Fitness provides wellness strategies/programs to businesses in the downtown Seattle area. A wellness strategy is a long-term effort, combining both health-promotion and exercise-related activities designed to facilitate positive lifestyle changes in members of a company’s work force.

Corporate Fitness will work with a company’s senior management to help it develop a mission statement for its wellness program. The client company’s employees will undergo a health-risk analysis, following which each employee will be given the opportunity to meet with a health professional to design a personalized health program.

Finally, Corporate Fitness will furnish employee progress reports to senior management with which to carry out the incentive program and generally monitor changes in the behavior of its work force.

3.2 Competitive Comparison

Corporate Fitness is not primarily a health club, as are the majority of competitors. This organization is in the business of health care cost management. The major function is to work with client companies to implement wellness strategies. Many employees will become benefactors of such strategies without ever visiting the fitness facility, as exercise is only one facet of overall wellness.

Corporate Fitness has a vested interest in each individual member of every wellness program, unlike many competitors. An integral part of this service is following up and monitoring the individuals.

3.3 Fulfillment

All fitness machines are purchased from exercise equipment distributors, while all medical equipment is bought from a reputable supply company.

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Market Analysis Summary

In 1991, the U.S. medical bill was $738 million, of which businesses paid 30 percent. Recent studies indicate returns on investments in wellness programs for various companies ranging from $1.91:1 to $5.78:1. General Electric’s aircraft engines division, for example, saves $1 million per year through its wellness programs. Traveler’s Insurance Company reported savings of $7.8 million in 1991, attributable to its wellness programs, and a return of $3.41 for every dollar invested in wellness.

Important demographic changes are taking place in America that point to the importance of worker productivity in coming decades.

  • 16 million new jobs will be created by the year 2000, but there will only be 14 million workers to fill them.
  • By 1995, women will comprise one-third of the work force, a ratio that will increase to one-half by the year 2000.
  • An estimated 80 percent of jobs to be filled in the immediate future will require more than a high-school education. Only 74 percent of Americans, however, finish high school, and only 67 percent graduate with adequate skills.
  • The number of skilled workers available to fill new jobs is decreasing, meaning that employers are facing more severe competition for labor. Thus, the health and productivity of each employee becomes crucial to a company’s success.

4.1 Market Segmentation

The market for corporate fitness is not particularly segmented, as potential customers include all downtown businesses that offer their employees some type of medical benefits, are experiencing escalating health care costs, and wish to more effectively manage those costs.

Corporate Fitness, however, segments its services for individual organizations. Corporate Fitness works with senior management to develop mission statements and provide incentive plans, and with employees to design personalized health and fitness programs.

Health club business plan, market analysis summary chart image

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Corporate Employees 35% 750 1,013 1,368 1,847 2,493 35.03%
Manufacturing Exployees 15% 250 288 331 381 438 15.05%
Industry Employees 25% 500 625 781 976 1,220 24.98%
Other 15% 300 345 397 457 526 15.07%
Total 26.96% 1,800 2,271 2,877 3,661 4,677 26.96%

4.2 Service Business Analysis

Several small fitness facilities are currently in operation in the downtown area, none of which cater their services to corporations. These organizations are primarily exercise facilities with little emphasis on personalizing individual plans to improve working performance.

4.2.1 Main Competitors

The three main competitors for Corporate Fitness are:

  • YMCA-market is lower-income families and/or students who want accessibility and affordability of fitness facilities.
  • Gold’s Gym-services are targeted toward those motivated and dedicated individuals who workout five to seven times per week.
  • Better Bodies-aimed at casual fitness-seekers who do not workout with a high intensity but still desire the status and recognition.

4.2.2 Distributing a Service

Few fitness centers are located in the downtown Seattle area, while the majority are found in suburban neighborhoods and shopping complexes. Those in the downtown area are located close to professional centers containing restaurants, parks, and other recreational activities. In suburban locales, these establishments are often found close to grocery stores, restaurants, and retail stores.

