A Business Plan for the Green Eco Gym
Mike Wieczorek
December 2008
Saskatoon, SK
Table of Contents
1.0
Executive summary
1
2.0
Introduction to the Green Eco Gym
2
3.0
The Marketing Plan
3
4.0
The Operations Plan
10
5.0
The Human Resources Plan
16
6.0
The Financial Plan & Recommendations
18
Appendices
Appendix 1 – SWOT Analysis for Venus Fitness Center
22
Appendix 2 – Marketing Research Survey
23
Appendix 3 – Location Map and Picture in Saskatoon, Saskatchewan
24
Appendix 4 – Organizational Structure
26
Appendix 5 – Venus Fitness Center Floor plan
27
Appendix 6 – Weekly Schedule for Multi-Purpose Room
28
Appendix 7 – Venus Fitness Center Staffing Diagrams
Appendix 7.1 - Adjustments to Operations to Increase Return
Appendices 8 – 11
Financial Model
Clean up the Table of contents
List of Tables
List of Figures
29
30
1.0 Executive Summary
This plan’s purpose it to present to you a creative twist on something that has been around for
ages but has not really evolved much. It is a combination of 2 industries that have been
experiencing steady growth over the past 10 years and will continue to experience growth
according to all estimates.
So what do we get when we combine environmental concerns with the fitness industry?
The Green Eco Gym! Think of it as the smart car of the gym industry. Just like there has been a
shift from SUVs and trucks to small efficient cars in the automotive industry, I feel there will be
a shift in the gym industry.
The Green Eco Gym gets rid of all the costly amenities that have become a cliché in gyms such as
massive change rooms, showers, lights always on. If you really think about it, a big box club is
extremely inefficient in its space and energy usage.
People will prefer to use this type of gym because of its quick in/out layout, low prices of $50 per
month and no contracts as well as feeling good about supporting the environment.
The gym will be based on a 1,800 sq. ft floor plan instead of a typical big box club size of up to
32,000 sq. ft. It will be open 24/7, feature a high tech security and video surveillance system as
well as the latest fitness equipment.
The club will also feature a $15,000 custom made generator powered by the motion of its
members that will generate approximately 5% of the gym’s energy needs. This is a very important
part of the business idea and it gets only one sentence? The first gym to create power from its
members like this in the States opened in Portland last year and received nation wide media
coverage at no cost for several months. This is important to note because this means that the club
will sell itself and we will not need to spend very much money on advertising. Pretty big
assumption – have you asked Saskatoon media or any other media whether they will be providing
you with free advertizing?
The Club will be located at a very high traffic location on 8th Street right beside the existing
California Fitness gym. Our location will allow us to steal many customers from this successful
chain as soon as they find out they can work out in a gym with newer equipment, lower monthly
rates and a vision for being sustainable and responsible to the environment.
The start-up cost for this venture is low at $140,000 and as such this would be an ideal
investment for one or two retired couples.
A key differentiating factor of this gym compared to others is that it can be open 24/7 because of
its high tech security and video surveillance system that keeps users safe yet allows the gym to be
accessible without employee/owner supervision.
One of the greatest things about this gym concept is that overhead is kept very low which allows
for a year 1 Break even to be only 87 members. And For the next 4 years, the gym must have 98
members to break even.
It seems quite feasible to think that Saskatoonians will soon be able to experience “the fastest,
greenest and most affordable way to stay fit and healthy!
2.0 Introduction to the Green Eco Gym
Background on Business Concept
To better understand the concept of the Green Eco Gym we must look south of the border where
we took notice of a franchise making waves with its explosive growth. Snap Fitness has been in
the top 10 franchises rankings for the past 5 years. Its’ revolutionary leader is Peter Taunton.
Here is what Peter has to say about the small club concept:
“I managed “big box” clubs for 20 years. Though successful, I questioned the work and
capital needed to turn a profit. So, through analysis, trial and error, I down-sized,
stripping costly amenities and keeping only the bare essentials that fit in low-rent, wellsituated malls. I cut labor by using a high-security, key-card system to let members come
and go in a safe environment.
