G-Rat Business Plan
Group 1
05/01/2023
—
ENTP 6370
—
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Executive Summary
Introduction
G-Rat is a fitness technology startup based in Dallas that utilizes 3D modeling and AI to curate personalized
fitness plans for its users. The company is committed to making fitness more fun meanwhile helping its
customers reach their goals in an optimal and efficient way by leveraging advanced technology.
The Company
G-Rat currently has five full-time executives and 10 freelancers/contractual employees and is in the pilot phase
to gather customer feedback. The company's owners are fitness enthusiasts who have worked in various
industries.
Products
The G-Rat mobile application is available on both iOS and Android and provides postural guidance, fitness
programs, and nutritional advice.
The Market
The fitness industry is a large market with various direct and indirect competitors. G-Rat competes primarily
against other fitness applications in the market. However, fitness applications have not optimally utilized
technological advancements, which leads to a high customer churn rate. G-Rat believes it can revolutionize the
industry by fully utilizing technological advancements.
Target Market
G-Rat's target market is currently college students who lack guidance and are not financially stable.
Financial Considerations
The company has bootstrapped 250K and intends to raise 950K after the pilot runs to provide the required
financing. G-Rat aims to reach a million subscribers in a year and plans to launch a full fledge subscription
model in the next two years.
Mission
G-Rat's mission is to help fitness enthusiasts reach their potential and make fitness sessions more fun. The
company also aims to create a community of like-minded individuals who can support and motivate each other
in their fitness journeys.
Strategy
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To achieve its mission, G-Rat plans to invest in continuous research and development to improve the
application and provide more value to its users. The company also plans to integrate social media features into
the application to create a platform where users can share their progress, connect with other fitness enthusiasts,
and receive support from the community.
Additionally, G-Rat plans to leverage its partnerships with fitness influencers to increase customer traction and
reach. The company will collaborate with these influencers to create content, promote the application, and reach
a wider audience.
G-Rat also intends to offer personalized coaching services to its users in the future. By doing so, the company
can provide a more comprehensive fitness experience to its users and further differentiate itself from other
fitness applications.
The Problem
Problem Statement:
Current fitness applications often fail to provide users with personalized, engaging, and comprehensive fitness
experiences, leaving many users struggling to achieve their goals and maintain their motivation over time.
Many fitness apps provide generic exercise plans that do not consider the unique needs, fitness levels, and
limitations of each user, resulting in a lack of progress and user frustration. Additionally, many fitness apps
focus solely on exercise and do not provide guidance or support for nutrition, recovery, or overall wellness,
which are critical aspects of a comprehensive fitness journey.
Opportunity:
The fitness industry is a huge market, with vast potential for innovative solutions that can address the unmet
needs of users seeking personalized, engaging, and comprehensive fitness experiences. The rise of advanced
technologies such as 3D modelling and AI offers a unique opportunity to provide users with personalized
guidance and support, and to create a more engaging and interactive fitness experience. By leveraging these
technologies, G-Rat can differentiate itself from other fitness apps and establish itself as a leader in the industry.
Unmet Need:
Users need personalized guidance and support to help them achieve their fitness goals, stay motivated and
engaged, and address all aspects of their fitness journey, including nutrition, recovery, and overall wellness.
Many users struggle to achieve their goals due to a lack of progress or motivation and need a more personalized
and engaging fitness experience to stay on track. Additionally, users need guidance and support for all aspects
of their fitness journey, including nutrition and recovery, which are often overlooked by traditional fitness apps.
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Solution:
G-Rat leverages advanced technologies such as 3D modeling and AI to provide personalized guidance and
support to users, offering a fun and interactive fitness experience that goes beyond just exercise. G-Rat uses 3D
modeling to capture data points and AI models to analyze these data points, allowing for personalized guidance
and support based on each user's unique needs and fitness levels. G-Rat also provides guidance and support for
nutrition, recovery, and overall wellness, creating a more comprehensive and holistic fitness experience for
users. G-Rat aims to build a supportive community of fitness enthusiasts to help users stay motivated and on
track with their goals, providing the personalized and engaging fitness experience that users need to achieve
their objectives.
The MVP for G-Rat would essentially be a stripped-down version of their full product, with a focus on the core
features that are essential to its functionality. This approach allows the company to launch a product quickly and
start gathering feedback from users, without investing too much time or money upfront.
The first feature of the MVP would be body scanning, which is the foundation of the G-Rat product. Users
would be able to take 3D scans of their bodies using the app's camera, and the app would capture data points
such as body fat percentage, muscle mass, and other metrics. The app could use machine learning algorithms to
improve the accuracy of the scans over time, and the user would be able to compare their scans from week to
week to track their progress. Our app reconstructs the 3D pose of a person, segments its movement into exercise
repetitions, and identifies in real-time the deviations between standards learned from trainers and the execution
of a trainee. As a result, it provides quantitative feedback for the correct execution of exercises in 3D.
Based on the data captured from the 3D scans, the app would generate a customized fitness plan for each user
using AI algorithms. The plan would include exercises and nutrition advice tailored to the user's body type and
fitness goals. This personalized approach is a key differentiator for G-Rat and would be a major selling point for
the MVP.
The third feature of the MVP would be progress tracking. As users follow their customized fitness plans, they
would be able to track their progress over time using the app. This feature could include graphs and charts to
visualize changes in body composition, as well as the ability to set and track goals.
Finally, the MVP could include social features to keep users engaged and motivated. For example, the app
could include challenges and leaderboards to encourage friendly competition among users. Users could also
connect with friends through the app to share their progress and stay accountable.
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By launching an MVP with these core features, G-Rat can quickly test the market and gather feedback from
early adopters. The company can use this feedback to improve their product and add additional features based
on user needs and market trends. This approach allows G-Rat to be agile and responsive to customer feedback,
while still delivering a compelling product that meets the needs of its target audience.
Working:

We consider the input of exercise movement of a trainee, transform it to 2D human reconstruction, and a
sequence of 3d skeletons is fed to our repetition segmentation algorithm. It is then computed to a
signature for each repetition of the trainee and compared to the reference signature of the instructor. This
gives the critical performance of the trainee and populates a reference assessment table based on which
grammar generates natural language feedback.

We use Angular features such as articulation angles at joints, angles between limbs, and person-centered
3D axes. The instructor’s angles have similar magnitude, whereas a Trainees angle can be chaotic.

The results in repetition segmentation are robust to the accuracy of estimated 3D poses. It is more
accurate when segmentation uses multi-view and is fine-tuned with motion-captured data.
Industry Overview and Market Analysis
Outlook
The fitness industry is a large and growing market, with an estimated value of $87 billion. One of the fastestgrowing segments of this industry is the fitness app market, with around 84 million people currently using fitness
apps. This market is expected to continue to grow at a significant rate.
G-rat is a fitness app that uses 3D modeling and AI technology to create customized workout plans for each user,
offering a unique value proposition that sets it apart from other fitness apps. By capturing data on a user's form
and tracking weights and reps, G-rat can provide a more accurate and reliable assessment of progress, making it
easier for users to break cycles of stagnant growth and achieve their fitness goals.
While there is competition within the fitness app market, G-rat's use of 3D modeling and AI technology can help
it differentiate itself and attract a loyal user base. With the continued growth of the fitness app market, there is
significant potential for G-rat to succeed and carve out a niche in the industry.
By providing users with a comprehensive and convenient fitness solution, G-rat can tap into a large and growing
market while offering a unique and innovative approach to fitness tracking and progress.
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Trends
1. Growing popularity of fitness apps: As mentioned earlier, the fitness app market is one of the fastestgrowing segments of the fitness industry, with a large and growing user base. Fitness apps provide users
with a convenient and affordable way to access personalized fitness plans, track their progress, and
manage their diets.
2. Increased focus on personalization: With so many fitness options available, consumers are increasingly
looking for solutions that are tailored to their specific needs and preferences. Personalized workout plans
and nutrition recommendations are becoming more important, and technologies like AI and 3D modeling
can help provide users with more accurate and customized solutions.
3. Expansion of the health and wellness market: The fitness industry is no longer just about gym
memberships and fitness equipment. Health and wellness have become an increasingly important aspect
of people's lives, and the market has expanded to include a variety of products and services that cater to
this trend. This includes nutrition supplements, wellness retreats, and fitness apps that incorporate mental
health and mindfulness.
4. Shift towards online and at-home workouts: With the COVID-19 pandemic forcing gym closures and
social distancing measures, there has been a significant shift towards online and at-home workouts. This
trend is expected to continue even as gyms reopen, as consumers have grown accustomed to the
convenience and flexibility of working out from home.
Market Analysis
The fitness industry is a rapidly growing sector, driven by increasing health awareness, rising obesity rates, and
a growing preference for active lifestyles. The sector includes various segments such as fitness centers, health
clubs, sports clubs, yoga studios, and home fitness equipment. The global fitness industry is projected to grow
from $87 billion in 2020 to $105 billion by 2024, at a CAGR of 3.7%. [Market Research Future. (2019)]
The industry is highly competitive, with many players vying for market share. Traditional fitness centers and
health clubs face competition from newer players such as boutique fitness studios and online fitness platforms.
The rise of virtual and remote fitness options, driven by technological advancements and the COVID-19
pandemic, has added further competition to the sector.
The trend towards personalized fitness plans and individualized workouts is driving innovation in the sector.
Fitness apps and wearables are becoming increasingly popular, providing users with personalized training
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programs, and tracking of their fitness progress. Artificial intelligence (AI) and machine learning (ML) are also
being used to personalize fitness plans and provide insights based on user data.
The market is highly fragmented, with no single player dominating the sector. However, there are a few
established players such as Planet Fitness, 24 Hour Fitness, and Equinox. In addition, there are numerous niche
players catering to specific fitness needs and preferences.
Overall, the fitness industry is poised for continued growth in the coming years, driven by rising health awareness,
increasing adoption of personalized fitness plans, and technological advancements. However, intense competition
and changing consumer preferences will require industry players to remain agile and innovative to stay ahead in
the market.
The market needs that G-rat can fulfill:
1. Customization: People have different fitness goals, body types, and fitness levels. There is a need for
customized fitness plans that cater to everyone’s needs and help them achieve their goals effectively.
2. Accuracy: Traditional tracking methods like pen and paper or manually entering data into an app can be
time-consuming and prone to errors. There is a need for a more accurate and efficient way to track fitness
progress, form, and other relevant data.
3. Timesaving: Fitness enthusiasts often need to spend a significant amount of time researching workouts,
tracking progress, and adjusting their routines. There is a need for a platform that can save time by offering
customized plans and tracking progress in one place.
4. Convenience: Many people have busy schedules and find it challenging to make time for workouts. There
is a need for a fitness app that can offer flexibility, convenience, and accessibility, allowing users to work
out anytime and anywhere.
5. Motivation: Staying motivated and consistent is essential to achieving fitness goals. There is a need for an
app that can offer personalized motivation and support, pushing users to break through plateaus and reach
new milestones.
G-rat can address these market needs by offering 3D modeling to track form and progress accurately, using
artificial intelligence to create customized fitness plans and diets, and saving time by tracking everything in one
place. The app can provide convenience and flexibility by allowing users to work out anytime, anywhere, and
offer personalized motivation and support to help users stay consistent and motivated.
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G-rat differentiates itself from competitors through its use of 3D modeling and AI technology to create a
customized fitness program for each user. The app captures a user's form and tracks their weights and reps in realtime, which allows for more accurate progress tracking and program customization.
Additionally, G-rat's focus on breaking cycles of stagnant growth and helping users advance at a consistent rate
sets it apart from competitors that primarily focus on tracking and logging workouts.
Furthermore, G-rat's user-friendly interface and ease of use make it accessible for all health-conscious individuals,
even those without a deep understanding of biology or fitness.
Overall, G-rat's combination of advanced technology, personalized programming, and ease of use sets it apart
from competitors and positions it as a leader in the fitness app industry.
A competitive matrix for G-rat compared to a few examples of competition would look like:
Company
Name
Progress
Technology
Customization
Tracking
Ease of Use
Highly
G-rat
3D modeling, AI
customizable
Real-time tracking User-friendly
Limited
MyFitnessPal None
customization
Manual logging
User-friendly
Moderate
Altis
AI, Machine learning Customization
Real-time tracking User-friendly
Moderate
InsaneAI
AI, 2D image capture Customization
Real-time tracking Poor UI
Highly
JEFIT
None
customizable
Moderately userManual logging
friendly
Competitive Analysis
Direct Competitors:
1. MyFitnessPal: Offers users a comprehensive suite of features, including calorie and nutrient tracking,
personalized workout plans, and a social community for motivation and support. Offers a free version
with basic features such as calorie tracking, and a premium version for $9.99/month or $49.99/year that
includes additional features such as personalized nutrition goals and ad-free experience.
2. Altis: Offers users a range of workout plans created by professional trainers, personalized
recommendations, and integration with AI and machine learning. Offers a premium version for
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$14.99/month or $119.99/year that includes unlimited access to all workouts and personalized
recommendations.
3. InsaneAI: Offers users fitness tracking and analysis, personalized workout plans, using AI and 2D image
capture. Offers a premium version for $9.99/month or $79.99/year that includes additional features such
as personalized insights and guidance.
4. Aaptiv: Offers personalized audio workout classes that use AI to adjust workout intensity based on user
feedback and performance, integration with fitness trackers, and a wide range of workout options. Offers
a free trial and then charges $14.99 per month or $99.99 per year for premium features, such as
personalized audio workout classes and integration with fitness trackers.
Indirect Competitors:
5. YouTube: Offers users a wide range of free workout videos and tutorials created by fitness influencers
and trainers.
6. Apple Health: Offers users a suite of health and fitness tracking features, including step tracking,
nutrition tracking, and integration with other fitness apps and devices.
7. Fitness Instructor
SWOT Analysis
Strengths:

User-friendly interface that is easy to navigate.

