crossfit ozona pp final

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Industry Problem Convincing prospective members that an intense, unconventional style of training is possible for everyone. You do not have to be fit to attain fitness!

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Page 1: Crossfit ozona pp final

Industry Problem

Convincing prospective members that an intense, unconventional style of training is possible for everyone.

You do not have to be fit to attain fitness!

Page 2: Crossfit ozona pp final

Pain Point StoryIt is possible for everyone!

Of all of the people I spoke to about the idea of joining a Crossfit gym, one was extremely against the idea. His name is John, and he has progressively gained weight since college ended. He has been announcing lifestyle changes for weeks and says he is working out again. This means 2 or 3 days in the gym, with light weights and a treadmill for 10 minutes. He complains about no results every day. Our discussion about Crossfit was very short. I explained what we do, how effective it is, and that its incredibly fun. He disagrees, however, and cuts me off insisting that he cannot do the lifts that we perform. He “has no desire to work that hard and climb ropes and stuff”. This is the perfect example of the problem facing a new Crossfit gym. John is worried and ashamed to try new, difficult ways of training, even though his current workouts admittedly do not work. Convincing people to at least try a workout might be the most difficult part. We have to empower our customers! The picture above says it all. We have to ask, “How bad do you want it?”

Page 3: Crossfit ozona pp final

Mission

Enhanced lifestyle through unique fitness.

Page 4: Crossfit ozona pp final

Values

● Community● Determination

● Passion● Humility

● Transparency

Page 5: Crossfit ozona pp final

Vision

Safe, fun community of athletes

Page 6: Crossfit ozona pp final

Crossfit Key Performance Indicators

Customer Satisfaction Services Offered/Capabilities

Staff Memberships

Page 7: Crossfit ozona pp final

Crossfit Market

We're not serving Globo-Gym junkies. We serve the people who want to get fit, and who aren't afraid of the work that's

involved!

Page 8: Crossfit ozona pp final

Crossfit Market

There are 4 Crossfit Affiliates in a 15 mile radius of our location in the Palm Harbor/Clearwater area.

There are two LA Fitness gyms in the same radius. There are no Crossfit gyms within 5 miles of our location. Results of an internet survey we held via Facebook yielded

that 67% of Ozona and Palm Harbor residents that took it were interested in trying Crossfit.

Page 9: Crossfit ozona pp final

Crossfit Pain Point Quote

“You know what releases endorphins and is addictive? Fun. If you are having fun while exercising, not only will you be less focused on your labored breathing and heavy limbs, but you will come to associate exercise with fun, further increasing the likelihood that you will re-engage in said

activity.”

Page 10: Crossfit ozona pp final

Top Competition

Crossfit Triumph Market: North Pinellas County Cost: $150 per month Advertising: Blog, Facebook, Word of mouth Weakness: Lack of clientele in No. Pinellas, Tarpon Area

Page 11: Crossfit ozona pp final

Top Competition

Crossfit RebelsMarket: Clearwater/Dunedin/Largo

Cost: $189 per month

Advertising: Website, Blog, Word of Mouth

Weakness: Location tucked in industrial warehouse park. Hard to find out about.

Page 12: Crossfit ozona pp final

Top Competition

LA FitnessMarket: Palm Harbor, North Pinellas County

Cost: Roughly $55 per month

Advertising: Viral Fliers, Internet, Radio, Television, Newspaper, Mass Marketing

Weakness: Same “large gym” feel. More of a social club than fitness center. No sense of community. Members are more of a number, less of a person. This leads to lack of accountability and use.