And I emphasized good value at a low price. My first test in rural Minnesota yielded 180
members in 30 days. From my point of view that was good enough financially. Pilots in
larger markets got similar results. I realized I had a tiger by the tail – and a business
model you can use to pursue your dreams.” Is this part of the promotion used to get people
to buy a franchise?
The Small Club Concept is the hot thing right now. The fitness industry’s fastest growing segment
is 24/7 express centers just like Snap Fitness and our soon to be Green Eco Gym.
There are several factors in this sectors recent explosive growth. Patrons love the flat monthly
fees with no contracts. All of the new small clubs also feature state of the art machinery as good
as the large clubs or even better.
Most existing gyms offer a sharp discount for members to sign a 1-3 year contract. The discount is
so large that people choose the contract option for savings but then later realize that if they are
not satisfied with the gym or find a better alternative, they cannot switch because they are locked
in. Gyms need these long term contracts because of the capital intensity of their facilities.
Most modern gyms are 5-10 times the size of our smaller, smarter Eco Gym and as such have
exponentially higher overhead costs. In addition to the size difference, ordinary gyms require
extensive organization structures and management to manage all their gym staff.
But no matter how nice the small club concept is to potential members, it could not be enjoying
the explosive growth it is at the moment, if it was not a lucrative proposition to potential club
owners and investors. With low overhead and a manageable investment cost, it is no wonder that
a franchise company such as Snap has sold over 1,500 franchises in the United States and Canada
in less than 5 years.
However, the small club concept brought into the spotlight by Snap Fitness is only half of the
inspiration for the Green Eco Gym.
The other comes from the Green Microgym in Portland, USA. When I started my online searches
for green gym information, this was the gym that came up most often.
Adam Boesel, owner of this gym, saw a television report about a Hong Kong gym with humanpowered equipment and set out to create an eco-friendly fitness center in his hometown. Mr.
Boesel’s Green Microgym opened in late August 2008 and has already registered more than 100
members.
He generates power through generators attached to his stationary bicycles, uses environmentally
friendly flooring and solar panels to generate about 40% of his gym’s energy.
The company gym will be able to start up approximately 1-2 months after signing the lease for
our property to allow for installations and modifications.
Vision:
Promoting a green and eco-friendly way for Saskatoonians to
Work out and stay healthy
Mission:
To facilitate health in an environmentally friendly way for life
Core Values:
o Helping all members achieve their fitness goals
o Helping all members become more environmentally friendly in other aspects of their lives
???? How?
o Sustainable development/growth in the future
o Supporting & encouraging environment
Objectives:
The Green Eco Gym will strive to complete the following short-term and long-term strategic
objectives:
1. Short-term Objective No. 1: To have a 99% satisfaction rate for the clientele of The Green
Eco Gym.
 As measured through a short monthly survey collected by the owners as patrons
come in to work out. If a member is not 100% satisfied they will be offered their
next month free and will be asked what can be done to improve their satisfaction.
If we cannot, improve their satisfaction in one month, we will suggest another
club that might fulfill their needs better because we only want satisfied clients
even if that means having less clients at some points.
2. Short-term Objective No. 2: To create win/win partnerships with other green businesses in
Saskatoon to help promote and raise awareness of our businesses.
 The Green Eco Gym will develop special promotions and partnerships with green
and sustainable businesses such as Dad’s organic market.
3. Long-term Objective No. 1: To break even every year or better.
 Very conservatively, my main goal for this business is to raise awareness for the
environment and what ordinary people can do to be more green and
environmentally friendly. If we can sustain this gym at a breakeven or better, it
will be an extremely positive addition to the city.
Who does all of this? Your wages and benefits are zero. To properly test feasibility every
opportunity cost must be accounted for.
3.0 Operations Plan
The green eco gym will strive to be a revolutionary gym chain that will go the extra mile to make
sure that every single product/machine/process is done in a way that is extremely environmentally
efficient. It will be a very simple in/out gym without large change rooms, showers or tanning
beds. Only cardio machines, weight machines and free weights will be present.
The reason for this is simple. Change rooms are often unoccupied yet the lights are always on. We
will provide several personal change rooms and then people can quickly leave the gym and
shower at home. Showers are a huge space and energy drain on gyms as well. Tanning beds are
another notorious energy user. We will let other companies who specialize in tanning take care of
this.
