ENTREPRENEURSHIP WRITTEN EVENT
Tumbling Tots
Skyline DECA
Skyline High School
1122 228TH Avenue Southeast
Sammamish, WA 98075
Chris Johnson
Emily Whan
January 2010
Table of Contents
I. EXECUTIVE SUMMARY .........................................................................................................1
II. INTRODUCTION ......................................................................................................................2
III. ANALYSIS OF THE BUSINESS SITUATION ......................................................................3
A.
Self-analysis ........................................................................................................................3
B.
Trading area analysis ..........................................................................................................5
1. General data: geographic, demographic, economic ........................................................5
2. Competitive data: present competitors (listed and briefly described), competitive advantages
and disadvantages of the proposed business ............................................................................6
C. Market Segment analysis ....................................................................................................8
D.
Analysis of potential locations............................................................................................9
IV. PLANNED OPERATION OF THE PROPOSED BUSINESS/ PRODUCT/ SERVICE .......10
A.
Proposed organization ......................................................................................................10
B.
Proposed product/service ..................................................................................................12
C.
Proposed marketing strategies ..........................................................................................16
V. PLANNED FINANCING .........................................................................................................20
A.
Projected income and expenses ........................................................................................20
1. Projected three-year cash flow ......................................................................................21
2. Projected three-year profit/loss statement.....................................................................22
3. A brief narrative description of the planned growth of the proposed business, including
financial resources and needs ................................................................................................23
B. Proposed plan to meet capital needs .................................................................................23
1. Personal and internal/external sources of financing .....................................................23
2. Plan to repay borrowed funds or provide return in investment to equity funds ...........24
VI. CONCLUSION .......................................................................................................................24
VII. BIBLIOGRAPHY ..................................................................................................................24
VIII. APPENDIX ...........................................................................................................................26
I. EXECUTIVE SUMMARY
Tumbling Tots is a business centered on introducing children to the sport of gymnastics, and providing
children with valuable physical, mental, and social skills through gymnastics. Premium instruction will be provided
at fair prices, and will take place in a nurturing and low-pressure environment with specialized attention given to
each child. With few businesses alike to Tumbling Tots, the services we provide are new and unique and will prove
to be very profitable.
Mission Statement
Target Market
To provide toddler through elementary school aged children with safe,
exciting, and high quality gymnastics instruction at a convenient location;
allowing each child to grow as a person, both mentally and physically.
Toddler through elementary school aged children, with parents living on the
affluent greater eastside (specifically Sammamish), who are looking for fun,
safe, and educational activities for their children to participate in.
Financial Request: $70,000 Bank Loan, with 50,000 dollars of contributed owner’s funds (25,000 each)
Types of Services:
1) After School Classes and Classes w/ Transportation: Children will partake in specifically planned out
classes shaped by their needs, wants, and ages, aimed to teach them the basics of gymnastics. For an
additional fee children will be picked up from their schools and dropped off at Tumbling Tots by our safe
and trained van driver.
2) Saturday Private lessons
3) Special Events Rental
4) Summer Camp
Competitive Advantage
Problem
Proposed Solution
Available Opportunities:
No gymnastics facility shaped
Establish a facility that is unique to the Many new customers and potential for
specifically for children in
area, and provide an easily accessible
future growth as our reputation and
Sammamish
location for parents and children
expertise grows. We will be the only
business of our kind, meaning no direct
competitors that are exactly alike to our
business.
Inconvenient for parents to
Offer a one of a kind service; the
This service will attract a large amount
leave work and pick up child
option of having your child picked up
of business to our facility. People will
from school, then drop them at directly from school by our
choose our business over others due to
the gym
professional and safe van drivers, and
this helpful and practical service
brought to Tumbling Tots.
Lower quality services for
Tumbling Tots provides the highest
Parents will feel that they are receiving
higher prices, and less
quality of instruction, and the cleanest, a great value for their money.This could
individual attention
top of the line facilities. Each lesson
increase our reputation within the
plan is specifically shaped around the
community and also strengthen
needs and wants of that certain child.
relationships with clients.
Cash Flow
Sales and Profits
$800,000
$150,000
Sales
$600,000
$100,000
$400,000
$213,840
$50,000
$256,608
$333,590
$200,000
$0
Nov
Sep
Jul
May
Mar
Jan
Nov
Sep
Jul
May
Mar
Jan
Nov
Sep
Jul
May
Mar
Jan10
$0
2010
2010-2012
Continuously positive cash flow throughout first 3 years
of operation
2011
40%
35%
30%
25%
20%
15%
10%
5%
0%
-5%
-10%
2012
Profitable in the first year; consistently improving profit
and sales as traction is gained
1
Profit
$200,000
II. INTRODUCTION
Tumbling Tots will be a unique gymnastics orientated facility located on the Sammamish
Plateau specializing in after school classes, but also providing Saturday lessons, summer camps,
and facility rentals. This business will provide preschool through elementary school aged
children with an opportunity to take part in recreational gymnastics training centered in a
structured, but fun environment. Children will learn the basics of low level gymnastics, as well
as taking part in activities that will develop team work, social skills, motor skills, and hand eye
coordination; all essential abilities that contribute to a child’s growth. The gym will also supply
each child with a nutritious and well balanced snack before the end of their class. Parents are
welcome to drop their kids off after school, or for an extra fee a van is available to offer
transportation from the child’s school to the gym.
Our Mission:
To provide toddler through elementary school aged children with safe,
exciting, and high quality gymnastics instruction at a convenient location;
allowing each child to grow as a person, both mentally and physically.
In order to successfully run this business, well trained and experienced coaches will be
critical. All of our employees must be certified in CPR/First Aid to ensure the safety of all the
children within our program. Also, prior gymnastics experience and a background with children
is required. Employees will be responsible for creating and organizing interactive lesson plans
that will engage both the child’s body, and mind, as well as offering the highest quality of
supervision.
Due to the lack of gymnastics facilities on the Sammamish Plateau, Tumbling Tots will
