Rock Climbing Gym Business Plan

Igneous Rock Gym sales are projected to grow at a conservative rate of 8% per year. The current gym’s size can sustain this rate for at least 10 years. 

After start-up, Igneous Rock Gym may look to create more opportunities for growth by opening a climbing gear retail shop or small coffee shop within its premises. Funding for this and other possible expansions will be done through loans to the owners. 

7.1 Start-up Funding

Cole Granite and Micah Quartz plan on personally funding the entire start-up cost. Their initial investments of $70,000 each will come from taking out second mortgages on their houses and supplementing this amount from personal saving accounts.

7.2 Break-even Analysis

Our monthly Break-even point is shown below. With extremely low variable costs, the primary monthly expense comes from fixed costs.

7.3 Projected Profit and Loss

In the first year of business, Igneous Rock Gym will see an initial strong growth in sales followed by a slow, steady growth. The sales spike in January is due to the increased focus on fitness that traditionally happens during this month. Summers tend to be slower months for memberships; however, summer camps and an increase in birthday parties will make up for this loss in revenue. 

Climbing gyms are expensive to start, but the cost of sales is very low. Due to the following reasons general operating expenses for a climbing gym are also low:

• Less than prime real estate is needed for site
• Staffing needs per customer are very low and volunteers are readily available
• High word-of-mouth marketing leads to less paid marketing
• Equipment and climbing walls have long lifespans

All of these factors combine to make it realistic that Igneous Rock Gym will be profitable in its first year of business.

7.4 Projected Cash Flow

As seen in the following chart, Igneous Rock Gym will enjoy a strong positive cash flow following its first month of operation. This is due to the fact that there is no need to purchase goods. It is also important to note that Igneous Rock Gym will have no need to give its members terms, and therefore, all payments will be made by cash, check, credit card, or EFT.

7.5 Projected Balance Sheet

The balance sheet shows the healthy growth of Igneous Rock Gym’s net worth, and its strong financial position.

7.6 Business Ratios

The following table outlines some of the more important ratios from the Athletic Clubs and Gymnasiums, Membership industry. The final column, Industry Profile, details specific ratios based on the industry as it is classified by the Standard Industry Classification (SIC) code, 7991.