Page 13: Crossfit ozona pp final

SWOT

STRENGTHS Educated and passionate owners/trainers Team work outs Community/family environment Developed unique fitness program Appeals to serious/dedicated athletes Consumer goal oriented Short effective workouts leave time for customers daily

tasks/priorities

Page 14: Crossfit ozona pp final

SWOT

WEAKNESSES Small business Name not well known Membership is small No traditional promotion/advertising Program design may not appeal to all athletes

Page 15: Crossfit ozona pp final

SWOT

OPPORTUNITIES Build brand loyal consumers Appeal to all fitness levels Provide consumers with the means to better their fitness

and life Word of mouth advertising and paid advertising to enhance

business Increase membership and locations

Page 16: Crossfit ozona pp final

SWOT

THREATS Large corporation/24hr/Large Gym Companies in the area Pricey membership compared to said Large Gyms May be intimidating to the casual fitness consumer People prefer own workout routine, fitness alone, or on own

time Consumers locked into other memberships Lack of knowledge of programs has reputation for causing

injuries

Page 17: Crossfit ozona pp final

Business ModelDeliver excellence in 3 areas:

Coaching

Training experience

Everything else (billing systems, foundations classes, facility, etc.)

Be inclusive

Make sure our culture welcomes new athletes and doesn't become a clique of cool people that puts off the neophyte.

Play together - do community events, Crossfit events, have parties, have fun!

Do business with athletes once - we want to feel like a sports team not a gym where we're constantly selling to our athletes. For us this means no supplement sales, membership promotions, upsells, contracts, etc. This philosophy underlies so many things we do.

Be Principal based:

Go the extra mile for our clients

Treat people the same way I'd want to be treated, even if it involves tough feedback or the answer "no.”

Page 18: Crossfit ozona pp final

Business Model

The three areas of the business model are inclusive of everything to run a gym based on integrity.

We will not market the same way most business do. We will let our athletes testimony be our biggest ally.

We will run a blog with the Workout of the Day(WOD), member stories, pictures and videos, as well as nutritional tips and healthy lifestyle promotion.

Social media will be a tool used to connect with current and prospective members.

There will be no commercials or ads. We will grow through word of mouth. Delivering a great product is what drives our business model.

Page 19: Crossfit ozona pp final

Business Model

Memberships will be all inclusive of the gym at $125 per month.

Inexperienced members will go through classes to learn the exercises which are an additional $50 per class.

There is no sign up fee and no hidden charges.

Page 20: Crossfit ozona pp final

Pro Forma Statement

Expense Cost ($)

Security Deposit on Warehouse $2000.00

First 6 Months Rent $6000.00

Computer Systems/Office Furniture $1000.00

Crossfit Affiliation $3000.00

Weight Equipment $17,000.00

Insurance $1000.00

Legal $100.00

Office Supplies $600.00

Slush Fund(Unexpected) $10000.00

Total Start Up Expenses $40,700.00

Page 21: Crossfit ozona pp final

Projected Income

We have set a goal of 20 members in the first three months.

At $125 per month this comes to $2,500 a month, not including any more growth or the introduction classes.

Classes come out to around $2,000 if each member takes at least 2 intro classes.

20 members for the first full year would cover $30,000 of the opening expenses. If we project to at least 30 loyal members in the first year, we would be making money.

30 members would equal $45,000 without introduction classes. This is a realistic goal that we can reach.

We plan for high expenses and lower sales in hopes that we are pleasantly surprised by the success that we have.

Page 22: Crossfit ozona pp final

Projected Income

We have set a goal of 20 members in the first three months.

At $125 per month this comes to $2,500 a month, not including any more growth or the introduction classes.

Classes come out to around $2,000 if each member takes at least 2 intro classes.

20 members for the first full year would cover $30,000 of the opening expenses. If we project to at least 30 loyal members in the first year, we would be making money.

30 members would equal $45,000 without introduction classes. This is a realistic goal that we can reach.

We plan for high expenses and lower sales in hopes that we are pleasantly surprised by the success that we have.

Page 23: Crossfit ozona pp final

Quarter 1 RevenueProjections● In our first three months we initially projected 20 new

members. For the sake of caution, our projections will assume only 10 members in those three months.

● We will assume each new member will take an average of two introduction classes at $50 per class.