give Sammamish families a chance to enroll their children in beginning gymnastics classes that
take place in a close and convenient location. Tumbling Tots will be a moderate sized business
2
partnership looking for future expansion and growth, but will supply personalized care for each
child and will build strong relationships with its clients.
Advisors/Mentors:
BJ Sherman: Mr. Sherman, our DECA advisor, has been teaching business classes for 11 years
at Skyline High School. He has experienced and worked in the real business world, and has a
strong background in accounting. Mr. Sherman will be a very helpful resource to have due to his
knowledge and expertise surrounding the DECA events and competition. He knows what a great
paper must have to be successful, and will give us useful tips and advice to help create a well
written paper.
Jim Johnson: Chris’s dad graduated with a degree in Business from the University of North
Dakota, and has a Master’s Degree in Business from St. Thomas. He now works a successful
sales manager and has many years of experience in the business field. He also helps us
brainstorm original and creative ideas for our business; and inspired us to create a business that
incorporated our interests and passions.
III. ANALYSIS OF THE BUSINESS SITUATION
A.
Self-analysis
Our business background has involved education through classes and experiences
through working in real business environments. We have both been involved with gymnastics for
the majority of our lives. Emily participated in the gymnastics program throughout middle
school, and has been on the Skyline High School gymnastics team for two years. Chris has
competed in high level competitive gymnastics since the time he was 8 years old. Our combined
knowledge of the workings of the gymnastics world will give us a heavy advantage when
creating a business concerning this area.
3
Chris has had hands on experience working in a business similar to the one we are
developing. He has worked at Emerald City Gymnastics Academy, a profitable business, for the
past five months, and taught gymnastics classes for the younger aged children. He has witnessed
how their business operates and the techniques they use to keep their business thriving. This
experience will prove to be very helpful and useful to us because he has been involved with a
similar business.
Also, we are both currently enrolled in the International Baccalaureate Business class at
Skyline High School, a college level course. This class focuses on the basics of accounting,
financing, marketing, and the operations of a business. We are learning things like how to create
financial statements, how to effectively run a business, and how to analyze business failure and
success. These are necessary skills that are essential for a business to run smoothly.
Our combined business strengths include math and computing skills, responsibility,
organization, and creativity. Math and computing skills are very useful for the areas of a business
including marketing, finances, and accounting. We both have a very strong sense of
responsibility which will help us build good credit with the bank and other stakeholders. We will
also develop good relationships with our customers due to our sense of responsibility towards the
safety and well being of their children. This is a very critical part for our business since we will
be starting from scratch and will need to establish a good reputation within the community. With
organization, we can keep a close eye on where our money is going, and also keep track of when
and to whom payments need to go to. Lastly, having creativity will allow us to come up with
unique ideas that will draw in customers and set our business apart from others.
One our major business weaknesses are that we have never had experience starting up or
running our own company. Even though we have had experience working in businesses and have
4
learned many things involving the functions of a business, we have never managed a real world
business before. We are confident in our abilities, but opening this business will be a learning
process considering that we have some areas lacking expertise.
Gymnastics has been a large part of both childhoods, so we have a passion for creating
this business because we want to provide children with the same positive role gymnastics played
in our lives. This is the most important quality that we have and it will drive our success. We are
excited about starting this business, and this will transfer over to the high quality services we
provide. Although we will be taking a big risk by starting up this company, we both believe that
we possess the qualities and skills to ensure that our business expands and becomes profitable.
B.
Trading area analysis
1.
General data: geographic, demographic, economic
Tumbling Tots will be located in the city center of the Sammamish Plateau, in
Sammamish, Washington which is located in close proximity to many schools, neighborhoods,
and shopping centers. The city Sammamish is located approximately 18 miles East of Seattle1.
To the West of Sammamish are the cities of Bellevue and Redmond, and directly South is the
city of Issaquah1. Sammamish is an upscale community with an average family household
income for of $104,356, which is over twice the average income for the whole state of
Washington2. In 2009, Sammamish was voted the 12th best place to live in the nation by CNN
Money, and attracts many people with high paying jobs due to the surrounding job opportunities
coming from local companies like Microsoft, Starbucks, and Boeing. Many families with young
children are attracted to Sammamish due to its top rated school districts. Issaquah School District
1
2
http://maps.google.com/
http://www.trulia.com/real_estate/Sammamish-Washington/community-info/
5
is ranked at 6th out of 212 in the state, and Lake Washington School District coming in 8th 3. Both
districts have schools located in Sammamish. The population of Sammamish is 34,104 people,
with 11,131 households and 9,655 families4.
2. Competitive data: present competitors (listed and briefly described),
competitive advantages and disadvantages of the proposed business
Gymnastics East is a competitive gymnastics facility located in Issaquah, WA.
Its major strength is that it is a well established business already, with a well known reputation. It
also provides a variety of service like recreational training, competitive teams, and cheer team
training. However, Gymnastics East targets a different market then Tumbling Tots; they are
more focused on upper level gymnastics training, and older customers. Also, The Little Gym is
another competitor located in downtown Issaquah, WA, and is going to be the largest competitor
to our business, Tumbling Tots. Some of their strength is that they are a large scale business with
300 locations in 21 different countries. They focus on 12 months-12 year old children which are
our same target market, and they have a reputation for being a highly regarded child gymnastics
facilities. They also have very organized and well set up lesson package that provide a variety of
class, which is an advantage. A disadvantage is that they do not provide transportation from
schools to the gym, which is what will set our business apart from theirs and make it unique.
Also, the location is a disadvantage because parents on the Sammamish Plateau have to drive far
out of their way and through many busy areas in order to reach a facility for their children.
Starting our business in Sammamish will bring in many customers and new clients since there
are no facilities similar to Tumbling Tots in Sammamish. Not only gymnastics facilities our
competitors to our business; all other activities a child could do are considered competitors.
3
4
http://www.schooldigger.com/go/WA/districtrank.aspx
http://sammamish.areaconnect.com/statistics. htm
6
Below is a table laying out the services, and the advantages and disadvantages of the services our
competitors provide.
Competitor
Gymnastics
East5
The Little
Gym6
Karate
West7
Dance
Premier
Description
Large, competitive
gymnastics facility
located in Preston,
WA, a neighboring
city to Issaquah.
Services
Club gymnastics
training
 Recreational
lessons
 Cheer team
training

