1. health and fitness

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Business Plan for LA BeachFit
Adam Thurtell, Owner
LA BeachFit
1875 Morton Avenue
Los Angeles, CA 90026
(323) 375-4018
[email protected]
For links to all references, read this plan online at http://www.labeachfit.com/business-plan/
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Table of Contents
Executive Summary
General Company Description
Products and Services
Management and Organization
Marketing Plan
Operational Plan
Personal Financial Statement
Startup Expenses and Capitalization
Financial Plan
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Executive Summary
LA BeachFit is a personal training and group training model that brings the most effective, blended fitness
model to “real” people. We are unique in a variety of ways but first and foremost we offer something that
most other training facilities do not a GUARANTEE! We ensure results for our members that they will
either lose weight, gain muscle or a combination of both. Focused on community and an exceptionally
supportive environment, LA BeachFit keeps gimmicky training to a minimum, attracts people who are
fitness-minded but need a safe, doable approach to physical workouts with minimal overhead. We teach
the latest techniques (HIIT) for maximum results.
Based on our success in attracting members to our group fitness program, we are expanding our services to
the first of several indoor and permanent locations. LA BeachFit attracts working adults in the upper
middle income range.
With our success in attracting 37 members to our outdoor program we are confident we can reach our max
capacity of 150 clients by May 2014.
KEY FACTS AND FIGURES:
Projected Monthly Gross Revenue will be in excess of $30,000 by June 2014.
Total Membership for Gym: 150 members maximum.
BREAK EVEN: Our estimated break even date is December 2013, with 43 additional members at
$150/month each. LA BeachFit is currently profitable. With the additional expenses of a facility and our
current growth rate we estimate that we will reach our break even point within three months of moving
into a new facility.
Total costs = $6,505.50
Target Membership Price = $150
Total Clients Needed to Break Even = $6,505.50 / $150 = 43 Clients Needed to Break Even
What makes me qualified to do this?
I have worked as a project manager on high-profile utility scale solar projects throughout Los Angeles. I
have successfully entitled 3 of the first 4 utility-scale solar projects which proves my ability to get results.
I’m certified as a CrossFit trainer and hold a top 50 competitive rowing time in the USA. I personally have
CrossFit times and scores that are competitive and qualify for The CrossFit Games which is the most
competitive level in the world not just the USA. I have a five-year track record of training success, both
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with individuals clients and groups.
Head Trainer Damien is a nationally certified fitness trainer (NCCPT), and has trained small group classes
for 14 years. Damien holds a black belt in Taekwondo and has business experience that includes his role as
owner/operator of a regional mortgage brokerage.
What is your history of success?
We did a soft launch with an outdoor location in January. We started offering memberships in March 2013,
and we added 37 new members from March to August. Membership has more than doubled since May,
and we have been able to triple our prices without slowing down growth.
What is your financial position?
I have $50k+ in cash. $20k in assets for collateral. Monthly cash flow is in excess of $4,000 and has been
growing by 40% per month over the last 5 months. Gross cash flow has quadrupled since April, from $920
to $4319.
How do you plan to get to Capacity with membership?
We are putting together a very unique combination of Yoga and CrossFit that has not been done in the
area. There are seven CrossFit gyms and four yoga studios within an eight-mile radius of our proposed
location, which demonstrates that the market is ample. Through a reduced monthly membership rate,
strong referral systems, word of mouth, and guaranteeing results for our members, we are confident that
we will get to full membership. Additionally our marketing structure is as follows: geo-targeted Google
Adwords (by location and search specific fitness terms), targeted Facebook ads (Friends of clients who fit
the demographic. We have tools to easily/automatically pull Facebook profiles of clients, and a system in
place for getting those profiles and their friends into a targeted Facebook ad campaign, proven to be
effective in previous campaigns).
General Company Description
LA Beach Fit is focused on fitness in an entirely new way. We guarantee results with our clients and ensure
that our environment is operated at the highest standards in the industry. We achieve results by constantly
measuring physical performance, bodyfat percent, resting heart rate, and other markers of health and using
proven methods to consistently improve those measurements. We are extremely exacting in our choice of
movements and exercises to include in workouts and our priority is the careful monitoring of members to
ensure safe and correct form..