Wide variety of workout routines and nutrition plans to choose from.

The use of 3D modeling and AI to create a tailored fitness program.
Weaknesses:

Limited brand recognition and awareness compared to established competitors.

May be perceived as less credible or trustworthy compared to traditional fitness programs or personal
trainers.
Opportunities:

Partner with fitness influencers or gyms to increase brand recognition and credibility.

Expand into new markets such as corporate wellness or health insurance partnerships.
Threats:
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
Other major competitors implement our 3D modeling technology.

Increasing concerns over privacy and data security.

Rapidly evolving technology and fitness trends may require significant updates and investments to stay
competitive.
Business Model
G-Rat operates on a freemium business model, where the basic version of the app is offered for free, and
advanced features and personalized workout plans are available to premium subscribers for a fee.
Key Partnerships: G-Rat partners with fitness equipment manufacturers, nutrition supplement companies, and
fitness apparel brands to cross-promote and attract new users.
Key Activities: G-Rat's key activities include developing and maintaining the app, conducting research and
development to enhance features and functionality, and marketing and promoting the app to attract and retain
users.
Key Resources: G-Rat's key resources include its technology infrastructure, software development team, fitness
and nutrition experts, and marketing and sales team.
Value Proposition: G-Rat's value proposition is its use of 3D modelling in connection with Artificial
Intelligence to help improve form, nutrition and workout to help customers reach their goals in effective and
efficient manner.
Customer Segments: G-Rat targets college students and young adults aged 18-30 who are interested in fitness
and technology, fitness enthusiasts looking for personalized and data-driven workout plans, and individuals who
prefer working out at home or have limited access to gyms.
Revenue Streams: G-Rat generates revenue through premium subscriptions, where users pay a monthly or
annual fee to access advanced features and personalized workout plans, in addition to this we will earn money
from ad revenue and cross promotional deals.
Cost Structure: G-Rat's cost structure includes software development and maintenance costs, marketing and
advertising expenses, salaries and benefits for employees, and overhead costs associated with running the
business.
Overall, G-Rat's business model centers around offering a free app with basic features to attract a large user
base and converting a portion of those users to premium subscribers through personalized and data-driven
workout plans. By partnering with key players in the fitness industry, conducting research and development to
enhance features, and marketing and promoting the app effectively, G-Rat aims to establish itself as a leader in
the fitness technology industry.
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Marketing Plan
Objectives

To acquire 100,000 users for the free model within 6 months of launch.

To convert 20% of free users to premium subscribers within the first year.

To increase brand awareness and visibility in the fitness industry.

To establish G-Rat as a leader in fitness technology.
Target Audience G-Rat's target audience consists of the following groups:

College students and young adults aged 18-30 who are interested in fitness and technology.

Fitness enthusiasts who are looking for personalized and data-driven workout plans.