Large franchise
with over 300
locations in over 21
different countries.
Offers child
gymnastics and
other programs.



Martial arts school
with nearly 1000
members, and
facilities in
Sammamish and
Mercer Island


An elite,
competitive dance
studio and dance
team located in
Sammamish



Cheer team
training
 Dance
 Parent/Child
classes
 Preschool/kindergarte
n gymnastics
Karate Lessons
Teen/ child/ Adult
lessons
 Self defense
lessons
Dance classes
Private dance
lessons
 Competitive Dance
team


Advantages
Targets the high
expense, time
consuming world of
competitive
gymnastics
Is well established
and has a good
reputation in the
community
Profitable
Offers a wide variety
of unique services
Large company with
lots of capital and
sources of finance

Disadvantages
Mostly services
the upper age
range of children
and teens
 High Prices
 Inconvenient
location


Large business
so not very
personalized
 High Prices
 Inconvenient
location
 Does not
specialize in one
specific area of
expertise
Known across the
nation as one of the
best
 Top of the line
facility
 Well established
 Already gained
stability and traction




Well established and
already profitable
 Appeal to children
very serious about
dancing
 High quality
instruction
 Passionate
owners/instructors



High prices
Less focused on
education and
development,
more on skills
Already
introduced into
the community,
so not much
potential for
growth
Only services
children from 714 years old
Higher pressure
environment
Small facility,
with less space
In order to more deeply display the strengths and weaknesses Tumbling Tots has in
comparison to its competitors, we have created a SWOT analysis table (See Appendix B). The
5
www.gymnasticseast.com
http://www.thelittlegym.com/Pages/default.aspx
7
http://www.karatewest.com/programs.shtml
6
7
most prominent strength of our business is the prime location, which will bring in many
customers and more profit. Also, our high quality instruction and strong relationships with our
clients is a major strength. A potential weakness is the slightly higher prices we charge compared
to other possible activities; only because gymnastics is a very expensive sport. Although the
prices are more, we believe that both the quality of instruction we offer and the value for the
customer’s money is much better than our competitor’s.
C.
Market Segment analysis
Tumbling Tots will target the children ranging from toddlers to elementary
school aged, with parents living mostly in Sammamish, but also in the surrounding areas of
Issaquah, Bellevue, and Redmond. Sammamish has a population of 34,104 people, and below is
a segmentation chart, breaking up the different percentages of age ranges within this population.
Segmentation Chart
2.39%
2.43% 1.28%
0.28%
0 to 14 years
4.26%
15 to 19 years
20 to 24 years
28.08%
17.97%
25 to 34 years
35 to 44 years
45 to 54 years
7.36%
55 to 59 years
60 to 64 years
22.02%
11.16%
2.78%
65 to 74 years
75 to 84 years
8
As shown by the arrow and chart above, our target market falls within the 0-14
year old age range. After careful consideration, we have realized that focusing on this age group
to provide our services to will be the most successful and profitable for our business. As more
families with children move into Sammamish, our business will have the opportunity to grow
and expand. We will shape our programs and services to fit the needs and wants of these aged
children, and to appeal to their parents. Within the city boundaries of Sammamish there are nine
different elementary schools servicing children in grades k-58, offering many opportunities for
parents to take advantage of our transportation service offered to take children from school
directly to the gym (See Proposed Services Chart on pg 16). Also, after careful research we have
set our prices so they will appeal to both the working class and higher class families with
children of these ages. Sammamish has a very high average income level; so many parents will
be willing to pay the extra amount of money to give their children this experience.
D.
Analysis of potential locations
In order to determine what location was best suited for Tumbling Tots, we took into
account factors like the price of renting a space, how many elementary schools were located
nearby, what the average income level was, how well the location fit our target market, and how
frequently the location was visited. Also, here are some other steps we took before choosing a
location9:
1. Choose a particular location or community and research if it contains your target
market
8
9
http://www.trulia.com/real_estate/Sammamish-Washington/schools/#ofschools
http://www.starting-a-smallbusiness.com/business-location.html
9
2. Consider other specifics of the location like cost, security, traffic patterns,
competition, interior and exterior design, zoning laws, and the locations past.
3. Scout out possible locations in the desired area
4. Make contact with the owner of the space and negotiate terms of the lease or rent,
like price and how long the rent will last for
After much discussion, we decided that the city of Sammamish would be the best place to
start up Tumbling Tots. It is highly populated with many families and is also nearby to many
elementary schools and preschools. The cost for renting a space in this area is fairly high
compared to other areas, but the average income is also very high in comparison, so people will