We are in the niche of group fitness classes, which we also supplement with personal training. We use
minimal equipment as our exercises employ natural, functional movements which greatly reduces the
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chances of personal injuries to our clients.
Mission Statement: Our mission is to get our members the results they want to see and give them the tools
to take control of their lives and make lifelong lifestyle changes. We will create and sustain a strong,
supportive community. Research has indicated that the most effective workouts are in a supportive, group
setting which keeps the individuals accountable through to the group (source: LA Times Article, and
American Academy of Health and Fitness Study). We guarantee that clients will do one or more of the
following based on their personal goals: lose weight; increase muscle mass; increase flexibility; increase
endurance or a combination thereof, all while staying injury free through proper training and teaching.
Company Goals and Objectives: To have a gym of 150 total members, with 8 full-time employees. Once
successfully completed L.A. BeachFit will be replicated in other neighboring communities. Our goal is to set
a new standard for what fitness means by winning awards for customer satisfaction, being written about in
press for our unique social and family-like atmosphere, our holistic approach to health and fitness, and the
quality of our services.
We are implementing a completely new concept in the fitness community where we take the best practices
of high-intensity workouts and balance them with ashtanga yoga. Additionally, total membership will be
capped at 150 members and classes will be added so that any given class size never exceeds 20 people. This
ensures the highest attention to each member and that corrections to the body can be made during the
classes. Average class sizes will be 12 -15 clients with one trainer present the entire time. The purpose of
doing this is to ensure quality instructions are given and followed by members, increase overall customer
satisfaction, and ensure we can keep the results we have pledged to our members of transforming their
bodies to transform their lives.
Our target market are men and women, 23-55, with an above average median income, who are interested
in a healthy and fit lifestyle, who want to increase their ability to be active and in shape, who want to results,
and have tried other programs which were unsuccessful in providing the life changes. (See Customers, page
11)
Group fitness is a niche within the fitness industry that has been growing rapidly.
Legal form of ownership: Limited liability corporation (LLC).
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Products and Services
Group Fitness Classes
The central aspects of our programming are group classes using High Intensity Interval Training (HIIT) and
Metabolic Resistance Training, which will be balanced by yoga. HIIT and Metabolic Resistance Training are
proven to get results in ⅓ the time of traditional high-intensity cardio (source: Journal of Physiology article)
and are the core of what makes CrossFit such an effective method. We are targeting the CrossFit
demographic by using the same methodology and presenting it in a less intimidating, more sustainable, and
more attractive manner.
HIIT has also shown potential to reduce the risk of heart disease and diabetes.
Our clients see us as a comfortable, supportive environment where they will be pushed to their reasonable
limits, and they understand that they can’t achieve the desired results on their own as quickly without our
instruction and expertise.
Our competitive advantage is the effectiveness of our methods and the results our members see, the lasting
lifestyle changes we help members achieve, the quality of the experience we provide, and the community
setting we are building.
We offer monthly memberships, from $80/month for 1 class per week to $155/per month for unlimited
classes. These are below market rate prices when compared to other facilities and they do not offer our
guarantee.
We offer several HIIT and Metabolic Resistance Training classes, including traditional CrossFit classes
(without powerlifting), Interval Training, Bodyweight Conditioning, Core Conditioning, Dumbbell and
Kettlebell Focus, and Full Body Conditioning.
Personal Training
Personal training is offered as a complement to group fitness classes. The focused and custom-tailored
instruction of one-on-one training can accelerate weight-loss and strength-gains. Members utitilize personal
training in several ways: personal training can serve as an onramp for new members, a jumpstart for
existing members who have fallen off, a supplement to group classes for members who see the benefits of
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both, and as a alternative for members who prefer to work individually.
Management and Organization
LA Beach Fit Team:
Adam Thurtell, CEO
Pertinent management and athletic experience:
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Project manager for team of 6 on high-profile utility scale solar projects in Los Angeles.
Based on work experience, intimate knowledge of zoning code and zoning permit process
Trained individuals and groups for over 5 years
Certified as professional coach for over 5 years
Certified as a CrossFit L1 trainer.