4.2.3 Business Participants

Participants in the fitness industry include national, regional, and local organizations. On the national level, companies such as Gold’s Gym and the YMCA offer exercise facilities and training programs. At the regional level, firms such as Better Bodies and Bally’s offer comparable services, while locally, privately-owned businesses provide similar, but less extensive services to exercise-seekers.

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Strategy and Implementation Summary

Corporate Fitness’ strategy is based on raising worker productivity and lowering overall costs for businesses. The most logical way to approach these factors is through a healthy work force. Companies that implement wellness programs with Corporate Fitness will be encouraged to look at the “big picture” regarding the effects of its wellness programs. Thus, one marketing goal is to persuade more traditionally managed companies that wellness can work for them.

By tailoring services and developing customized programs for companies and individual employees, Corporate Fitness will develop a reputation for quality and customer service.

5.1 Milestones

Sample Milestones topic text.

The milestones table and chart show the specific detail about actual program activities that should be taking place during the year. Each one has its manager, starting date, ending date, and budget. During the year we will be keeping track of implementation against plan, with reports on the timely completion of these activities as planned.

Health club business plan, strategy and implementation summary chart image

Milestones
Milestone Start Date End Date Budget Manager Department
Sample Milestones 1/4/2008 1/4/2008 $0 ABC Department
Finish Business Plan 5/7/2009 6/6/2009 $100 Dude LeGrande Fromage
Acquire Financing 5/17/2009 7/6/2009 $200 Dudette Legumers
Ah HA! Event 5/27/2009 6/1/2009 $60 Marianne Bosses
Oooooh Noooooo! Event 6/26/2009 7/1/2009 $250 Marionette Chèvre deBlâme
Grande Opening 7/6/2009 7/11/2009 $500 Gloworm Nobs
Marketing Program Starts 6/6/2009 7/1/2009 $1,000 Glower Marketeers
Plan vs. Actual Review 11/1/2009 11/8/2009 $0 Galore Alles
First Break-even Month 3/5/2010 4/4/2010 $0 Bouys Salers
Hire Employees 2/1/2010 3/3/2010 $150 Gulls HRM
Upgrade Business Plan Pro 4/22/2010 4/24/2010 $100 Brass Bossies
Totals $2,360

5.2 Marketing Strategy

Corporate Fitness will begin by targeting small- to medium-sized businesses in the downtown Seattle area. The first task is to convince senior executives of the benefits and needs of wellness programs. This will be accomplished by aggressively pursuing interaction and relationships with business professionals who would profit from using this service. Once a strong image is established, Corporate Fitness will use similar strategies to market its services to larger corporations in Seattle and other areas of expansion.

5.2.1 Pricing Strategy

Prices for using Corporate Fitness’ services are comparable to those of higher-end fitness centers. An employee choosing to utilize a Corporate Fitness center will pay a $100 monthly fee. For each employee enrolled in the general wellness program, regardless of whether or not they use the fitness facility, the employer will pay $150 annually. The prices reflect the quality of the equipment and service.

5.2.2 Promotion Strategy

Following initial promotional activity through advertisements in newspapers, magazines, and on television and radio, Corporate Fitness will significantly reduce its promotional efforts in the hope that word-of-mouth will attract potential clients. Promotional activity will still be utilized through these media outlets, but only minimally.

5.3 Sales Strategy

This proprietary information was omitted from the sample plan.

5.3.1 Sales Forecast

Anticipated sales are shown in the accompanying table and chart.