Individuals prefer working out at home or having limited access to gyms.
Marketing Channels and Activities
A. Free Model:
Social Media Marketing: Utilize Instagram, Facebook, and Twitter to showcase product features, offer tips and
insights, and engage with potential customers. Use influencer marketing to increase brand awareness and attract
new users.
Content Marketing: Create high-quality blog articles, videos, and infographics that provide valuable fitness and
nutritional insights and attract potential customers to the app.
Email Marketing: Use email campaigns to nurture leads and convert them into users. Offer exclusive content
and early access to new features to incentivize sign-ups.
Public Relations: Leverage PR to secure media coverage and reviews in fitness and technology publications,
highlighting G-Rat's unique features and benefits.
B. Premium Model:
Referral Marketing: Offer existing subscribers’ incentives to refer their friends and family to the app. Provide
exclusive discounts, free months, or other rewards for successful referrals.
Paid Advertising: Use paid search, display, and social media ads to target potential customers who are interested
in fitness and technology. Use retargeting ads to re-engage users who have shown interest but have not yet
subscribed.
Partnership Marketing: Collaborate with other companies in the fitness industry, such as fitness equipment
manufacturers, nutrition supplement companies, or fitness apparel brands, to cross-promote and attract new
users.
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In-app Promotions: Use in-app notifications and messages to offer exclusive discounts or limited-time
promotions to existing users. Encourage users to upgrade to premium for access to advanced features and more
personalized workout plans.
Key Performance Indicators (KPIs)
Number of app downloads and user sign-ups - This KPI will measure the number of new users who are
downloading and signing up for the app.
Conversion rate from free to premium subscribers - This KPI will measure how many free users are converting
to premium subscribers.
Cost per acquisition (CPA) for paid channels - This KPI will measure the cost of acquiring new users through
paid channels such as social media and search engine advertising.
Engagement rate on social media and email campaigns - This KPI will measure how many users are engaging
with G-Rat's social media content and email campaigns.
Customer satisfaction and retention rates - This KPI will measure how satisfied users are with the app and how
likely they are to continue using it over time.
Overall, G-Rat's marketing plan focuses on leveraging various channels to attract and engage potential
customers, while offering a free model to build brand awareness and establish a loyal user base. Once the user
base is established, the company can focus on converting users to premium subscribers through various
strategies, including referral marketing and in-app promotions. By measuring key performance indicators, GRat can continuously optimize its marketing efforts to achieve its objectives and establish itself as a leader in
the fitness technology industry.
Marketing
Activity
Channel
Start
End Date
Date
1/6/2023 Ongoing
Budget
Expected
Actual
Results
Results
Social Media
Instagram,
$10,000 50,000 new
Marketing
Facebook,
followers,
Twitter
20%
engagement
rate, 5,000
app
downloads
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N/A
Influencer
Collaborate
1/6/2023 31/08/2023 $5,000
Marketing
with 10
followers,
fitness
2,000 app
influencers
downloads
1/6/2023 Ongoing
Content
Create 10
Marketing
blog
website
articles, 5
visitors,
videos, 5
2,000 app
infographics
downloads
1/6/2023 Ongoing
$7,500
20,000 new
$3,000
10,000
Email
Create and
Marketing
send 4
conversion
email
rate, 500 app
campaigns
downloads
1/7/2023 31/12/2023 $8,000
5%
Public
Secure
100,000
Relations
coverage in
impressions,
5 fitness
2,000
and
website
technology
visitors, 500
publications
app
N/A
N/A
N/A
N/A
downloads
Referral
Offer
1/9/2023 Ongoing
$4,000
1,000
Marketing
incentives
successful
for
referrals,
successful
200
referrals
premium
N/A
subscribers
Paid
Social
Advertising
media,
website
search
visitors,
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1/7/2023 Ongoing
$15,000 10,000
N/A
engine,
1,000 app
display ads
downloads
Partnership
Collaborate
1/8/2023 Ongoing
Marketing
with 3
website
fitness
visitors, 500
industry
app
partners
downloads
1/9/2023 Ongoing
$6,000
$2,500
2,000
In-App
Offer
10%
Promotions
discounts
increase in
