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City Dojo

Company Summary

City Dojo is one of the oldest karate schools in the Los Angeles County area and has been in existence since 1964. It serves a large area offering group and individual classes in the art of karate and self-defense. The dojo is located in the center of an outlining community near Los Angeles on a major business street with a storefront and ample parking in the rear.

2.1 Company Ownership

City Dojo was established in 1964. In 1975 the Shihan took over the operation and incorporated. The corporation status was dissolved in 1995 and since then the dojo has been a sole proprietorship of owner and Shihan. In the plan, the business will be changing from a sole proprietorship to a limited liability company with the Shihan as principal.

2.2 Company History

City Dojo was first established in 1964 during the Martial Arts boom (the Bruce Lee years). At its height the dojo had an overflow of 300 students (early 1980’s). With the advent of the California Northridge Earthquake (early 1990’s), increased competition, soft economic market and personal family matters of the owner, membership declined but has held steady at 60-70 over the past three years. It is felt that the dojo has a full facility capacity of 250 members.

Over the last three years the owner has operated the dojo more as a hobby then a business, on a part-time basis. Much of his income was derived from sources outside the dojo. The dojo (his first love) provided additional income on a limited basis. The attached table reflects the current position of the dojo over the past three years.

Karate business plan, company summary chart image

Past Performance
1999 2000 2001
Sales $59,110 $64,300 $65,100
Gross Margin $42,184 $49,113 $47,095
Gross Margin % 71.37% 76.38% 72.34%
Operating Expenses $40,960 $44,980 $46,300
Balance Sheet
1999 2000 2001
Current Assets
Cash $1,000 $1,500 $1,500
Other Current Assets $0 $0 $0
Total Current Assets $1,000 $1,500 $1,500
Long-term Assets
Long-term Assets $25,000 $35,000 $40,000
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $25,000 $35,000 $40,000
Total Assets $26,000 $36,500 $41,500
Current Liabilities
Accounts Payable $2,500 $3,500 $4,500
Current Borrowing $2,500 $14,000 $15,000
Other Current Liabilities (interest free) $0 $0 $0
Total Current Liabilities $5,000 $17,500 $19,500
Long-term Liabilities $5,000 $14,000 $15,000
Total Liabilities $10,000 $31,500 $34,500
Paid-in Capital $0 $0 $0
Retained Earnings $14,000 $0 $3,000
Earnings $2,000 $5,000 $4,000
Total Capital $16,000 $5,000 $7,000
Total Capital and Liabilities $26,000 $36,500 $41,500
Other Inputs
Payment Days 0 0 0

2.3 Company Locations and Facilities

The dojo is located in the heart of a small city near Los Angeles. It is a 3,000 square foot facility with a 1,800 square foot training area, 300 square foot viewing area (lobby) with a receptionist desk, large men’s and women’s dressing areas, showers and a sauna. There are two offices in the dojo, one used for storage, the other for the main office.

The building faces a major street and has considerable foot and drive by traffic. There is some parking on the street and considerable free parking in the rear of the building, with a back entrance to the dojo. The facility had a long-term lease (25 years) which has three more years to go. A 10 year extension is available, but the current $750 monthly rental will go up with that extension.