Health club business plan, strategy and implementation summary chart image

Health club business plan, strategy and implementation summary chart image

Sales Forecast
Year 1 Year 2 Year 3
Sales
Sales $539,075 $650,750 $825,600
Other $0 $0 $0
Total Sales $539,075 $650,750 $825,600
Direct Cost of Sales Year 1 Year 2 Year 3
Cost of Sales $33,000 $44,000 $55,000
Other $0 $0 $0
Subtotal Direct Cost of Sales $33,000 $44,000 $55,000

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Management Summary

Corporate Fitness is currently a small organization headed by three individuals. The CEO/Director of Sales and Marketing oversees the activities of the Director of Health and Wellness Programs and the Director of Finance and Administration.

The Director of Health and Wellness Programs is the contact for and supervisor of the fitness specialists and health educators and promoters.

The Director of Finance and Administration provides guidance for fitness facility attendants.

As the firm grows and expands, more director positions will be added as needed.

6.1 Organizational Structure

There are currently two divisions of Corporate Fitness: “Health and Wellness” and “Finance and Administration.” With the growth of the company, more divisions will be created as the demand for services increases.

6.2 Management Team

  • Dave Jensen: CEO and Director of Sales and Marketing. Mr. Jensen is responsible for providing leadership, direction, and control for all aspects of the company’s activities in order to realize optimum profits compatible with the best long- and short-term interests of the shareholder, employees, consumers, and public. Mr. Jensen completed his undergraduate degree at the University of North Carolina, and then earned his MBA from the University of Texas.
  • Steve Perkins: Director of Finance and Administration. Mr. Perkins is responsible for guiding and directing financial and control activities of the company in a manner designed to protect assets, meet reporting requirements, and effectively plan for and audit the financial needs of the firm. Mr. Perkins completed his undergraduate work at the University of California-Berkeley, and received his MBA from Vanderbilt University.
  • Robert Gomez: Director of Health and Wellness Programs. Mr. Gomez will assume the overall management of the health promotion program, including organizing and conducting health education programs. Mr. Gomez received his undergraduate degree in Exercise and Movement Science from the University of Oregon.

6.3 Management Team Gaps

The gaps of Corporate Fitness’ management team include:

  • Lack of experience in the fitness industry.
  • Minimal expertise in areas of finance and accounting.
  • Strong desire for financial prosperity immediately with little patience for minimal profitability.

6.4 Personnel Plan

Corporate Fitness’ personnel staff requirements are shown in the table below.

Personnel Plan
Year 1 Year 2 Year 3
Fitness Center Management $15,000 $15,000 $15,000
Program Director $54,000 $54,000 $54,000
Personnel Manager $36,000 $36,000 $36,000
Health/Fitness Specialists $33,000 $33,000 $33,000
Attendants $12,000 $12,000 $12,000
Total People 0 0 0
Total Payroll $150,000 $150,000 $150,000

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Financial Plan

  • Consulting revenue will make up approximately 85 to 90 percent of total revenue, with the rest coming from service revenue.
  • Salaries and rent are the two major expenses, while depreciation is another significant cost. Although the purchasing of fitness, medical, and office equipment is expensive, constant replacement will be needed to maintain a competitive edge.
  • In order to maintain steady gross margins, salaries and advertising expenses are not likely to increase within the first two years of operation, unless cash flows significantly increase.

7.1 Important Assumptions

Three assumptions for Corporate Fitness are:

  1. A constantly growing economy without any major recession or boom.
  2. No unpredictable changes in fitness, medical, or office equipment.
  3. No major national or global events that threaten the stability and health of the country and its citizens.
General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 3.00% 3.00% 3.00%
Long-term Interest Rate 10.00% 10.00% 10.00%
Tax Rate 25.00% 25.00% 25.00%
Other 0 0 0

7.2 Key Financial Indicators

The most important financial indicators are net increase in cash and net income. Net increase from cash will exemplify the relationship between net income and net cash from operating activities. The greater the increase is, Corporate Fitness has that level of financial strength at that point in time.

Health club business plan, financial plan chart image

7.3 Break-even Analysis

Corporate Fitness’ break-even point is computed in the table below, comparing sales and monthly expenses. Sales forecasts indicate that units sold and monthly sales are expected to be much greater than the break-even point mentioned in the table.