and
premium
promotions
subscriptions
N/A
N/A
to existing
users
Notes on Detailed Marketing Plan:
Acquisition Budget: $50,000
This number was chosen based on industry benchmarks and the company's goals. It is important to have a
sufficient budget to acquire new users through paid channels such as social media and search engine
advertising, while keeping the cost per acquisition (CPA) within an acceptable range.
Conversion rate from free to premium subscribers: 20%
This conversion rate was chosen based on industry benchmarks and the company's goals. It is important to have
a realistic conversion rate to ensure that the company's revenue goals are met.
Monthly marketing expenses: $10,000
This number was chosen based on the company's marketing plan and the need to allocate sufficient resources to
drive user acquisition and retention. It is important to have a consistent investment in marketing efforts to
achieve the desired results.
Average revenue per premium subscriber: $10/month
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This number was chosen based on industry benchmarks and the company's pricing strategy. It is important to
have a realistic revenue goal to ensure that the company's business model is sustainable.
Customer lifetime value (CLV): $500
This number was calculated based on the average revenue per premium subscriber and the expected retention
rate. It is important to understand the CLV to ensure that the company's acquisition costs are justified and that
the business model is profitable.
Cost per acquisition (CPA): $10
This number was calculated based on the acquisition budget and the expected number of new users. It is
important to keep the CPA within an acceptable range to ensure that the company's marketing efforts are costeffective.
Retention rate: 75%
This number was chosen based on industry benchmarks and the company's goals. It is important to have a
realistic retention rate to ensure that the company's revenue goals are met and that the business model is
sustainable.
Financial Projections, Funding Plan
Non-Financial Resources:
Running a fitness app requires a variety of non-financial resources that are essential for its success. The nonfinancial resources that are required for our app are:
 Time: Developing and maintaining an app takes a lot of time and effort. It's important to allocate enough
time to ensure that the app is running smoothly and meeting the needs of its users.
 Human Resources: We will need a team of skilled professionals to develop, design, and test the app.
This team could include developers, designers, testers, and project managers.
 Technical Infrastructure: We need access to the necessary hardware and software tools, including
servers, databases, programming languages, and development environments.
 Intellectual Property: The app may require intellectual property protections such as patents, copyrights,
or trademarks. We may need to consult with a lawyer or intellectual property expert to ensure our app is
protected.
 User Feedback: To improve our app, we’ll need to collect feedback from users. This will help us
understand their needs, identify issues, and make improvements to the app.
 Partnerships: Partnering with other companies, organizations, or individuals can help us reach a wider
audience, gain access to resources, and grow our user base.
 Industry Knowledge: Keeping up with industry trends, best practices, and emerging technologies can
help we stay competitive and provide value to our users. Attending industry conferences, reading
industry publications, and networking with other professionals to stay informed.
 Customer Support: Providing excellent customer support is essential to retaining users and ensuring they
have a positive experience with your app. We may need to hire customer support representatives or
develop an FAQ section to help users troubleshoot issues.
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Use of Funds:
For the use of funds, we assume that the company will require $1.5 million in funding to cover the first year of
expenses. We also assumed that the executive team would bootstrap $250,000, leaving a funding gap of $1.25
million. We expect the company to use the funds to cover salaries for the executive and development teams,
office space rent and utilities, marketing and advertising, and other expenses.
Salaries for executive
Year 1
Year 2
Year 3
$200,000
$200,000
$200,000
$500,000
$600,000
$720,000
$120,000
$120,000
$120,000
$300,000
$375,000
$468,750
$80,000
$80,000
$80,000
