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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

Chart visualizing the data for Financial Highlights by Year

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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.

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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
  •  

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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
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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

Chart visualizing the data for Revenue by Month

Expenses by Month

Chart visualizing the data for Expenses by Month

Net Profit (or Loss) by Year

Chart visualizing the data for 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
Gross Margin $1,212,300 $1,457,320 $1,639,606
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
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

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
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
Paid-In Capital
Retained Earnings $22,000 $22,000 $16,420 $13,848
Earnings $94,420 $147,428 $173,347

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
Investing & Financing
Assets Purchased or Sold
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)
Cash at Beginning of Period $55,000 $59,344 $91,488
Net Change in Cash $4,344 $32,143 $18,811
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