Health club business plan, financial plan chart image

Break-even Analysis
Monthly Revenue Break-even $26,683
Assumptions:
Average Percent Variable Cost 6%
Estimated Monthly Fixed Cost $25,050

7.4 Projected Profit and Loss

Sales are predicted to increase each month with first year annual sales totaling close to a half-million dollars. Gross margin, likewise, is expected to increase correspondingly.

Compared to total sales, net profit will increase each month and is predicted to increase for 1995 through 1997.

Health club business plan, financial plan chart image

Health club business plan, financial plan chart image

Health club business plan, financial plan chart image

Health club business plan, financial plan chart image

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $539,075 $650,750 $825,600
Direct Cost of Sales $33,000 $44,000 $55,000
Other Costs of Sales $0 $0 $0
Total Cost of Sales $33,000 $44,000 $55,000
Gross Margin $506,075 $606,750 $770,600
Gross Margin % 93.88% 93.24% 93.34%
Expenses
Payroll $150,000 $150,000 $150,000
Marketing/Promotion $25,200 $25,200 $25,200
Depreciation $7,200 $7,200 $7,200
Rent $60,000 $60,000 $6,000
Utilities $25,200 $25,200 $25,200
Insurance $5,400 $5,400 $5,400
Leased Equipment $27,600 $27,600 $27,600
Payroll Taxes $0 $0 $0
Other $0 $0 $0
Total Operating Expenses $300,600 $300,600 $246,600
Profit Before Interest and Taxes $205,475 $306,150 $524,000
EBITDA $212,675 $313,350 $531,200
Interest Expense $10,449 $8,500 $7,500
Taxes Incurred $48,757 $74,413 $129,125
Net Profit $146,270 $223,238 $387,375
Net Profit/Sales 27.13% 34.30% 46.92%

7.5 Projected Cash Flow

Ordinary cash flow will increase significantly while expenses remain relatively static, with only minimal increases. We plan to take out a short-term loan to cover our receivables and other contingencies in month one, and repay it in month 12.

Health club business plan, financial plan chart image

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $215,630 $260,300 $330,240
Cash from Receivables $230,395 $371,174 $465,179
Subtotal Cash from Operations $446,025 $631,474 $795,419
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $36,000 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
Subtotal Cash Received $482,025 $631,474 $795,419
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $150,000 $150,000 $150,000
Bill Payments $206,122 $277,578 $280,145
Subtotal Spent on Operations $356,122 $427,578 $430,145
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $36,000 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $10,000 $10,000 $10,000
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $9,600 $9,600 $9,600
Dividends $0 $0 $0
Subtotal Cash Spent $411,722 $447,178 $449,745
Net Cash Flow $70,303 $184,295 $345,675
Cash Balance $80,303 $264,599 $610,273

7.6 Projected Balance Sheet

The balance sheet indicates that at the end of the first year of operation, net worth will be positive and constantly increasing through the end of 1997.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $80,303 $264,599 $610,273
Accounts Receivable $93,050 $112,326 $142,507
Other Current Assets $0 $0 $0
Total Current Assets $173,353 $376,925 $752,780
Long-term Assets
Long-term Assets $9,600 $19,200 $28,800
Accumulated Depreciation $7,200 $14,400 $21,600
Total Long-term Assets $2,400 $4,800 $7,200
Total Assets $175,753 $381,725 $759,980
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $29,483 $22,217 $23,098
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $29,483 $22,217 $23,098
Long-term Liabilities $90,000 $80,000 $70,000
Total Liabilities $119,483 $102,217 $93,098
Paid-in Capital $200,000 $200,000 $200,000
Retained Earnings ($290,000) ($143,730) $79,507
Earnings $146,270 $223,238 $387,375
Total Capital $56,270 $279,507 $666,882
Total Liabilities and Capital $175,753 $381,725 $759,980
Net Worth $56,270 $279,507 $666,882