be more willing to spend extra money. Other external factors that could greatly affect our
business, but are beyond our business’s control were also considered in the PESTLE analysis
(See Appendix E).Our target market also makes up a very high percentage of Sammamish’s total
population.
Specifically, our gym will rent out a shop located directly in the center of downtown
Sammamish, right across the street from the shopping center of Saphron. This is a heavily and
frequently visited area, home to many popular shops, restaurants, and grocery stores, like
Safeway, Jamba Juice and Taco time. It is also in close proximity to many developments,
neighborhoods, and apartment complexes, bringing in many customers. We will rent out a 3,000
sq. foot space, for 3,000 dollars per month, totaling at 36,000 dollars per year.
IV. PLANNED OPERATION OF THE PROPOSED BUSINESS/ PRODUCT/ SERVICE
A.
Proposed organization
After research on the advantages and disadvantages of the various types of ownership
structures we have decided that Tumbling Tots will be a general partnership business. In a
general partnership all profits and liabilities are shared between the partners depended on the
10
partnership agreement that is written up. This states that all proprietors will have equal rights and
voice within the business and the contract must be signed by all partners. Profit and debts will
also be distributed equally between all partners. Partners will have exclusive control over the
business, and will also be awarded with an annual salary (See Salary Table on pg. 14). Here is a
chart highlighting the advantages and disadvantages of a partnership.
Partnership Table10
Advantages
Shared decision making
Losses shared between partners
More privacy and less legal formalities
then corporate organizations
Partners can specialize in different areas
of management
Additional capital injected by each
partner
Disadvantages
Profits are shared
Unlimited liability
Unable to raise capital by selling shares
All partners are bound to a decision made
by any one of them
Arguments, falling outs, or disagreements
between partners due to differences in
opinions, causing conflict
After discussion, we found that the advantages of a partnership outweighed the
disadvantages, since we will be able to overcome the disadvantages within our control. We know
that we work well together from previous experiences and that our partnership in this business
will have a positive impact. After deciding on how the business would be owned, we took the
basic steps for starting a business as follows11:
1. Researching and picking a location
*we chose Sammamish because there are no other businesses alike to it on
the plateau, and it would provide us with the most customers
2. Negotiate terms of lease for the specific location with the owner
3. Send in an application for a certificate of occupancy and a business license
*both legal formalities necessary to start up our business
4. Purchase necessary fixed assets
5. But other inventory, current assets
6. Hire employees
10
11
http://www.residual-rewards.com/business-partnerships.html
http://www.business.gov/start/start-a-business.html
11
7. Begin promoting our business through our promotion plan (see tables on pg. 17 -20)
Below is a chart is the planned organization of the “Tumbling Tots” staff, laid out
in a staffing organization chart. This shows the employees we need to hire, and also who answers
to whom in the business.
Organization Chart
Owner 1
Owner 2
Owners
Assistants/Front
Desk Help
Program Director
Coaches
Van Driver
Cleaner
Brief Job Descriptions:
Owners (Emily and Chris): The owners have a wide variety of responsibilities. They are in
charge of managing the business and making sure that it is financially heading the right direction.
They are in charge of making all decisions on behalf of a business. They are also responsible for
hiring high quality employees who will help contribute to the company. Similar to hiring power,
they also have the power to fire any employees they feel are not doing their job within the
business. They are responsible for managing the company’s money and capital, future
12
investments, marketing and promotion plans, and what the profit from the business will be used
on.
Program Director (1): The program Director will create unique and fun lesson plans every
week in order to provide new experiences for the children and to offer a wide variety of
activities. They are in charge of all the specifics of the classes on a specific day, and must write
down what will be taught and done in each class. They will come in for five hours every week to
talk with owners, and to train coaches on the lesson plan for that week.
Owners Assistant/Front Desk Help (2): The main role of this position is to help assist owners
and deal with children’s parents directly. This person is in charge of enrolling gymnasts in the
classes that are proper and fitting for them. This person is here to answer any questions or
comments parents and children have, and also respond to complaints. They will also collect the
tuition from the parents of the children, keep track of the calendar and other important
documents, and file away important information. This person will coordinate with the coaches if
any changes in a particular class occur.
Coaches (4): The key role in running a successful gym is providing good quality gymnastics