Competitive rowing: Ranked in top 50 in USA
Damien Singh, Head Trainer
Pertinent management and athletic experience:
●
●
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Owner/Operator of regional mortgage brokerage, managed office operations including payroll,
marketing and sales, and personnel
Certified fitness trainer for 14 years (NCCPT)
Black belt in Taekwondo
CPR/AED Certified
First Aid Certified
Operations, Processes and Administration Manager (to be hired)
Responsible for managing and documenting daily operations and processes, task management, and
handing administrative tasks.
Requirements:
3 years of experience in administration and office operations.
Experience with word processing and spreadsheet software (e.g. MicroSoft Word, Excel)
Experience with scheduling software and task management software (OmniFocus, Asana, Outlook, etc.)
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Yoga Instructor (to be hired)
Responsible for yoga programming. Part-time yoga instructor to start, opportunity to become full-time.
Requirements:
3 years of teaching experience (100 hours)
Yoga Alliance certified (RYT 200 or above)
CPR/AED Certified
First Aid Certified
Trainers (to be hired)
Responsible for running group fitness classes.
Requirements:
3 years of training experience
Nationally certified (NCCPT, ACE, NASM, etc.)
CPR/AED Certified
First Aid Certified
Professional Support
Accountant:
Gregory Fallon, EA, MST
5412 West 149th Place
Hawthorne, CA 90250
(424) 236-2125
Insurance agent:
Olivia Brown
Sports & Fitness Insurance Co.
Personal Trainer, Yoga, and Pilates Department
PO Box 1967, Madison, MS 39110
(800) 844-0536 x2338
(601) 707-1035 (fax)
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Banker:
Alex Mineros, Small Business Specialist
JP Morgan Chase Bank
Consumer Banking, CA2-5022
4500 Los Feliz Boulevard
Los Angeles, CA 90027
(323) 667-1604
(323) 662-7798 (fax)
Marketing Plan
Market Research
CrossFit was founded in 2000 and since then has grown to 7,085 gyms worldwide (4,876 gyms in the
United States) and will exceed 10,000 gyms by the end of 2014 (sources: Official CrossFit Affiliate Map,
Wikipedia CrossFit article, Inc.com article: Do Not Cross CrossFit). LA BeachFit is capitalizing on this
trend--many people find CrossFit to be too intimidating or too intense, and many former CrossFitters
have left after suffering injuries.
Economics
There are seven CrossFit gyms and four yoga studios within an eight-mile radius of our proposed location
(see Competition, page 13), which demonstrates that the market is ample (refer to the lists of CrossFit and
yoga locations, below). The average monthly membership fee of those seven CrossFit gyms is more than
$175, which prices LA BeachFit as more competitive to take existing clients from these locations.
Demand for group fitness is higher than ever. There is a steady increase in the number of classes offered
compared to the traditional weight machines and free weights. CrossFit gyms in the area are all at capacity
and our research has shown that they have expanded class offerings to meet the growing demand. Yoga
studios have seen similar growth, growing by 29% between 2008 and 2012. (source: Yoga Journal article)
Yoga is great for tone, balance, and a specific form of physical strength but doesn’t get the physical results
such as weight loss, and CrossFit culture is intimidating for many and the nature of the workouts tends to
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cause injury at a higher rate that most exercise programs. We combine the best of the CrossFit and yoga
and eliminate the drawbacks.
LA BeachFit offers Ashtanga Yoga, which combines a series of poses and breathing techniques which
realign the spine, detoxify the body, and build strength, flexibility and stamina. The entire series of about 75
poses takes an hour and a half to two hours to complete; LA BeachFit will offer 30 minutes classes to wind
down from interval training, as well as 60 minute yoga classes.
CrossFit is effective because of the science behind the methods and the group mentality--we workout
harder when we are doing it with someone. Currently no alternative exists that leverages the effective
methods. LA BeachFit meets that demand plus we can customize the workouts for athletes who want
something more challenging. At the same time we offer yoga to ease the muscles, foster the mind-body
connection, and most importantly to offer a counterbalance to the high-intensity training that is not
currently done by CrossFit.