7.7 Business Ratios

The following table outlines some of Corporate Fitness’ more important business ratios. The final column, Industry Profile, details specific ratios based on the Physical Fitness Facilities industry as it is classified by the Standard Industry Classification (SIC) code, 7991. These ratios indicate strong financial growth and an impressive chance for investment opportunities, making expansion and further development both very possible.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 20.72% 26.87% 4.96%
Percent of Total Assets
Accounts Receivable 52.94% 29.43% 18.75% 5.74%
Other Current Assets 0.00% 0.00% 0.00% 34.12%
Total Current Assets 98.63% 98.74% 99.05% 39.86%
Long-term Assets 1.37% 1.26% 0.95% 60.14%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 16.78% 5.82% 3.04% 21.71%
Long-term Liabilities 51.21% 20.96% 9.21% 29.51%
Total Liabilities 67.98% 26.78% 12.25% 51.22%
Net Worth 32.02% 73.22% 87.75% 48.78%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 93.88% 93.24% 93.34% 100.00%
Selling, General & Administrative Expenses 66.74% 58.93% 46.42% 72.76%
Advertising Expenses 1.34% 1.11% 0.87% 2.44%
Profit Before Interest and Taxes 38.12% 47.05% 63.47% 3.01%
Main Ratios
Current 5.88 16.97 32.59 1.05
Quick 5.88 16.97 32.59 0.73
Total Debt to Total Assets 67.98% 26.78% 12.25% 2.72%
Pre-tax Return on Net Worth 346.59% 106.49% 77.45% 61.25%
Pre-tax Return on Assets 110.97% 77.98% 67.96% 7.03%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 27.13% 34.30% 46.92% n.a
Return on Equity 259.94% 79.87% 58.09% n.a
Activity Ratios
Accounts Receivable Turnover 3.48 3.48 3.48 n.a
Collection Days 55 96 94 n.a
Accounts Payable Turnover 7.99 12.17 12.17 n.a
Payment Days 27 35 29 n.a
Total Asset Turnover 3.07 1.70 1.09 n.a
Debt Ratios
Debt to Net Worth 2.12 0.37 0.14 n.a
Current Liab. to Liab. 0.25 0.22 0.25 n.a
Liquidity Ratios
Net Working Capital $143,870 $354,707 $729,682 n.a
Interest Coverage 19.67 36.02 69.87 n.a
Additional Ratios
Assets to Sales 0.33 0.59 0.92 n.a
Current Debt/Total Assets 17% 6% 3% n.a
Acid Test 2.72 11.91 26.42 n.a
Sales/Net Worth 9.58 2.33 1.24 n.a
Dividend Payout 0.00 0.00 0.00 n.a

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Appendix

Sales Forecast
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Sales
Sales 0% $17,500 $21,000 $22,500 $26,000 $32,500 $40,000 $47,500 $52,375 $56,450 $65,750 $72,500 $85,000
Other 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Sales $17,500 $21,000 $22,500 $26,000 $32,500 $40,000 $47,500 $52,375 $56,450 $65,750 $72,500 $85,000
Direct Cost of Sales Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Cost of Sales $1,500 $1,500 $2,000 $2,000 $2,500 $2,500 $3,000 $3,000 $3,500 $3,500 $4,000 $4,000
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Direct Cost of Sales $1,500 $1,500 $2,000 $2,000 $2,500 $2,500 $3,000 $3,000 $3,500 $3,500 $4,000 $4,000
Personnel Plan
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Fitness Center Management 0% $1,250 $1,250 $1,250 $1,250 $1,250 $1,250 $1,250 $1,250 $1,250 $1,250 $1,250 $1,250
Program Director 0% $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500
Personnel Manager 0% $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
Health/Fitness Specialists 0% $2,750 $2,750 $2,750 $2,750 $2,750 $2,750 $2,750 $2,750 $2,750 $2,750 $2,750 $2,750
Attendants 0% $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
Total People 0 0 0 0 0 0 0 0 0 0 0 0
Total Payroll $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500