$100,000
$0
$0
$1,300,000
$1,375,000
$1,588,750
-
-
team
Salaries for
development team
Rent and utilities for
office space
Marketing and
advertising
Other expenses
(software licenses,
etc.)
App development cost
(fixed)
Total Estimated
Annual Cost
Total Funding Needed $7,283,910
(for 5 years)
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Sales Projections Table:
Year Free Users
Premium
Total Users
Subscribers
Premium
Ad
Subscription Revenue
Total
Revenue
Revenue
1
100,000
20,000
120,000
$2,400,000
$300,000
$2,700,000
2
250,000
50,000
300,000
$6,000,000
$750,000
$6,750,000
3
500,000
100,000
600,000
$12,000,000 $1,500,000
$13,500,000
We assumed a conversion rate of 20% from free users to premium subscribers, and an average monthly revenue
per premium subscriber of $10.
We also assumed that the company would acquire 100,000 free users in the first 6 months of launch and that its
user base would grow by 150% each year.
Ad revenue was calculated based on an assumption of $0.25 per 1000 ad impressions and an estimated 4 ad
impressions per user per day.
Total revenue was calculated by adding premium subscription revenue and ad revenue.
For the cost proforma, we assumed that the company would have fixed costs of $100,000 for creating the app.
We also assumed that the salaries for the executive team would be $200,000 per year, and salaries for the
development team would be $500,000 per year. Rent and utilities for office space are assumed to be $120,000
per year, and marketing and advertising expenses are assumed to be $300,000 per year. Other expenses, such as
software licenses and insurance, are assumed to be $80,000 per year.
Category
Year 1
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Year 2
Year 3
Salaries for Executive
$200,000
$210,000
$220,500
$500,000
$525,000
$551,250
Rent and Utilities
$120,000
$125,400
$130,842
Marketing and
$300,000
$315,000
$330,750
Other Expenses
$80,000
$84,000
$88,200
Total
$1,200,000 $1,259,400 $1,321,542
Team
Salaries for
Development Team
Advertising
Cashflow Proforma:
For the cashflow proforma, we assumed that the company would have a cash balance of $250,000 at the
beginning of the year, which is the amount that the executive team is bootstrapping. We also assumed that the
company would generate revenue from premium subscriptions and ads displayed in the free version. We expect
the company to have negative cash flow in the first year due to the initial expenses associated with launching
the app.
Cash balance at
Year 1
Year 2
Year 3
Year 4
Year 5
$250,000
$33,291
$347,122
$561,449
$851,504
$0
$1,794,600
$3,782,880
$6,220,411
$9,120,337
beginning of year
Cash inflow
PAGE 19
Cash outflow
($1,500,000) ($1,500,000) ($1,500,000) ($1,500,000) ($1,500,000)
Net cash flow
($1,500,000) $294,600
$2,282,880
$4,720,411
$7,620,337
Cash balance at end
$33,291
$561,449
$851,504
$1,508,841
$347,122
of year
G-Rat Income Statement (in USD)
Year 1
Year 2
$
Year 2
Premium
Subscriptions
Ad Revenue
$
$
Premium
2,400,000 Subscriptions
300,000 Ad Revenue
Total Revenue
$
2,700,000 Total Revenue
Payroll
$
700,000 Payroll
$
735,000
Marketing Cost
$
300,000 Marketing Cost
$
315,000
Rent
$
120,000 Rent
$
125,400
Other Expenses
$
$
84,000
Total Cost
$
1,200,000 Total Cost
$
1,259,400
Net Income
$
1,500,000 Net Income
$
5,490,600
Premium users
80,000 Other Expenses
$
$
20,000 Premium users
Free users
6,000,000 Premium
Subscriptions
750,000
Ad Revenue
6,750,000
Total Revenue
$
12,000,000
$
$
1,500,000
13,500,000
Payroll
$
771,750
Marketing Cost
$
330,750
Rent
$
130,842
Other Expenses
$
88,200
Total Cost
$
1,322,000
$
12,178,000
Net Income
50,000 Premium users
100,000 Free users
100,000
250,000 Free users
500,000
Year 1
Operating Exp
Net Income
Year 1 Monthly
Revenue
Q1
Q2
January
February
March
April
May
PAGE 20
80,000
90,000
100,000
130,000
180,000
40,000
40,000
40,000
80,000
80,000
40,000
50,000
60,000
50,000
100,000
June
July
August
Q3
September
October
November
Q4
December
Total
Year 2, 3 Quarterly
Revenue
Year 2
Operating Exp
675,000
230,000
250,000
270,000
290,000
330,000
360,000
390,000
2,700,000
80,000
120,000
120,000
120,000
160,000
160,000
160,000
1,200,000
150,000
130,000
150,000
170,000
170,000
200,000
230,000
1,500,000
Net Income Revenue
Year 3
Operating Exp
Net Income
125,940
549,060
1,350,000
132,200
1,217,800
1,350,000
251,880
1,098,120
2,700,000
264,400
2,435,600
2,025,000
377,820
1,647,180
4,050,000
396,600
3,653,400
2,700,000
503,760
2,196,240
5,400,000
528,800
4,871,200
6,750,000
1,259,400
5,490,600
13,500,000
1,322,000
12,178,000
NOTES:

The revenue projections are based on the assumptions made in the sales projections section, considering
the conversion rate from free users to premium subscribers and ad revenue from the free version of the
app.

The cost of revenue is assumed to be 2.6% of revenue, which represents the costs associated with
delivering the premium features of the app.
PAGE 21

Gross profit is calculated by subtracting the cost of revenue from revenue.

Operating expenses include salaries for the executive and development teams, rent and utilities for office
space, marketing and advertising expenses, and other expenses. We assumed that these expenses would
increase at a rate of 2.5% per year.

Net income / (loss) is calculated by subtracting operating expenses from gross profit. The negative net
income in the first year is due to the initial expenses associated with launching the app. The net income
is projected to increase each year as revenue grows and the company becomes more established.

Risk factors:
1.
Competition: The fitness app market is highly competitive, with many established players and new
entrants.

G-rat uses 3D human reconstruction and AI that differentiates it from its competitors.
2.
User Acquisition: Getting users to download and use the app is a significant challenge.

Social media marketing, influencer marketing, email marketing, and content marketing are considered
for advertising our app.

By offering referral rewards, and free trials to encourage user acquisition.
3.
User Retention: Retaining users can be challenging, and many users may abandon the app after a few
uses.

Continuously engage with users and provide value by regularly updating the app with new features,
sending personalized recommendations, and creating a community where users can interact and share
experiences/leaderboards.
4.
Monetization: Having a clear monetization strategy to generate revenue can be challenging.

Charging for the app, offering subscriptions, or having in-app purchases can be a strategy.
5.
Technology: The app's technology must be robust and scalable to accommodate the potential growth in
users.

Using cloud-based services to reduce infrastructure costs.