New Members(Q1)

10

Monthly Dues $125 per month ( x 3 months)

Classes $50 (x 20 classes)

Total Revenue (Q1)

$4750

Page 24: Crossfit ozona pp final

Quarter 2 RevenueProjections● In the coming quarters we temper our expectations.

We will expect 2 new members per month, making a total of 6 new members for Q2.

New Members(Q2)

6

Monthly Dues $125 per month ( x 3 months)

Classes $50 (x 12 classes)

Total Revenue (Q1)

$2850

Page 25: Crossfit ozona pp final

Quarter 3 RevenueProjections● For Q3, we are expecting the same growth. Six more

new customers over the three month span.

New Members(Q3)

6

Monthly Dues $125 per month ( x 3 months)

Classes $50 (x 12 classes)

Total Revenue (Q3)

$2850

Page 26: Crossfit ozona pp final

Quarter 4 RevenueProjections● For Q4, we have factored in the holidays and project 5

new members for the final three months of the year.

New5 Members(Q4)

5

Monthly Dues $125 per month ( x 3 months)

Classes $50 (x 10 classes)

Total Revenue (Q4)

$2375

Page 27: Crossfit ozona pp final

First Year Revenue Totals

● The first year total income is $12825.

Q1 Total $4750

Q2 Total $2850

Q3 Total $2850

Q4 Total $2375

Full Year Revenue $12825

Page 28: Crossfit ozona pp final

Losses Over 3 Years

● We have projected the first year to cost $10,200 per quarter.● For the years that follow, running the gym is a minimal cost.

Years two and three are as follows:

● Years two and three would cost $4500 per quarter. As the gym does not require AC, the power bill is minimal and is included in the rent.

● This allows for our second year to have a large amount of potential to make money.

Rent/Year $12000

Crossfit Affiliation/Year $3000

Insurance/Year $2000

Slush Fund/Year $2000

Total Yearly Costs $18000

Page 29: Crossfit ozona pp final

Projections Summary

● While the first year may prove to be difficult, a business like this has much potential in the years to come. Year two we will reach our break even point even with no new growth.

● And with word of mouth and reputation being built, growth is inevitable.

● All projections are “worst case” scenarios. Losses are as high as possible and profits as low as possible.

● We want to be prepared for anything.● Eventually other things such as t-shirt sales will help to

boost profits, as well as affiliating with local sports teams, first responder departments and working with charities will grow our brand and bring new members.

Page 30: Crossfit ozona pp final

Crossfit Ozona

The following is a break down of Crossfit Ozona's cash flows for the next three years, quarterly.

This factors in our income, as well as cash we have set aside to invest into the start of the gym which is represented as “cash”.

All three years are realistic goals. In year two we account for actually losing members over that time. In year three we expect to have established ourselves in the community enough to see large gains in membership.

Page 31: Crossfit ozona pp final

Year 1 Cash Flows

Cash Flows Q1 Q2 Q3 Q4 Year 1

Operations

Net Income 4750 2850 2850 2375 $12825

Cash 6000 6000 6000 6000 $24,000

Investing

Equipment 3750 3750 3750 3750 $15,000

Office 200 200 200 200 $800

Financing

Rent 3000 3000 3000 3000 $12,000

NET CASH FLOW

$3800 $1900 $1900 $1425 $9025

Page 32: Crossfit ozona pp final

Year 2 Cash Flows

Cash Flows Q1 Q2 Q3 Q4 Year 2

Operations

Net Income 8750 8750 8750 8750 $35,000

Cash 3000 3000 3000 3000 $12,000

Investing

Equipment 3750 3750 3750 3750 $15,000

Office 200 200 200 200 $800

Financing

Rent 3000 3000 3000 3000 $12,000

NET CASH FLOW

$4800 $4800 $4800 $4800 $19,200

Page 33: Crossfit ozona pp final

Year 3 Cash Flows

Cash Flows Q1 Q2 Q3 Q4 Year 3

Operations

Net Income 12,500 12,500 12,500 12,500 $50,000

Cash 1500 1500 1500 1500 $6,000

Investing

Equipment 2250 2250 2250 2250 $9,000

Office 200 200 200 200 $800

Financing

Rent 3000 3000 3000 3000 $12,000

NET CASH FLOW

$8550 $8550 $8550 $8550 $34,200

Page 34: Crossfit ozona pp final

Balance SheetOpening Day End Y1 End Y2 End Y3

ASSETS

Current

Cash 9000 10,000 20,000 40,000

Equipment(Depreciated Worth)