Pro Forma Profit and Loss
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Sales $17,500 $21,000 $22,500 $26,000 $32,500 $40,000 $47,500 $52,375 $56,450 $65,750 $72,500 $85,000
Direct Cost of Sales $1,500 $1,500 $2,000 $2,000 $2,500 $2,500 $3,000 $3,000 $3,500 $3,500 $4,000 $4,000
Other Costs of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $1,500 $1,500 $2,000 $2,000 $2,500 $2,500 $3,000 $3,000 $3,500 $3,500 $4,000 $4,000
Gross Margin $16,000 $19,500 $20,500 $24,000 $30,000 $37,500 $44,500 $49,375 $52,950 $62,250 $68,500 $81,000
Gross Margin % 91.43% 92.86% 91.11% 92.31% 92.31% 93.75% 93.68% 94.27% 93.80% 94.68% 94.48% 95.29%
Expenses
Payroll $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500
Marketing/Promotion $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100
Depreciation $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $600
Rent $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000
Utilities $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100
Insurance $450 $450 $450 $450 $450 $450 $450 $450 $450 $450 $450 $450
Leased Equipment 0% $2,300 $2,300 $2,300 $2,300 $2,300 $2,300 $2,300 $2,300 $2,300 $2,300 $2,300 $2,300
Payroll Taxes 15% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Operating Expenses $25,050 $25,050 $25,050 $25,050 $25,050 $25,050 $25,050 $25,050 $25,050 $25,050 $25,050 $25,050
Profit Before Interest and Taxes ($9,050) ($5,550) ($4,550) ($1,050) $4,950 $12,450 $19,450 $24,325 $27,900 $37,200 $43,450 $55,950
EBITDA ($8,450) ($4,950) ($3,950) ($450) $5,550 $13,050 $20,050 $24,925 $28,500 $37,800 $44,050 $56,550
Interest Expense $916 $909 $903 $896 $889 $882 $875 $868 $861 $854 $847 $750
Taxes Incurred ($2,492) ($1,615) ($1,363) ($486) $1,015 $2,892 $4,644 $5,864 $6,760 $9,087 $10,651 $13,800
Net Profit ($7,475) ($4,845) ($4,089) ($1,459) $3,046 $8,676 $13,931 $17,593 $20,279 $27,260 $31,952 $41,400
Net Profit/Sales -42.71% -23.07% -18.18% -5.61% 9.37% 21.69% 29.33% 33.59% 35.92% 41.46% 44.07% 48.71%

Pro Forma Cash Flow
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Cash Received
Cash from Operations
Cash Sales $7,000 $8,400 $9,000 $10,400 $13,000 $16,000 $19,000 $20,950 $22,580 $26,300 $29,000 $34,000
Cash from Receivables $0 $350 $10,570 $12,630 $13,570 $15,730 $19,650 $24,150 $28,598 $31,507 $34,056 $39,585
Subtotal Cash from Operations $7,000 $8,750 $19,570 $23,030 $26,570 $31,730 $38,650 $45,100 $51,178 $57,807 $63,056 $73,585
Additional Cash Received
Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Current Borrowing $36,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Received $43,000 $8,750 $19,570 $23,030 $26,570 $31,730 $38,650 $45,100 $51,178 $57,807 $63,056 $73,585
Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Expenditures from Operations
Cash Spending $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500 $12,500
Bill Payments $396 $11,904 $12,769 $13,518 $14,426 $16,416 $18,299 $20,509 $21,728 $23,148 $25,459 $27,549
Subtotal Spent on Operations $12,896 $24,404 $25,269 $26,018 $26,926 $28,916 $30,799 $33,009 $34,228 $35,648 $37,959 $40,049
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $36,000
Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term Liabilities Principal Repayment $833 $833 $833 $833 $833 $833 $833 $833 $833 $833 $833 $837
Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Long-term Assets $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 $800
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Spent $14,529 $26,037 $26,902 $27,651 $28,559 $30,549 $32,432 $34,642 $35,861 $37,281 $39,592 $77,686
Net Cash Flow $28,471 ($17,287) ($7,332) ($4,621) ($1,989) $1,181 $6,218 $10,458 $15,316 $20,526 $23,464 ($4,101)
Cash Balance $38,471 $21,184 $13,852 $9,231 $7,242 $8,423 $14,641 $25,099 $40,415 $60,941 $84,405 $80,303