The gym will look to capture a small membership base quickly by pricing its membership at
similar levels to its non energy efficient competitors, yet we will not require a contract. Even
though the monthly fees will be the similar, the gym should enjoy much larger profit margins
than other gyms because of its low overhead costs and inexistent labor costs. Energy costs, one of
the largest expenses for a typical gym, will be zero as they will be generated by green renewable
methods.
All cardio equipment models that require electricity to run will be the most efficient in their
class offering substantial energy savings to the outdated models some other gyms still use.
All mats/pads/training balls will be made of biodegradable materials. All sprays and cleaning
materials will be all natural and safer than chemical sprays.
3.1 Organizational Structure
This gym will be run by the owner or owners. I suggested previously that it could be a perfect
investment for one or two retired couples because running this gym is only a part time job at
most.
The organizational structure will be extremely lean and efficient to minimize overhead costs. As
many processes as possible will be outsourced to other outside companies such as
accounting/payroll etc. Where are these costs in the financial model?
The organization will incorporate to enjoy the advantages this method offers.
Instead of a board of directors, the company would exclusively use paid consultants to direct the
company. Again this will minimize overhead costs as we will only have to pay them when we
need their advice. Since we have no loyalties, we can choose to see the best in each field we need
advice in. Where are these costs? How much will they cost?
The owner (s) would be the person who invests in this concept. He/she would be in charge of
running maintenance and marketing. No payments to owners – your IRR isn’t going to mean
anything.
3.2 Site Plan and 5 Year Development Plan
What is the source of this diagram? You need to add references for all materials included that
are not your original work.
Ways the Gym will be Green:
o
o
o
o
Our SportsArt EcoPowr Treadmills use 30% less electricity than others
Our solar panels generate an average of 8 Kilowatt Hours per day
The Team Dynamo and Spin Bikes can collectively generate up to 350 watts continuous
We are working with ReRev.com on ways to capture the excess energy from our elliptical
trainers
o We have recycled rubber, marmoleum, and eco-friendly cork flooring
o Our ceiling fans are EnergyStar rated
o All of our lights are compact fluorescents
o Our televisions are LCD TV's which use less electricity than plasmas
o Our lights, televisions, and ceiling fans are member controlled, so they will only be on
when needed.
o We have double flush toilets
o We use non-toxic soaps and cleaning supplies
o The paper towels and toilet seat covers in the bathrooms are made from recycled content
o Our personal trainers often take their clients outside for workouts
o We have automated our payment and billing systems to reduce paper usage
o We will do our marketing mainly to surrounding homes and areas in the hope of
encouraging patrons to walk/bike/run/carpool to the gym to reduce gas use.
3.6 Describe Average Business Day, Week, Month, Year
The gym will be open 24 hours per day so that people can use the gym whenever they have time.
Most of the time the owner (s) won’t be at the gym. Who cleans up? There is a high security card
system to gain access to the gym as well as high definition video monitoring.
Every week, he will look at gym attendance numbers using all information such as hours
accessed/demographics etc. We will track all advertisement and marketing currently being done
and analyzing results.
Every month, we will look at overall locations and our monthly financial results to see what kind
of shape we are in.
Every year, we will file for taxes and set our new financial and membership goals for the
upcoming year.
3.7 Supply Analysis
There are several important supply partners.
First off, we will need a good fitness equipment supplier such as Flaman fitness to buy our
equipment from and service broken machines to ensure our equipment is always in good
condition and up for customer use.
We need good relations with our marketing partners such as newspapers/websites/advertising
agencies.
The best part of our plan is that since all of our energy will be produced by us we can reduce our
supply risks for energy such as electricity and gas. Since these inputs have been on a steady rise
over the years, our investments in self sufficient energy systems are not only energy efficient and
money savers but also risk reducers.
3.8 Service Providers
We will rely on the services of our product distributor such as Flaman fitness to service and
maintain equipment. By giving them exclusive rights to do this, we can develop long term
business relationships that will give us better prices and deals than going to several different
providers. Your total rep & maint budget is $2400 – you think this is reasonable? Why?
Our payroll will be non-existant, so we can do our books on our own and save money by using a
software system such as quickbooks.
Our taxes and accounting will be done by a reputable accounting firm such as Northrup and
Associates.