15000 10,000 20,000 25,000

TOTAL ASSETS

24,000 20,000 40,000 65,000

LIABILITIES

Facilities(Rent) 2,000 12,000 12,000 12,000

Crossfit Affiliation

3,000 3,000 3,000

New Equipment 15,000 15,000 9,000

Wages 10,000 25,000

TOTAL LIABILITIES

$20,000 12,000 40,000 49,000

Net Worth $4,000 $8,000 $0 $16,000

Page 35: Crossfit ozona pp final

Crossfit Ozona

The balance sheet for a crossfit gym is fairly simple. The only true asset we have other than cash is our equipment. In the first two years we will spend $30,000 and another $9,000 in year 3, and assume its depreciation in the Assets columns.

Our liabilities are limited as well as we have saved the majority of the money needed to open the gym. Therefore, we have no loans or any real debt.

Page 36: Crossfit ozona pp final

Financial Ratios

● The following slides will include the key ratios Crossfit Ozona will be using to keep track of its business.

● As the first year is a bit of a struggle, the following will include the next three years of projected ratios.

Page 37: Crossfit ozona pp final

Gross Margin Percentage

Gross Margin

Year 1 Year 2 Year 3

0% 35% 55%

As you can see, in years two and three, the gym begins to profit and our margins skyrocket. Costs will stay low, and revenue increases.

Page 38: Crossfit ozona pp final

Net Operating Income

Year 1 Year 2 Year 3

($9725) $12,400 $27,400

Net Operating Income

While we lose money in the first year, in the following years our operating expenses stay the same and profits increase. As a result, the Net Operating Loss in year one becomes a Net Operating Income.

Page 39: Crossfit ozona pp final

Net Profit Margin

Another good indication that the business will grow rapidly following year one. In year two, $.35 of each dollar goes to the bottom line, while it is $.55 in year three.

Net Profit Margin Year 1 Year 2 Year 3

(.76) 35% 55%

Page 40: Crossfit ozona pp final

Liquidity Ratios

Knowing the liquidity of our business is important. The current ratio is more in line with our business, however, using our gym equipment as “inventory”, it gives us a good idea of short term ability to pay for debts including our most expensive asset.

Year 1 Year 2 Year 3

Current Ratio 2.3 1.1 1.3

Quick Ratio 1.5 .63 .82

Page 41: Crossfit ozona pp final

Formulas for Ratios

Key Financial Ratios Formula

Gross Margin Gross Margin = Gross Profit/Revenue

Net Operating Income NOI = Gross Income – Operating Expenses

Net Profit Margin Net Profit Margin = Net Income/Revenue

Current Ratio Current Ratio = Current Assets/Current Liabilities

Quick Ratio Quick Ratio = Assets – Inventories / Liabilities

Page 42: Crossfit ozona pp final

Milestones

Level 1 Crossfit certification

Create Business Plan

Handle Legal Work

Develop Website

Negotiate Lease

Order Equipment

Apply/Pay for Crossfit Affiliation

Set up Equipment

Finishing touches to gym

Grand Opening

1st member

20 members

Open for 1 year

Break even/Earn profits

Page 43: Crossfit ozona pp final

Call to Action

Crossfit is changing the way people exercise everyday. It is revolutionizing the fitness world and the key to its success is its simplicity. At Crossfit Ozona we use this “back to basics” approach, along with a strong sense of community and encouragement to ensure all of our members are reaching and exceeding their goals. Take a chance and step out of your comfort zone. Come check out our facility and people, and we promise your workouts, and possibly your life, will never be the same.