Pro Forma Balance Sheet
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Assets Starting Balances
Current Assets
Cash $10,000 $38,471 $21,184 $13,852 $9,231 $7,242 $8,423 $14,641 $25,099 $40,415 $60,941 $84,405 $80,303
Accounts Receivable $0 $10,500 $22,750 $25,680 $28,650 $34,580 $42,850 $51,700 $58,975 $64,248 $72,191 $81,635 $93,050
Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Current Assets $10,000 $48,971 $43,934 $39,532 $37,881 $41,822 $51,273 $66,341 $84,074 $104,663 $133,132 $166,040 $173,353
Long-term Assets
Long-term Assets $0 $800 $1,600 $2,400 $3,200 $4,000 $4,800 $5,600 $6,400 $7,200 $8,000 $8,800 $9,600
Accumulated Depreciation $0 $600 $1,200 $1,800 $2,400 $3,000 $3,600 $4,200 $4,800 $5,400 $6,000 $6,600 $7,200
Total Long-term Assets $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 $2,200 $2,400
Total Assets $10,000 $49,171 $44,334 $40,132 $38,681 $42,822 $52,473 $67,741 $85,674 $106,463 $135,132 $168,240 $175,753
Liabilities and Capital Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Current Liabilities
Accounts Payable $0 $11,479 $12,320 $13,040 $13,881 $15,809 $17,616 $19,786 $20,959 $22,302 $24,544 $26,533 $29,483
Current Borrowing $0 $36,000 $36,000 $36,000 $36,000 $36,000 $36,000 $36,000 $36,000 $36,000 $36,000 $36,000 $0
Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Current Liabilities $0 $47,479 $48,320 $49,040 $49,881 $51,809 $53,616 $55,786 $56,959 $58,302 $60,544 $62,533 $29,483
Long-term Liabilities $100,000 $99,167 $98,334 $97,501 $96,668 $95,835 $95,002 $94,169 $93,336 $92,503 $91,670 $90,837 $90,000
Total Liabilities $100,000 $146,646 $146,654 $146,541 $146,549 $147,644 $148,618 $149,955 $150,295 $150,805 $152,214 $153,370 $119,483
Paid-in Capital $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000
Retained Earnings ($290,000) ($290,000) ($290,000) ($290,000) ($290,000) ($290,000) ($290,000) ($290,000) ($290,000) ($290,000) ($290,000) ($290,000) ($290,000)
Earnings $0 ($7,475) ($12,319) ($16,409) ($17,868) ($14,822) ($6,146) $7,786 $25,379 $45,658 $72,918 $104,870 $146,270
Total Capital ($90,000) ($97,475) ($102,319) ($106,409) ($107,868) ($104,822) ($96,146) ($82,214) ($64,621) ($44,342) ($17,082) $14,870 $56,270
Total Liabilities and Capital $10,000 $49,171 $44,334 $40,132 $38,681 $42,822 $52,473 $67,741 $85,674 $106,463 $135,132 $168,240 $175,753
Net Worth ($90,000) ($97,475) ($102,319) ($106,409) ($107,868) ($104,822) ($96,146) ($82,214) ($64,621) ($44,342) ($17,082) $14,870 $56,270

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