coaching. These individuals must be good with children and have a passion for teaching. They
must have prior gymnastics experience of some kind, and focus heavily on the happiness and
ability of each child while heavily focusing on the safety and well being of the child. Safety
comes first, so all coaches are required to be First Aid/CPR certified before being hired. Each
coach will push each child to work hard and become the best gymnast, and the best person they
can be. The ideal coach could be as young as a junior in high school and as old and/or
experienced as coaches come.
13
Cleaners (2): A clean gym is one of the most important qualities in running a successful
gymnastics business. Parents will feel more comfortable leaving their child in a clean facility,
and children will be more at home in a bright, shiny area. A well kept up gym also adds to the
general positive appearance and ambience of the business. In gyms, sanitary equipment is
essential in order to prevent the spread of disease and sickness. The responsibilities of this
position are to clean and sanitize all gymnastics equipment twice a week, sweep and clean floors
bathrooms, tidy up gym equipment, and take out trash.
Van Driver (1): Van drivers will be in charge and responsible for the transport of children from
their schools to the gym every weekday between 2pm and 3pm, and to make sure they arrive at
the gym safe and sound. All van drivers must know their way around Sammamish and
neighboring towns. To ensure the safety of our client’s children, all van drivers must pass a
background check, a drug test, a driving safety test, and must have graduated from high school.
They must be prompt and on time to all school pickups, and must be highly recommended and
responsible. They must love kids as well.
Featured below is a table highlighting how much each position will be paid per hour and
per year and the taxes that will be put in place on these salaries:
Position
Owners
Front Desk/
Owners Assistant
Program Director
Coaches
Cleaner
Van Driver
Totals
Annual Salary Expenses Table
Monthly Payroll
Rate Per hour
Hours Per month
Expense
N/A
N/A
$4,000
$10
$12
$10
$9
$10
N/A
144
20
144
16
20
N/A
14
$1440
$240
$1440
$144
$200
$7,464
Annual Payroll
Expense
$48,000
$17,280
$2,880
$17,280
$1,728
$2,400
$89,568
Payroll Taxes and Benefits Table
Cumulative
Payroll Tax
Rate12
Position
Owner
Front Desk/ Owner’s Assistant
Program Director
Coaches
Cleaner
Van Driver
Salary
9%
9%
9%
9%
9%
9%
Totals
$48,000
$17,280
$2,880
$17,280
$1,728
$2,400
Total
Salary
Burden
$4,320
$1,555
$259
$1,555
$156
$216
$8,061
This will factor into our payroll expense which is one of the larger expenses in any
business, but the gains from our well trained and top quality employees will be worth the
expense and will lead to further profit. If employees are paid and treated well, they will work
harder and perform better.
B.
Proposed product/service
Tumbling Tots will be open Monday-Friday from 2pm-8pm, open Sunday from 8am to
2pm, and closed Sundays. Our goal is to offer classes and lessons that are convenient for a parent
to get their children to without having to take time away from work or other responsibilities. We
also aim to provide interesting, but also educational classes that will please both the children and
parents of the children. We will offer summer camps in the summer, after school gymnastics
classes, and Saturday recreational gymnastics lessons. Also, we will rent out our facility for the
use of special events like birthday parties. All of our classes will be broken up into different age
groups and experience levels, but here are the general descriptions of the services, and the prices
that they will be offered at:
The Cumulative Payroll Tax Rate includes the employer’s portion of Social Security (6.2%, limit $97,500),
Medicare (1.45%, no limit), and State Unemployment (.2%), plus an estimate for Federal Unemployment (.8%, limit
7,000) and Workman’s Compensation.
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15
Proposed Services Table
Service
After School
Gymnastics
Classes
After School
Gym Class w/
Transportation
Recreational
Gymnastics
Lessons
Special Event
Rentals
Summer Camp
Description
These classes will be our main service offered. Children will
partake in classes depending on their age and experience level.
They will be taught the basics of gymnastics through hands on
learning and great coaching. Each lesson plan is specifically
planned out and shaped by the children’s needs, wants, and age.
Education and the development of critical motor skills will also
be incorporated into the lesson plans through dances, songs, and
various exercises. Children will be able to run around on padded
floors and walls, try out the balance beam, play on rings and
bars, and jump into a foam pit. A healthy snack will also be
provided. Our package includes three classes per week.
Same as described above, but for an extra fee with the added
benefit of transportation in our bus driven by a safe and trusted
employee. Children are picked up from school and dropped off
at the gym until the parents are free to come and pick them up
when their class is done.
These lessons are offered once a week for children wanting to
take more in depth gymnastics lessons through private lessons,
or smaller group lessons. Same activities as in the After School
Class, but more focused on building the foundations of a
competitive gymnast. Faster paced learning environment.
