1. 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!
2. Pain Point Story
It 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
7. 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!
8. 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.
9. 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.”
10. 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
11. Top Competition
Crossfit Rebels
Market: 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.
12. Top Competition
LA Fitness
Market: 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.
13. 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
14. SWOT
WEAKNESSES
Small business
Name not well known
Membership is small
No traditional promotion/advertising
Program design may not appeal to all athletes
15. 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
16. 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
17. Business Model
Deliver 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.”
18. 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.
19. 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 $50 per class.
There is no sign up fee and no hidden charges.
20. Pro Forma Statement
Expense Cost ($)
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
21. 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.
22. 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.
23. Quarter 1 Revenue
Projections
● 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
24. Quarter 2 Revenue
Projections
● 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
25. Quarter 3 Revenue
Projections
● 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
26. Quarter 4 Revenue
Projections
● 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
27. 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
28. 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
29. 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.
30. 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.
34. Balance Sheet
Opening 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
35. 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.
36. 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.
37. 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.
38. 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.
39. 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%
40. 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
41. 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
42. 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
43. 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.