Based on research, and current trends our model has growth potential that is exponential. We have grown
by an average rate of 20% over the past five months with no formal advertising, minimal equipment, and
absent of a facility location. With a facility location an advertising/marketing/referral budget and plan in
place we expect to go from 40 members and gross revenue of $3300/month to 125 members and gross
revenue of over $11,000/month in as quick as 10 months to full capacity in one year.
Additional revenue can be obtained by having a facility where we can host in-house seminars and
certifications: one-day, two-day, and three-day events where experts train attendees in various fitness
disciplines. For example, a two-day Olympic Weightlifting seminar can accommodate 15-30 attendees, who
each pay a fee of approximately $210. Assuming the minimum number of attendees and an instructor fee
of $1,500, the seminar would gross $1,650 for LA BeachFit. This is a very conservative estimate--many
seminars are priced significantly higher and with proper promotion the attendance would be at least
doubled.
Products
We will be carrying the following complimentary products :
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Branded t-shirts and other apparel (100% markup)
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Exercise gear: jumpropes, exercise gloves, yoga mats, etc. (see Startup Expenses and Capitalization,
page 22)
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Pertinent books and magazines
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●
Progenex protein and other supplements (25% markup)
Features and Benefits
The main features we provide are supportive community, expert instruction, motivation from the group,
and the most effective fitness methods.
We provide the following features and benefits:
Guaranteed results. We consult with our members to determine reasonable goals and a plan of action,
including a commitment from them, and they don’t pay a dime if they meet the terms of our agreement
and don’t reach their goals.
Access to the latest cutting edge health and fitness information. To provide clients with the latest
information in health and fitness we are constantly searching for the best information in major fitness
publications including peer-review journals.
Fitness Tracking. We routinely test performance and track the most importance biometrics--chiefly, bodyfat
%--to give members constant feedback on their progress. Clients can track their progress online, and watch
as the graph of their bodyfat % drops.
Contests and Challenges. To motivate with friendly competition, foster teamwork, and create community,
we host periodic challenges that include sticking to nutrition plans and improving physical performance.
Follow-Up & Check-Ins. Sometimes life gets in the way, and members lose momentum. We identify
members who have begun showing up less or stopped altogether and re-engage them in the community.
Customers
Targeted customers: men and women, 23-55, income of $45k - $100k+, within a 5 mile radius. Our typical
customer is a professional or creative type who wants to get in better shape to be healthier, more attractive,
and values the extra push and higher-quality experience our community provides.
Client 1
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33-55 (about ⅓ of our members)
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Female
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within 5 mile radius of home or work, primary focus on residential
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●
$70-$200k income
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White collar: managers, executives, owners of small business
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Graduate degree
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has some experience working out, needs a group, needs a push, wants to be more attractive
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-OR- hasn’t worked out, had a wake up call and wants to be more attractive/healthier
Client 2
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23-32 (about ⅓ of our members)
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Female
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within 5 mile radius of home or work, primary focus on residential
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$45-$100k income
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Young professional, artist/creative type
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Graduate degree
●
Has some experience with exercise, needs to maintain a ‘look’ for partner and wants to maintain
sex appeal
Client 3
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27-45 (about ⅓ of our members)
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Male
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within 5 mile radius of home or work, primary focus on residential
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$45-$200k income
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Young professional, Self Employed, artistic/creative type i.e. Real Estate Agents
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Graduate degree or above has shown highest propensity for customer acquisition
●
Has some experience with formal exercise in a workout studio, wishes to maintain a ‘look’ for
career, desires to stay active and maintain looks. i.e. Those with desk jobs
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Competition
Our competition will be CrossFit gyms and yoga studios. There are no competitors that do both at the
current time. Some CrossFit gyms have 1-2 yoga classes per week.