The facility will be rented out to private parties and special
events for things like birthday parties, or other celebrations, and
to teams or large groups who want the gym to themselves.
During the summer, weekly summer camps will be offered for
children of all ages. They will be dropped off by their parents at
8am and be picked up around 4pm at the end of the day. A
lunch, snacks, and drinks will be provided or the child can bring
their own lunch. Gymnastics and having fun will be the main
focus of the camp, but arts and crafts activities and other fun
games will also be incorporated. At the end of the week the
children will out on a mock “gymnastics meet” to show their
parents what they have learned.
Days and
Times Offered
Price
Monday-Friday
2pm-8pm
$200 per.
month
(3 classes
a week)
Monday-Friday
2pm-8pm
Saturdays
8am-2pm
$270 per.
month
$20 per. 1
hour
lesson
Saturdays
2pm-11pm
and
Monday-Friday
8pm-10pm
July and August
Monday-Friday
8pm-4pm
$50 per.
hour
$400 Per.
Week
C. Proposed marketing strategies
Tumbling Tots will use a marketing strategy focused heavily on promotion and
community awareness. We believe that if our business builds a good relationship with the
surrounding community, people will begin to trust our company and its employees; bringing in
more customers. We have created a calendar by month of promotions with the goal in mind that
we will gain attention from the public by hosting/ being a part of annual events. We want to
16
extend a hand to the public and grab their attention through exciting and entertaining events.
Below is a chart showing the promotion events we will be putting together:
Yearly Promotion Plan
Month
Promotion
Direct
Cost
Month
Promotion
Direct
Cost
January
February
March
April
May
June
New Year’s
Party
N/A
N/A
Easter
Egg Hunt
N/A
N/A
$600
$0
$0
July
August
September
4th of July
BBQ
N/A
N/A
$500
$0
$0
$200
October
Salmon
Days
Booth
$800
$0
$0
November
December
N/A
Holiday
Party
$0
$500
Although these promotional events will cost us money with no direct income in result,
they will get the word out about Tumbling Tots and provide us with more profit later. Here are
brief descriptions of what will take place at these events:
New Year’s Party:
On New Year’s Day, we want to have a party for all the public at our gym. At this holiday party,
there will be food and drinks for all the people who attend. Not only will there be food and
drinks to go around, but the gym will also be open for people to walk around and admire the
facility. Our goal is to have these 75 people tell their friends and family about Tumbling Tots.
This event will be free for anyone who wishes to come. The estimated cost of this party is about
600 dollars.
Easter Egg Hunt:
On Easter Sunday, Tumbling Tots will host an Easter egg hunt for the younger kids. At this
Easter egg hunt, we will be showing our dedication towards the youth of the Eastside region. We
will provide eggs filled with candy and hide them in and among the gymnastics equipment for
17
the children to find. This will bring in children and parents who may not attend Tumbling Tots
regularly to the gym and will likely bring more children to our program
4th Of July BBQ:
On the afternoon of the 4th of July, Tumbling Tots plans to host a patriotic themed BBQ at the
gymnastics facility. We will provide the food drinks and location of this event, which will be at
the gym. The goal of this event is to acquire new clients by opening this event up to the public to
attend. The main cost of this event is the food and drinks provided along with the cost of the staff
working this special event, totaling at 500 dollars.
Salmon Days Booth:
Salmon Days is an event in which many families of the Eastside gather on one weekend each
year in October to have fun, shop and be entertained. Tumbling Tots plans to set up a booth
where there will be give- away items available for children and information on our program for
the parents. The main goal of this event is to advertise to the families of the Eastside. There are
thousands of people who live near Sammamish who attend this special event each year. The
Booth will be set up on both Saturday and Sunday of the Salmon Days weekend. The main costs
of this promotion would be the employee running the booth, the booth itself, and the items we
give away to the children.
Holiday Party:
Tumbling Tots will host a party at the gym each holiday season. Not only will food and drinks be
provided, but also the gym will be open to the public to explore. We hope to gain clients through
hosting this event each year. This would be a great opportunity for children to show their parents
what they have learned up close along with bringing new children to gymnastics. The rough cost
of this operation is about 500 dollars.
18
Tumbling Tots also plans to use other various methods of advertising other than the
events hosted, as described above. We want to use other resources to convey our mission and the
availability of our outstanding service towards the community. These methods are not extremely
personal so they will advertise our program or upcoming public events as listed above. They will
also offer coupons, special deals, and discounts off of monthly tuition and classes. In the chart
below, the prices and usage amount of the specific type of marketing is shown. These are some
different techniques we will use to advertise our business.
Yearly Advertising Plan/Expenses