All advice will be sourced out to paid consultants who are in the top ranks of their specialties.
What kind of advice are you referring to? Consultants cannot run your business for you.
3.9 Technical Processes and Procedures
The gym business is in essence a very simple business operation. You need a building to house
your exercise equipment. However in our company, we will utilize several processes and products
that are known to other industries and applications but uncommon in the gym industry.
In our feasibility studies earlier in our research, we originally wanted to build one of, if not the
greenest gyms in the world. We wanted to build a LEED-platinum certified building somewhere
on the east side of the city. We wanted to spare no costs in our perfect building using thermal
glass, solar panels on the roof and geothermal rods heating and cooling the gym.
But the more we started looking at the costs associated with this, the more we thought we needed
a different way to do things.
A LEED building would have cost in the 1-2 million dollar range in addition to up to 500,000
for the lot. The building boom in Saskatoon has also created shortages of good locations to build
on.
When we started doing membership numbers on this type of building, we discovered that to
support those kinds of financing and investment costs, we would have to go big or go home.
And building another huge mega-gym like world’s gym is not our objective. So our alternative
was to downsize our gym and start from scratch. After reading about Snap Fitness, we decided on
a 1800-2400 sq. ft size and started looking at locations we could lease in this size range on the east
side. We found a good priced property right on 8th Street, right beside one of our competitors
which would be ideal to create awareness to people who already possess gym memberships and
might be willing to try our revolutionary gym. Your lease cost is less than $7/sq foot?
o Geothermal energy is energy that is generated by converting hot water or steam from deep
beneath the Earth’s surface into electricity. Our building would utilize this energy to cool
our building in the summer and heat it during the winter. Your capital budget does not
include enough to install this.
o LEED design: Leadership in Energy and Environmental Design. This is the standard
that we would pursue for our building to ensure our building is as environmentally
efficient as possible in all ways What does this mean – what would you do? Again, you
don’t show any capital costs related to this.
3.10 Capacity Limits and Capital Budget
We are limited to how many people can access the gym at the same time because of space and
machine limitations.
If we have approximately 9 cardio machines, 12 fitness machines, 2 racks of free weights along
with the exercise room, we can handle a maximum of about 35 users at any given time. If we can
turn over once per hour times 12 hours busy time, we can come up with an approximate gym
membership capacity of 420 members.
It will be important to encourage users to use the gym at non peak hours to prevent lineups for
equipment. Failure to do so will be a loss of clientele because nobody likes waiting in line at the
gym.
Cash Management
Our gym's cash cycle will be very short which is a great thing. We collect our monthly dues at the
beginning of the month and then people use the gym for the whole month. We can choose to pay
our bills at the end of the month using all our cash that we collected a full 30 days before.
We will have zero accounts receivables because if someone doesn't pay their membership dues,
they are not allowed to access the gym.
4.0 Marketing Plan
Opportunity is the one word that can explain both Saskatoon's growth in 2007 and the outlook
for 2008.
The Saskatoon region has consistently ranked among the top five growing regions in Canada over
the past five years, and 2007 was no exception. Outpacing all other regions in Canada, Saskatoon
experienced annual growth of 4.7 per cent in gross domestic product (GDP). Major growth sectors
included mining; oil and gas; construction; wholesale and retail trades; finance, insurance and
real estate; and agriculture.
Projected growth for 2008 is directly related to the labour market. The increasing need for
workers will have a direct effect on whether companies are able to expand and output can
increase. It is expected that the unemployment rate will be 4.1 per cent in 2008, which will keep
the labour market at an almost 'fully employed' level. Demand for skilled trades people and
competition for existing workers will be the biggest challenge faced by Saskatoon region
employers.
Operating a business in the flourishing city of Saskatoon has never looked more promising. “The
Conference Board of Canada’s outlook pegged Saskatoon’s real domestic product growth at 4.9 per
cent, surpassing the country’s previous top performer, Calgary”. Alan Migneault, chief executive
officer of the Saskatoon Regional Economic Development Authority Inc. (SREDA) has stated
“We believe that Saskatoon’s economy will continue to grow and exceed expectations on a
national level.” Ref? In addition to the phenomenal growth expected in Saskatoon, the
advantages of running a business in Saskatoon have been acknowledged on an international level.