Crossfit Locations:
CrossFit Sunset
1030 N Alvarado Street
Los Angeles, CA
CrossFit Ganbatte
3235 San Fernando Rd, Unit 4
Los Angeles, CA
CrossFit 323
3461 Casitas Ave
Los Angeles, CA
CrossFit Merge
1517 Railroad St
Glendale, CA
CrossFit City of Angels
4314 Melrose Avenue
Los Angeles, CA
CrossFit Silver Lake
4912 B Fountain Ave.
Los Angeles, CA
CrossFit Eagle Rock
4662 Eagle Rock Blvd
Los Angeles, CA
Sunset CrossFit
Yoga Studio Locations:
Yogala Echo Park
1840 Echo Park Ave
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Los Angeles, CA 90026
Urth Yoga
2809 W Sunset Blvd
Los Angeles, CA 90026
One Down Dog
2815 Sunset Blvd
Suite 202
Los Angeles, CA 90026
Ashtanga Yoga Los Angeles
2815 Sunset Blvd
2nd Floor
Los Angeles, CA 90026
Table 1: Competitive Analysis
Competitor
Price
HIIT
Yoga
Quality
Customer Service
Financial Stability
Location
LA BeachFit
10
9
8
10
10
9
10
CrossFit
8
9
1
7
7
8
8
Yoga
8
1
9
7
7
8
8
Competitive factors are rated on a scale of 1-10, 1 = least competitive and 10 = most competitive. For CrossFit and yoga,
the value of each factor represents the most competitive factor of all locations from the list above.
Table 2: Competitive Factor Weighting
Competitive Factor
% of weighting importance in buying decision
Price
40%
Quality
35%
Customer Service
15%
Financial Stability
5%
Location
5%
Total (Must equal 100%)
100%
Niche
We offer the effectiveness and efficiency of CrossFit and the balance of yoga. Our niche is people who
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want to lose weight, get stronger, feel better, relieve stress, find community, feel more confident, or some
combination of any or all of those things, and are looking for expert programming and a group for
motivation.
Strategy:
Promotion
We have identified several promotion channels that consist of reliable, proven advertising techniques, both
paid and free, which can be turned on and off as needed. As we grow in clients our advertising will be 10%
of gross proceeds with a net result of 20% increased sales in membership, based on the methods outlined
below. This is will ensure our growth is constant with increase in clients from multiple areas.
Groupon, AmazonLocal, LivingSocial, and other coupons:
LA BeachFit publishes a coupon deal approximately every two months, and this frequency is increasing as
our coupon sales improve. To date we have run three AmazonLocal campaigns that have brought in 25%
of our clients. A Groupon campaign that has been running since June has brought in 42 prospective
members, 9 of whom have been converted to members. Our conversion rate will increase once we have a
facility, and we are continually increasing the conversion rate by focusing our message, improving our sales
process, and creating packages to give to new customers. Every coupon customer is treated as a prospect
and receives a ‘love’ package that consists of several items branded with our logo: a t-shirt, sports bag,
protein shaker bottle, and a notebook. This demonstrates to that we care about our members, and it helps
spread our brand. The cost of these packages is covered by revenue from the coupon sales.
Drip email campaign:
The most effective marketing is drip email campaigns to our existing email list--people who have actively
chosen to receive my emails to keep informed, but have not yet signed up. My list has grown to over 400
names in 6 months, has been growing by 25% per month. With the addition of Facebook and Adwords
campaigns, that will increase to at least 35%.
Affiliate email campaigns:
Shared email campaigns targeted to subscriber lists from local businesses, including chiropractors, massage
therapists, nail salons. We have identified 10 chiropractors, six massage therapists, and one Alexander
Technique practitioner in a 5 mile radius that we will contact. These businesses will want to align with my
organization because we share a demographic of clientele, and access to my growing list will add to their
client base. We have already approached five local business and 100% were interested.
Yelp:
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Paid keyword search advertising costs $545 per month, and brings us approximately 300 page views per
month and an average of one new members per month. At a per-member lifetime [revenue] of $750, the
return on investment for Yelp advertising has been $250 per month. This will improve as our results
continue to bring in stellar reviews and we hone our Yelp page with specific, targeted calls to action.
Google Adwords:
We employ Adword campaigns that geographically target locals searching keywords relevant to our services,
and we convert these prospects to our email funnel with enticing offers. They then become part of our
email drip campaign and email autoresponder campaign and are immediately informed of our attractive
offers and our unique approach to fitness. We expect a return on investment of 2:1 from Adwords, and
our monthly budget will increase from $300 to $1,000 as cashflow allows.