Marketing Tool
Newspapers
Brochures & Fliers
Telephone Directories
Yearly Promotion Plan
Price Per use Uses Per Year
Total Yearly Cost
$400
12
$4,800
$75
52
$3,900
$500
2
$1,000
$2,600
1
Total
$2,600
$12,300
Tumbling Tots plans to use a wide variety of advertisements to let people know of our
location in Sammamish, Washington. We plan to use Newspapers as a place to put ads. Our goal
is to target local families so we will mainly advertise in the local newspapers such as The
Sammamish Review and The Issaquah Press; two widely read newspapers near the location of
our Tumbling Tots. These newspaper ads will be placed in these local newspapers every month.
We will also advertise via brochures and fliers, which will contain ongoing news and
information about our gym. We plan to put out brochures each month into the local community,
and to post fliers on the bulletin boards of local shops. Twice a year we will place an
advertisement in the local telephone directory. Our last and most important form of advertising
will be the Promotion plan which is spelled out in detail above. All of our marketing strategies
19
will focus on highlighting the uniqueness of Tumbling Tots and what we have to offer to the
community of Sammamish, and also our low prices in comparison to competitors. Through this
well thought out advertising plan, we hope to gain more customers in the local Eastside region.
V. PLANNED FINANCING
A. Projected income and expenses
The revenue and sales outlined in the below statements come from the Revenue \ Model
(See Appendix C). As a service related business, there is no cost of goods sold associated with
our revenue. In the following financial statements, the Fixed Asset and Depreciation schedule
(see Appendix D), has helped us generate the start-up costs and depreciation expenses of our
business. Also, the statements below will be used on a monthly basis to measure and compare
actual results, with forecasted results, so we can adjust our actions accordingly.
20
1.
Projected three-year cash flow
21
2.
Projected three-year profit/loss statement
22
3.
A brief narrative description of the planned growth of the proposed
business, including financial resources and needs
After Tumbling Tots has finished its first year of operation, enough credibility within the
area, market awareness, and traction will have been acquired so that sales will amplify
significantly in the second year. In the third year of running and operation Tumbling Tot’s sales
will be expected to yet again increase due to the growing interest from the community and from
our expanding reputation as a top of the line business. Also, in 2011 and 2012 there will be a 3%
forecasted inflation rate on the total expenses for our company.
If Tumbling Tots is to have a positive cash flow number during its first three years of
operation, and in order to establish a successful and thriving business, sufficient capital is a must.
Our sources will be a loan from the bank, and also personal funds from the owners that will be
invested in to the business. These funds are clarified more in depth in the following section.
B.
Proposed plan to meet capital needs
1.
Personal and internal/external sources of financing
As the two owners of Tumbling Tots, both Emily and Chris will invest $25,000 each
from our savings into the start up of the business. This will total at $50,000 of cash invested from
our personal funds. We are also asking for a $70,000 loan from the bank, which will cover all of
the basic start up expenses for the company and also make sure that a positive net cash flow is
retained through the first few years of the business. This will also provide us with sufficient
working capital to use in the basic operations of Tumbling Tots. If more cash is needed, we as
owners will be willing to forgo both of our salaries for the benefit of the company until traction
is gained.
23
2.
Plan to repay borrowed funds or provide return in investment to equity
funds
We are requesting a $70,000 loan from the bank with an annual interest rate of 8%,
which will be paid back completely over a period of 5 years. Displayed below in detail is the
amortization schedule for this requested loan. This table lays out how much principle and
interest will be paid annually until the loan has been repaid.
Loan Amount
Interest Rate
Term
Start Date
$ 70,000
8%
5 years
Jan 2010
Summary of Payments & Interest
Monthly Payment will be
$ 1419.35
Total Interest Paid over Life of Loan $ 15,160.86
Year
Begin
2010
Interest Paid in 2010
$5171.38
Interest Paid in 2011
$4186.91
Interest Paid in 2012
$3,120.76
Interest Paid in 2013
$1,966.14
Interest Paid on 2014
$715.66
Payment Schedule for Tumbling Tots
Principal Paid
Interest Paid
Loan Balance
$0
$0
$70,000
$58,139.19
$5171.38
$11,860.8
2011
$12,845.26
$4186.91
$45,293.94
2012
2013
2014
Totals
$13,911.42
$15,066.04
$16,316.51
$70,000
$3,120.76
$1,966.14
$715.66
$15160.86
$31,382.55
$16,316.51
$15,160.86
$0
VI. CONCLUSION
Both of us are confident in stating that Tumbling Tots will be a significant success.
Parents will love the unique services that we will provide for their young children. They will see
their child grow in their sense of life skills and physical ability. Each child will love to receive
24
their own individual attention as they begin to learn the basics of gymnastics. I strongly believe
that Tumbling Tots will thrive for the following reasons:

This is a service based so it will avoid any problems with inventory

We will go out of our way to meet the specific needs of every child enrolled in our
program

Demographics also show that there is a significant proportion of the local population that
are right in the age range of kids whom we would provide gymnastics lessons to

Our program is unlike local gymnastics companies in some of its unique services such as
transportation to the gymnastics center from the child’s school, after school programs,
and personalized attention.

Our location is key. No businesses like Tumbling Tots exist in Sammamish, so people
living there and in surrounding areas will take advantage of our close proximity.
As displayed above, there are many reasons for this business to be successful. There is room for
success and even growth in this start-up-business. This business cannot be successful unless one
key element of a loan is provided. We are asking for a $70,000 loan from you, the bank. We as
the owners are investing $25,000 of our own funds to support this business that we feel has the
huge potential to become flourishing and profitable.
I feel that we have displayed enough concrete evidence to prove to you the potential of
Tumbling Tots. Please feel free to contact either one of us, Emily or Chris, if you have any
questions, comments and concerns. We would appreciate your feedback. I hope you are as
excited as we are to watch this business be created, establish itself, and live up to its full potential
in the business world.
25
VII. BIBLIOGRAPHY
"Business Partnerships Advantages and Disadvantages." Residual-Rewards. Web. 29 Nov 2009.
<http://www.residual-rewards.com/business-partnerships.html>.
Google Maps. Google, Web. 29 Nov 2009. <http://maps.google.com/>.
Gymnastics East USA. Web. 29 Nov 2009. <http://www.gymnasticseast.com/>.
"Sammamish City, Washington Statistics and Demographics." Area Connect. Web. 29 Nov
2009. <http://sammamish.areaconnect.com/statistics.htm>.
"Sammamish Community Info." Trulia. Web. 29 Nov 2009.
<http://www.trulia.com/real_estate/Sammamish-Washington/community-info/>.
The Little Gym. Web. 29 Nov 2009. <http://www.thelittlegym.com/Pages/default.aspx>.
"Washington State Districts." School Digger. Web. 29 Nov 2009.
<http://www.schooldigger.com/go/WA/districtrank.aspx>.
"10 Steps to Starting a Business." Business.gov. Web. 29 Nov 2009.
<http://www.business.gov/start/start-a-business.html>
VIII. APPENDIX
Appendix B: SWOT Analysis
A SWOT Analysis is a simple, yet extremely useful decision-making tool. SWOT is an
acronym for Strengthens, Weaknesses, Opportunities and Threats. I can be used to assess the
current and future situation of a product, brand, company, proposal, or decision. This analysis
takes into account both internal factors (Strengths and Weaknesses) along with External factors
(Opportunities and Threats) that are relevant to the situation being assessed.13
Strengths








13
Have Customer lists
Provide quality and reliable service
Experienced coaching staff
Can serve from existing building
Strong management and ownership
Unique business
Owners with experience in gymnastics
Owners have passion for the services
Weaknesses








Business and Management- by Paul Hoang
26
Limited budget and working capital
No direct marketing experience
No pilot or trial done yet
Do not have a detailed plan yet
Slightly higher prices
Staff need training
Processes and systems are new
Reliability of data










offered
High value for your money
Convenient and suitable location
Opportunities
Gymnastics is a year round sport
Could seek good supplier deals
Can surprise competitors
Could expand and grow
Local competitors are not as successful.
Could develop new techniques
High income level in surrounding areas, so
people are more willing to pay for extra
activities
Many people in the area falling within the
target market

Plan Predictability








Threats
Injury liabilities
Government interference
Retention of key staff critical
Market demand
Loss of key staff
Lack of business experience
Unforeseen obstacles (external factors)
Economic recession
This Analysis shows that the pros outweigh the cons in starting up this business. There
are many things that support this business in doing well. There are many factors both positive
and negative considered in this SWOT analysis. We as the owners do recognize some factors
(external influences), that we have no control over and that may affect our business in both
positive and negative ways.
Appendix C: Revenue Model
In our forecasted financial statements for Tumbling Tots, we have used the “likely”
number of people taking advantage of our services because as the owners, we believe that
Tumbling Tots will most likely service this amount of people. However, it is important for our
business to take into account important changes in the business situation; so we have also
included conservative and aggressive approaches as well.
27
Appendix D: Start Up Fixed Asset and Depreciation Model
Shown below is a table modeling out the basic fix assets that need to be purchased in
order to start up and run Tumbling Tots effectively. Also displayed, is how much each asset will
depreciate annually, which will be at the expense of our business.
28
Appendix E: Pestle Analysis
Shown below is a pestle analysis, which evaluates the external macro environment in
which our business will operate. This analysis shows the factors that our beyond the control or
influence of our business, but are important to recognize.
Influences
Specific Factors

Stable local
government
Advantages


Political

Rapid Growth
(in both
business and
community)


Strategy
Response
Disadvantages
Predictable
government
moves
Low risk

High potential
revenue
Room for
growth

May not be as
open to change



Economic
Possibility of
new
competitors
May not be able
to keep up with
growth




Social

Increasing
Cultural
diversity

New
viewpoints
Global
perspective

Rapidly
changing
technology




Faster
Less expensive
Easier to use
Better
communication



Free market
Can operate as
wanted
Governed by
ethics



Misunderstood
culture
Possible
language
barrier
Difficult to
keep up with
new
technology/
software

No
repercussions
for
misbehaving
competitors



Technological

Legal
Few business
regulations

29

Compete
within local
government
restrictions
Connect with
local
government
agencies
Adapt to
current
economy
Vigorously
compete with
other
businesses
Invest in
current
economy
Target and
research local
diversity and
culture
Keep up with
new
technology
Use the
internet
(website) to
attract
potential
customers/
convey
information
to current
customers
Know and
abide by all
regulations
and laws
Compete

Environmental
Strong,
influential and
growing
community
support

Support for
local
businesses

Will also help
out customers


ethically
Get to know
customers
Network with
the
community
Obviously, the Political, Economic, Social, Technological, Legal, and Environmental
factors that have the potential to affect our business will provide advantages that outweigh the
disadvantages. For all these factors a specific strategy response will be put into action, allowing
us to react to both the positive and negative effects of these factors.
30