“Saskatoon has been ranked most competitive among western Canadian locations in the 2008
edition of the Competitive Alternatives: KPMG’s Guide to International Business Locations.
Ref? The Competitive Alternatives study looks at both cost and non-cost factors that would be
considered when choosing a location to do business”.
Marketing Research
The fitness industry is valued at $1.6 Billion in Canada alone with 4,700 members and 4.3
Million members. It has a continued history of success, with 8% compound annual growth since
1993 with positive trends in place such as the aging boomers and a more health-conscious society.
There are twice as many members today (14% of population) as in 1987.
Canadians are becoming more conscious about their impact on the environment. In our recent
election, about 11% of Canadian cited the environment as their #1 concern.
The Right Industry: Fitness Is In
Canadian Market Statistics
o Total Industry Revenue
(USD):
o $1,600,000,000
o Total Number of Clubs:
o 4,700
o Total Number of Members:
o 4,300,000
o Members as Percent of
Population:
o 14.6 %
If we want to look at another country’s statistics, we can look at the UK numbers:
The UK’s £3.6 billion fitness industry is in the best shape of its 20 year history with more
members than ever before. This is the conclusion of the 2007 FIA State of the UK Fitness
Industry Report, the only comprehensive audit of the UK fitness industry. The market
intelligence report published on 12 July 2007 covers national overviews of both the public and
private sectors.
National Conclusions – UK Referneces??
o Revenue is estimated at almost £3.6 billion
o 11.9 per cent of the UK population are now registered members of a health and fitness
club or publicly-owned fitness facility
o Like-for-like membership has grown by 3 per cent since 1st January 2006
o Over 230 new public and private fitness facilities have been added to the industry's
portfolio
o Almost 90 per cent of the UK population live within two miles of a private health club or
publicly-owned fitness facility
The Right Concept: Snap Leads the Pack
• Industry’s fastest-growing segment is 24/7 express centers and Snap is the segment’s growth-rate
leader 3
• Well-appointed, brand-consistent, state-of-the-art facilities
• No experience required; our turnkey systems support you
• Flat monthly fees – more fair and less costly than competitors
• The most consumer-friendly pricing and membership policies
Less is more! References?
Another possible boom for the Canadian gym industry could be an upcoming federal Tax Credit.
It has been successful at the kid’s level and there is research to suggest that an investment in it
could actually save the government money in the long run. The reason it would boost gym
memberships is because any investment in a gym membership would become an expense that
lowers your taxable income. Many people would get the membership for the tax savings and then
use it to varying degrees sometimes just because they have it.
“The federal government would save $2.5 billion over the next 21 years by extending the
benefits of the current Children’s Fitness Tax Credit program to adults, Dave Hardy,
President of the Fitness Industry Council of Canada (FIC) said today following the
release of an economic study on the effects of the program. Ref
“The financial incentive offered by a federal adult fitness tax credit will encourage nearly
one million more Canadians to get active and healthier,” said Hardy. “These healthier
Canadians will need less health care and miss less work due to illness.”Ref
In 1997, the total direct cost of obesity in Canada in 1997 was $1.8 billion – or 2.4% of
total health care expenditures. According to the Staff of the Parliamentary Information
and Research Service (PIRS) of the Library of Parliament report, The Obesity Epidemic
in Canada, the growing obesity epidemic in Canada is costing government “$4.3 billion by
most recent estimates. Ref
Considering in 2005, approximately 6.8 million Canadian adults ages 20 to 64 were
overweight, and an additional 4.5 million were obese, the cost of obesity in Canada is
likely to significantly increase over the coming years. Increased physical activity has the
potential to decrease national health care costs while reducing the risk of developing
terminal disease and debilitating conditions including heart disease, colon cancer, type II
diabetes, hypertension and osteoporosis.” Ref
Product
We want to market this green eco gym as something more than a product. We want it to be an
experience and a different way of life for all our patrons.
Some patrons who join our club will join because they are doing all they can to stay green and
support the environment. Others though will be new to the green movement but curious.
If we are to meet our vision and goals, we must be there for our patrons to provide suggestions
and support on how to live a green and environmentally friendly lifestyle in all areas of their
life.