Facebook:
By providing valuable information and creating interest and trust on our Facebook page we attract
prospects to join our email list. With Facebook ads we can target users who have like our fanpage, and
friends of those users. We can also target users in the geographic area who fit our the demographic or our
typical client.
Challenges and Contests:
We host quarterly contests and challenges, such as our Biggest Loser contest, where we create teams that
compete for prizes. The competition is held to high standards to ensure healthy results--regular weigh-ins
that measure bodyfat %, blood pressure, resting heart rate, etc. are vital to these challenges. Within the team,
members work together, hold each other accountable, and share information. This creates a community
atmosphere and engages our membership with friendly competition.
Corporate Wellness Programs:
We are prepared to host informational seminars and for local employers, we will customize our message
based on the needs of the company which allows us to convert larger audiences into members.
Referral program:
With a total membership of 39 currently we are using word of mouth through each client for an expected
return on 1 new member per 5 existing clients. Through our referral program success indicates we will get 2
new clients each month. Members who refer a new member will get their next month at just $29, and the
new member will get their first month at the same rate. Not only is this a great deal, it encourages current
members to convert friends, which enhances the accountability factor and increases member retention.
Member Reactivation System:
All clients must sign up online for classes, which allows us to track attendance and identify members who
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are beginning to fall off or who have ceased to come altogether. We contact those members directly and
involve them in our regular challenges and special promotions.
High-visibility workouts in public parks:
We will continue to do workouts in local public parks, including the Silver Lake Meadow, Echo Park Lake,
and Elysian Park, with promotional flyers and information for interested passersby to take.
Cross-promotion events in public stores:
Lululemon Athletica, a yoga and fitness apparel retail chain with locations in Pasadena and Glendale, has
offered to partner with LA BeachFit for in-store events, such as weigh-ins and workouts. Our participating
members would get a discount on fitness gear, and LA BeachFit would get exposure to a wider market,
including the yoga demographic.
Published articles in local press:
Shortly after opening our facility, we will seek press articles that highlight our unique approach and our
emphasis on community.
Branding:
We have created a strong, clean logo that represents our brand. Many people have already requested t-shirts
and proudly wear them, and we have been giving away high-quality printed American Apparel t-shirts with
the logo to increase brand awareness.
Promotional Budget
$545/month on Yelp
$300/month on Facebook ads, increasing to $1,000/month
$300/month on Adwords, increasing to $1,000/month
Pricing
Our prices fall in the mid-range for the premium services we provide. Currently our prices are less than
CrossFit and yoga memberships; although once we have a facility our prices will be comparable to both
CrossFit and yoga studios. Indicators have shown as we gain traction in the market our membership prices
have been increasing without losing current customers.
$20/class for individual classes (We have a below average entry fee for guests and newcomers.)
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$155/month for unlimited days per week, month-to-month contract
$15/month for 3 days per week, month-to-month contract
$80/month for 1 day per week, month-to-month contract
Save $20/month off either membership for a 1 year commitment.
$25/class is becoming the industry standard in Los Angeles for high-end group fitness classes. Our
membership prices are a little less than the industry standard, due to the fact that until this point we have
been operating outdoors in a public park. Customers make their purchase decision based on quality and
potential for results.
Proposed Location
LA BeachFit began as an outdoor workout, an alternative to bootcamps in the area. We have operated
without a facility and with minimal equipment, and we quickly grew to 39 members in 6 months. Our
accelerating growth and our decision to expand our class offerings requires us to move to an indoor facility
(while keeping outdoor workouts as part of our marketing). The ideal location is within 3 miles of Silver
Lake Meadow, ideally in the neighborhoods of Silver Lake or Echo Park.
Location will be important to our members. The location should be in the vicinity of the Silver Lake
Meadow, which members have become accustomed to. The location should have adequate parking and
access, and the facility itself should feel comfortable and welcoming. The interior space should be consistent
with our upscale, clean, and strong branding.
Philanthropy
Once monthly net revenue reaches $5,000, offerings will be further expanded to local public H.S. sports
teams that can benefit from our [elite, skilled, etc] approach to conditioning (e.g. track, cross country, etc.)