Ensuring that G-rat is compatible with different devices and operating systems like IOS, and Android.
6.
Data Privacy and Security: the company must prioritize data privacy and security to protect users'
personal information.

Complying with data privacy laws, implementing secure authentication and authorization mechanisms,
and using encryption to protect user data.
PAGE 22
7.
Regulatory Compliance: The company should ensure that the app complies with all relevant regulations,
such as GDPR and HIPAA, depending on the market they are operating in.

The app complies with all relevant regulations by consulting with legal experts and implementing
necessary security and privacy measures.
8.
Funding: Raising funds to develop and market the app successfully.

Seeking funding from venture capitalists, angel investors, or crowdfunding platforms.
Milestone Timeline
Phase 1: Development and Testing (3-6 months)
Conduct market research to identify target audience, analyze competition, and determine product features and
pricing strategy.
Hire a team of developers to build the G-Rat app and website, and a team of designers to create the user
interface and experience.
Develop the app and website, integrating data analytics, workout planning, and user profile customization
features.
Conduct thorough testing of the app and website, ensuring functionality, user experience, and data security.
Launch the beta version of the app to a select group of users for feedback and improvement.
Phase 2: Launch and Acquisition (6-12 months)
Launch the G-Rat app and website to the public, offering a free model to attract new users.
Launch marketing campaigns to increase brand awareness, attract new users, and convert them to paid
subscribers.
Implement referral marketing and loyalty programs to incentivize users to promote the app and retain them as
subscribers.
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Establish partnerships with fitness equipment manufacturers, nutrition supplement companies, and fitness
apparel brands to expand the app's reach and increase revenue.
Continuously monitor user feedback and data analytics to improve the app's functionality, user experience, and
retention rates.
Phase 3: Expansion and Innovation (12-24 months)
Expand the app's features and offerings, such as live streaming workout classes, virtual personal training, and
community engagement.
Explore international expansion opportunities to increase the app's global reach and revenue potential.
Leverage artificial intelligence and machine learning to enhance the app's personalized workout plans and user
engagement.
Continuously innovate and improve the app based on user feedback, industry trends, and technological
advancements.
By following this milestone plan, G-Rat can establish itself as a leader in the fitness technology industry,
acquire a loyal user base, and continuously innovate and expand its offerings.
Appendix
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Cashflow Proforma
1
Amount
0,8
0,6
0,4
0,2
0
0
0
0
0
0
Year
#REF!
#REF!
#REF!
#REF!
#REF!
Cost Proforma
1
Amount
0,8
0,6
0,4
0,2
0
0
0
0
0
0
0
Different Expense
#REF!
#REF!
#REF!
#REF!
#REF!
Income Statement
Amount(USD)
1
0,8
0,6
0,4
0,2
0
0
0
0
0
0
Year
#REF!
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#REF!
#REF!
#REF!
#REF!
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References: -
PAGE 27
1. "Global Fitness App Market Size, Share & Trends Analysis Report by Type (Workout &
Exercise Apps, Nutrition & Diet Apps, Disease Management), Grand View Research, April 2021,
https://www.grandviewresearch.com/industry-analysis/fitness-app-market.
2. "Fitness App Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026),"
Mordor Intelligence, https://www.mordorintelligence.com/industry-reports/fitness-app-market.
3. "Fitness Industry Analysis 2021 - Cost & Trends," FranchiseHelp
https://www.franchisehelp.com/industry-reports/fitness-industry-report/.
4. "Global Fitness Industry Statistics and Research," Statista
https://www.statista.com/topics/1724/health-club-fitness-centers/.
5. "Fitness industry revenue worldwide from 2017 to 2022 (in billion U.S. dollars)," Statista,
https://www.statista.com/statistics/236447/global-fitness-industry-revenue/.
6. "Fitness App Market Size, Share & Trends Analysis Report by Type, by Platform, by Device
Type, by Region, and Segment Forecasts, 2019-2025," Grand View Research, May 2019,
https://www.grandviewresearch.com/industry-analysis/fitness-app-market.
7. "Fitness App Market by Type (Workout & Exercise Apps, Nutrition & Diet Apps), Device Type
(Smartphones, Tablets, Wearable Devices), and Region - Global Forecast to 2026,"
MarketsandMarkets https://www.marketsandmarkets.com/Market-Reports/fitness-app-market246006771.html.
8. "Fitness app market size worldwide from 2016 to 2023 (in billion U.S. dollars)," Statista
https://www.statista.com/statistics/784988/global-fitness-app-market-size/.
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