A further concept to be expanded could be that of the gym being a focal community center where
people not only go to work out and stay fit but to socialize about the environment and how they
can minimize their footprint.
This ideology goes with the well know marketing phrase of don’t sell the product, but sell the
dream. We are selling the dream and vision of everyone being more sustainable in their living.
Price
We initially wanted to set our gym monthly membership dues at 30 dollars per month and
market it with the slogan of “a dollar a day”. Everyone can afford a dollar a day and it is very
catchy to market products like this. Several companies such as MDG computers have built a
successful and profitable business on such a simple slogan.
However, as we ran our numbers, we found it very difficult to break even, let alone be profitable.
So then we looked at a flat monthly fee of 50 dollars a month with no contract. This would still
be a very good deal for people comparing gyms because we are offering a green and
environmentally friendly lifestyle at a similar cost to other gyms. This $50 price is about the
median in gym monthly memberships in Saskatoon.
However, we offer this price without a contract and without an activation fee. Almost all the
gyms we inquired to, acquire patrons on a contract basis. So when a customer wants to use the
gym, they must sign a 1 or 2 year contract pledging to pay the monthly fees every month for the
entire term of the contract. This is the same tactic cellphone companies use to predict their
revenues.
The reason gym companies have been doing this for a long time and are required to do so is that
ordinary gyms require an extraordinary upfront investment. To ensure they meet their financing
schedules and to ensure stability, long term contracts are beneficial, even if it means they offer
better rates to clients for the longer the length of time the customers sign off on.
Place
The pace at which Saskatoon's economy grew in 2007 is likely to occur again in 2008, however,
growth will continue to be reliant upon the number of available workers within the region.
Saskatoon's overall GDP growth is forecasted by the Conference Board of Canada to reach three
per cent in its Autumn Metropolitan Outlook, which is well within the 10-year average of growth
for the region. This growth forecast will certainly contribute to a sustainable level of
development for the city region, however, it is expected that Saskatoon will surpass this forecast,
due to the efforts of businesses in the region to properly align with local economic conditions.
Increasing opportunities in the region will continue to draw people to the region; fueling the
economy, driving the construction and service industries, and growing our regional population.
o Competitor Analysis
o 3 large competitors in Saskatoon:
o World Gym
o Mawson Fitness
o California Fitness
o World Gym
o Not 24/7
o Charges vary from $54.99 to $44.99
o Capacity of 6,000 members

Peak hours = 160-200 people at a time
o Drop-in once free
o Size is 32,000 sq. ft.
o Mawson Fitness
o Not 24/7
o Fees from $69.95 - $44.95
o Pass cards
o 2 week free guest pass
o Over 2000 active members
o California Fitness
o Not 24/7
o $39.95 - $59.95
o 1 week free
o $149 activation fee – waived with 2 yr sign up.
o 2 locations in town
Targeting
Mainly target Males 25-54 who have their own work out plans and want to work out quickly,
efficiently and on good equipment.
Populations:
The following are the population amounts of Males in the following age categories in Saskatoon.
 Age 25-44
33,195
 Age 45-54
14,945
Promotions
 Each owner would get vehicle wrap on their car
 $2,800 each
 Partnership with Supplement stores and other organic/green businesses in the city. We would
build a support network and help each other with the overall effect of growing all of our
businesses better than we could on our own.
 3 week free pass on website
 Other gyms offer 1-2 weeks but we would surpass them and offer a limited supply of 3
week memberships for people to try our gym. We will use a common psychology
technique to increase the awareness and interest in our club.
 Before the club opens, there will be a couple good press releases sent and interviews
delivered to local media. Local media loves green business stories because they are
innovative and interesting to read because a green business in better than an ordinary
business. We will mention that anybody can try our gym risk free for 3 weeks by
signing up on our website. It will mention that there is a limited amount of
membership. We will probably limit the number to 50 but there is a very high chance
that there will be more interest than 50.
 So when people over the limit sign up, we will tell them that we are sorry but we
cannot offer them the 3 week pass because interest has been too large for our capacity.