HOW DOES THIS EFFECT MEMBERSHIP NUMBERS - CAPPED AT 150
Once monthly net revenue reaches $12,000, we will establish The LA BeachFit Foundation and a portion
of each monthly membership fee will support focused exercise programs for local children, grades 1 - 12,
so that they can reap the positive lifestyle benefits that come from regular exercise.
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Operational Plan
Our facility will be outfitted with professional exercise matting and will include minimal equipment,
sufficient for a class size of 20 of varying ability and experience. Equipment will include dumbbells,
kettlebells, TRX bands, plyometric boxes, jumpropes, medicine balls, abmats, and yoga mats. Our facility
will have a men’s and women’s restroom with showers, a lounge area, an office area, two large classrooms,
two auxiliary rooms, community cubbies, and a community refrigerator. (See Startup Expenses and
Capitalization, page 22)
We currently offer 14 group fitness classes per week. Upon moving into a facility we will add 5 yoga classes,
and increase to 10 yoga classes per week once we have determined the demand. As membership increases
we will add approximately 6 group fitness classes and 2 yoga classes per week for each 25 additional
members, as needed to keep class size at our target of 12-15 average.
Yoga classes will be staggered to start 10 minutes after fitness classes end so that members always have the
option of balancing a fitness class with a yoga.
Methods
We use high-intensity interval training (HIIT), also known as metabolic conditioning. This method employs
intense bursts of work broken up by short periods of rest, which leverages the body’s ability to adapt. The
method improves the body’s recovery, which results in increased metabolism and strength over a short
time period relative to traditional exercise. Studies show that HIIT methods achieve the same results as
traditional high intensity cardio in ⅓ the time. (source: Journal of Physiology article)
Our exercises use natural, functional movements with low weights rather than expensive machines. Our
instructors are all nationally certified trainers and the small class size allows us to constantly monitor our
members for proper form.
Yoga classes are offered to balance the body--after high intensity training, members have the option to
slow down and stretch out with yoga classes.
Location
Our location and facility should fit our brand: clean, comfortable, in a comfortable neighborhood that
matches the demographics of our target clients.
The interior design will be a carefully considered and integral part of our brand. Layout and flow of space
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is important, as is cleanliness.
Physical requirements:
●
Approximately 2,000 square feet:
○ 2 group classes @ 600 square feet
○ 2 auxiliary rooms @ 300 square feet
○ 1 office @ 100 square feet
○ 2 restrooms (¾ baths) @ 100 square feet total
●
Retail or Industrial building
●
Zoning: gyms/fitness clubs are a by-right use in the following zones: C1.5, C2, C5, CM, M1, M2,
M-3.
●
Parking: a gym use would not require additional parking to any established uses in the
aforementioned zones (exceptions are schools and churches; we are not considering such
locations.)
Access:
Convenient access by car is required. Walk-in is desired but not essential.
Our desired neighborhoods are Echo Park and Silver Lake, preferably on a main thoroughfare.
Costs:
Rent will be $5,500/month or less, salary will begin at $1680/month, maintenance will be $200/month,
utilities will be $200 per month, insurance will be $250/month. Phase I total costs will be $22,991.99
including Regulpol shock-absorbent gym flooring at $4,200 for a 2,000 square foot space (see Regulpol
matting quote), approximately $3,000 for men’s and women’s ¾ restroom, and Phase I equipment costs.
(Regulpol matting can be postponed until Phase II. (See Phase I, page 22)
Business hours will be 6am to 10pm Monday thru Friday, 8am to 5pm Saturday, and 8am to 3pm Sunday.
Legal Environment
Describe the following:
●
All trainers will be certified by a nationally certified personal training program
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●
Minimum of one CPR/First Aid certified staff member on the clock at all times
●
Insurance coverage: All trainers will be covered with personal liability insurance for a minimum of
$1,000,000 per occurrence (see Damien Singh Insurance and Adam Thurtell Insurance). LA
BeachFit facilities will be covered for up to $5,000,000 for premises and operations, bodily injury,
and property damage
Personnel
●
Seven employees (starting with four: Adam Thurtell, Damien Singh, yoga instructor, and operations
and process manager)
○ 5 certified trainers for group classes and personal training, including Adam Thurtell and
Damien Singh.
○ 1 certified yoga instructor for yoga classes
○ 1 operations and process manager
●
Employees will come mainly from our network or from careful internal vetting and probationary
periods
●
Existing staff is the best around
●
Currently trainers are paid $30 per class plus $2 per person for every person in excess of 10. As LA
BeachFit becomes profitable, pay move to a performance-based model.
●
All staff are nationally certified in their discipline; CPR and First Aid are required
Accounts Receivable
MindBodyOnline.com handles automatic pre-payments. LA BeachFit will not extend post payment plan to
any members.
Delinquent members will be notified by email and phone call immediately, and locked out of their account
after 15 days.
Personal Financial Statement
LA BeachFit is backed by $45,000 in cash reserves, in addition to the monthly cashflow of $3,600, which
has been increasing at a rate of 20%. Owner Adam Thurtell makes over $70,000 annually as an Urban
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Planner for the County of Los Angeles, a position which he has held for over six years, and makes over
$1,500 per month as a personal trainer. Total annual revenue is in excess of $90,000.
Startup Expenses and Capitalization
Price these out and put in phases: Our facility will be outfitted with professional exercise matting and will
include minimal equipment, sufficient for a class size of 20 of varying ability and experience. Equipment will
include dumbbells, kettlebells, TRX bands, plyometric boxes, jumpropes, medicine balls, abmats, and yoga
mats. Our facility will have a men’s and women’s restroom with showers, a lounge area, an office area, two
large classrooms, two auxiliary rooms, community cubbies, and a community refrigerator. Phase I includes
remodeling of restrooms, which will not preclude regular operations. Installation of matting will take
approximately 1 week, during which some classes may be affected.
Phase I:
First and last month’s rent: $11,000
Exercise flooring (Regulpol): (see Regulpol matting quote) 2,000 square foot space = $4,200
Initial remodeling: men’s and women’s ¾ restroom = $3,000
Kettlebells: 3 sets @ $87 (see link) = $261
Jumpropes: 10 sets of ProSource jumpropes @ $3.99 (see link) = $39.99
Yoga mats: 20 mats @ $10 = $200
Refrigerator: $300
Cubbies: Expedit Shelving unit at Ikea (see link) = $159
SubTotal: $19,159.99
Contingencies: 20% of the total of all startup costs = $3,832
Total: $22,991.99
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Phase II:
Remodeling: Build walls and run electrical for the office, 2 classrooms, 2 auxiliary rooms = $3,000
Pullup bars: 5 bars and mounts (see link) = $350
Suspension straps: 10 sets @ $100 (see link) = $1,000
Gymnastic rings: 5 sets @ $32.63 (see link) = $163.15
Medicine balls: 5 @ $100 (see link) = $500
AbMats: 10 @ $34.94 (see link) = $349.40
Plyometric Boxes: 5 @ $136.23 (see link) = $681.15
Dumbbells: Total budget for various weights = $400
Total: $6,443.70
Financial Plan
12-Month Profit and Loss Projection
The 12-Month Profit and Loss Projection for LA BeachFit is found at the following link: LA BeachFit PnL
Projection. The Profit and Loss Projection is the first sheet.
Break-Even Analysis
Fixed Costs = $6,412
Variable costs = $4,413
Total Costs= $10,825
Current Revenue = $4,319.50
Revenue needed to cover total costs = $6,505.50
Target Membership Price = $150
Total Clients Needed to Break Even = Revenue needed / Target Price
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43 Clients Needed to Break Even = $6,505.50 / $150
Our average membership sale from inception to date has been approximately $100/month, we have 37
members, and our current revenue from memberships is $4,319/month. Our break even point, calculated
for all fixed and variable costs included in operating a facility, is $10,825/month of gross revenue. To break
even we need $6,505.50/month additional revenue, which would be covered by selling 43 more
memberships at $150/month. (We began selling memberships at $45/month, and gradually increased to
our current prices, resulting in the current average of a little less than $100/month. Average sale price of
memberships from this date forward will be $150.)