 However, we still value them so much so we will put them on a wait list for the 3 week
pass. Then 3 days later we will inform them that they are still on the waiting list but
they can come work out for one time on us with the special coupon What are the
logistics? There is no one at the gym so how do they get a pass card? Have you
included capital costs for installing a pass system? How would they us ethe coupon to
get in? This needs to be explained here but should really be in the operations section
where it can be costed – did I miss it in the operations? attached to the email. After
many people try it and enjoy the vibe there, they will sign up. It is also easy to push
people into signing up if they show any interest at all because we can always say that
there is no contract like other gyms so you can cancel anytime.
 The psychological technique we are using is that of people want more of what they
can’t have. When you limit supply, you make it seem in more demand and people want
it more. If we have an unlimited supply of free memberships, people won’t value it as
much.
 Another positive from a marketing technique such as this is that it may create a
talking point for people that are not accepted to the 3 week trial. The next day at
lunch, there is a good chance they will tell their coworkers that they are astonished
that they were not able to get the 3 week pass because of too much interest!
 Sign outside our building
 We would have a big bright green sign outside the building that would get thousands
of views from 8th street as well as from the patrons of California fitness right across
the street. Situating ourselves within viewing distance of an existing gym is an
important part of our marketing strategy.
 Members of existing clubs are one of the best potential future clients for our gym.
Because they already subscribe to a gym membership elsewhere, they will probably
want to continue working out and staying healthy.
 However, not all subscribers are happy with their service and gym but they may be
locked in to contracts.
 But when they see our gym signs and read the hype about our gym in the papers and
media, there is a very good chance they will do some research into our gym and
consider it when their contract expires.
 No matter how green a gym is, its’ utmost goal must always be to help its members stay fit and
healthy because a gym is a gym!
 The second most important objective is to achieve this goal at an affordable price. We could
still get hardcore environmentalists at a price of $100 per month but it might only be a
handful. Our goal is to make this environmentally sustainable gym available to people at
various stages of their environmental education and use.
 For example, those people who are already recycling, reusing, eating organic foods will
require little coaching and advice. But they will surely be keen on spreading their knowledge
and advice to the lesser environmentally experienced members.
 Our goal is to also sign up a lot of people who are interested in minimizing their
environmental footprint and being more green in their daily lives but are not sure how to go
about it or are just starting.
 We could have information handy for them as well as a special members only discussion
forum on our website for our members to help each other out.
 Marketing Expenses
 Wraps = $2800
 Outdoor Sign = $950
 Regular Subscription prices
 Simple 50 dollars per month flat rate. We will always keep this rate for the first 5
years. There is no contract associated with this price. We don’t believe in contracts
and don’t need them for profitable existence. Not having contracts with our members
will make us work harder to keep satisfaction levels at 99% because there are no
guarantees that any single member will still be with us the next month.
 Automated credit card billing is extremely convenient for both us as a club and also
for the members. They don’t need to remember to pay bills every month. They are
automatically done for them. They also get points on their cards if applicable. For us
it is very good because we never have any bills outstanding and we will always get paid
on the first of the month. If there are any cancelled payments, the payment is linked
to the member’s membership card so they are not allowed access to the gym until they
pay their dues. Do they sign up through the web site and pay at the site? What are the
costs associated with this – both capital and operating? I don’t see these costs in your
financials.
 Brand Statement
 The fastest, greenest and most affordable way to stay fit and healthy!
 The statement above will be the first and main goal/objective of the gym. However, we
want there to be another smaller goal that is purely spellingand environmental.
 We want the gym to be a small community of members who help each other decrease
their impact on the environment and live totally fulfilling lives.
 Revenue Projections
 Year 1 100 members $60,000 100 fully paid members is how many actual members?
They won’t all be full year members – some will start and quit, etc.
 Year 2 150 members $90,000
 Year 3 225
$135,000
 Year 4 315
$189,000
 Year 5 410
$246,000
Financial
If club membership growth goes as predicted, the capacity could be reached in 4-5 years and then
either a membership freeze would have to be put into effect to avoid crowding or a new club could
be built.
The average annual return on investment of the project is about 63%. Projected NI starts at $6,000
in the first year but grows to $133,000 in year 5.
The startup funds needed are only $140,000.
You need to use this section to explain all of the financial aspects of your business – you have
nothing here! Go and look at the examples provided. This section needs to be included.
References? Every source must be referenced.