Elite Athletics 2300 Valley View Lane Irving, Texas 75062 Business Plan Brandon Allen Cole Belew Alex Garcia Amanda Kissam Makenzi Wassenaar 2300 Valley View Lane Irving, Texas 75062 Dear Mr. Davis, We would first like to thank you for taking the time to give us an opportunity to manifest our vision of Elite Athletics through our business plan. Elite Athletics would like to offer your firm the chance to change the lives of aspiring young athletes all over the state of Texas. It will take caring hearts, such as yours, to give these children a second chance - a second chance to achieve their dreams. Every dream comes at a cost. With an investment of $250,000 with 30% ownership from your firm, those dreams will become a reality. Aspiring athletes from the ages of 5-18 often experience career-changing injuries. From broken bones to torn ligaments, many injuries take kids off the field and into a doctor’s office, often far away from home. Here at Elite Athletics, we have created a physical therapy center that is centrally located in school districts in the Dallas/Fort Worth area that provide athletes a recovery plan close to home, at a low cost and that provides an uplifting environment that gets them back in the game a better person than they were before. There is nothing out there quite like Elite Athletics. We distinguish ourselves above competing physical therapy clinics by creating an environment where not only bodies are healed, but so are hearts. With a large portion of our staff coming from a strong athletic background, our therapists relate to more than the injuries, but to the game. We use our clinic locations, which are strategically placed in the center of each school district’s athletic organizations, to provide a safe place for athletes to travel to during or after school for treatment. Elite Athletics is more than just physical therapy. Elite Athletics is for athletes, by athletes where we encourage the communities to wrap their arms around aspiring athletes in hope for their full potential to be achieved despite tragedy in the game. We believe that athletes are formed by communities and therefore we will sponsor and assist in hosting community enriching activities such as summer camps and health education courses. With your investment you can guarantee that lives will be changed. Elite Athletics promises to be an investment you are proud of. According to our projections, in 24 months we expect you to get a complete return on your investment. That may seem like a long time, but the return on your investment that is immediate will be the athletes you help us create a lifelong impact upon. We want to thank you again for taking the time to look over our business plan. We hope that through our thoughts, projections and plans you too will be inspired to change the lives of many one fixed injury at a time. Sincerely, Elite Athletics 2 Confidentiality Notice This agreement is to acknowledge that all information within this business plan, provided by Elite Athletics, is exclusive to this business and confidential; therefore, anyone reading this plan agrees not to disclose or reproduce any of the following information without the written permission of Elite Athletics. It is also understood by the reader that the following information provided in this business plan, other than the information that is in the public domain, may cause serious harm or damage to Elite Athletics and will be kept in complete confidence. Upon request, this document is to be immediately returned to Elite Athletics. Signature _____________________________________________ Name (printed) ________________________________________ Date __________________ 3 Table of Contents I. EXECUTIVE SUMMARY …………………………………………………………………..……………………...…….6 Description of the Business Concept and the Business ………………………………………….6 The Opportunity and Strategy……………………………………………………………………………...6 The Target Market and Projections ………………………………………………………..……………6 The Competitive Advantages ………………………………………………………….…..……………….7 The Goals, Potential, Profitability, and Future Plans ……………….….……….………..……….7 The Management Team and Organization ………………………………………….…………….…..7 The Offering ………………….…………………………………………………………………………………….7 II. THE COMPANY AND ITS PRODUCT/SERVICE ………………………………………………….…………..8 Company Mission Statement ………………….……………………………………………………………8 The Industry ……………………………………………………………………………………………………….8 Service …………………………………………………………..………………………………………………….10 III. MARKET ANALYSIS ………………………………………………………………………………………….…….12 The Target Market ……………………………………………………………………………………………12 Market Size and Trends ……………………………………………………………………………………..13 Competitors and Competitive Advantage …………………………………..……………………….13 Estimated Market Share and Sales …………………………………………………………………….13 IV. MARKETING ……………………………………………………………………………………………………..……14 Overall Sales Strategy …………………………………………………….………………………………..14 Pricing ………………………………………………………………………….………………………………16 Service and Warranty Policies ………………………………………………………………………..16 Advertisement and Promotion ……………………………………...………………………………..14 V. OPERATION, LOCATION AND FACILITIES ………………………………………………..………………..16 Operation ………………………………………………………..…………………………………………..17 Location ………………………………………………………………..…………………………………….17 VI. MANAGEMENT AND ORGANIZATION …………………………………………………………..…………..18 Ownership ………………………….……………………………………………………………………….18 Key Management and Employees …………………………………………………………………18 Company Structure ……………………………………………………….……………………………..18 Compensation/Benefits ………………………………………………………………………………..18 Roles and Responsibilities ……………………………………..…………………………………….18 Employee Agreements…………………………………………………………….……………………18 VII. FINANCIAL PLAN …………………………………………………………………………………………………..18 Budgeting Plans ……………………………………………………………………………………………19 Highlights of Financial Statements ………………………………………………..………………19 Breakeven Analysis ………………………………………………………………………………………25 VII. CRITICAL RISKS AND CONTINGENCIES …………………………………………………………………..27 Potential Problems, Risks and Remedies……………………………………………..………27 Alternative Courses of Action ……………………………………………..………………………27 IX. HARVEST STRATEGY ………………………………………………………………………………………………28 Long Terms Plans ………………………………………………………………………………………28 Successors …………………………………………………………………………………….……………28 X. OVERALL SCHEDULE AND TIMELINES ……………………………………………………………………..28 4 Timing and Objectives ……………………………………………………………………………28 Deadlines and Milestones ……………………………………………………………………….28 XI. APPENDICES ………………………………………………………………………………………………………...…29 Resumes ………………………………….…………..………………………………………………30 Financial Statements ………………………….…………………………………………………35 Research ………………………………………………………………………………………………35 5 I. EXECUTIVE SUMMARY a. Business Concept and the Business i. Elite Athletics is a company who’s mission is to serve as a stage for caring therapists who are passionate about getting athletes back on the playing field, to provide specialized services to young athletes all over the state of Texas, and to support public school districts and their communities. When injured, an athlete would not only like to see his or her doctor take the injury and recovery process seriously, but also help him or her get back out, playing their sport, feeling encouraged and stronger than before the injury. We take the physical therapy portion of an injury and provide our patients with best care and encouragement an athlete would need to return to their sport not only fully recover, but stronger than before. b. Opportunity and Strategy i. When an athlete is injured they spend more than enough time going from one medical facility to the next. Elite Athletics provides one centrally located facility near the school district’s athletic field house for each school district to help save on drive time to physical therapy; the portion of the healing process that typically takes the longest. All of our staff will be required to have some sort of athletic background in order to truly understand what our patients are going through and to know the best way to help and encourage them. By providing a building in each school district that we contract with, we will be able to meet all of the needs discussed above and at a lower cost than most medical facilities because we have teamed with the school districts who have already paid a determined price in the contract to help cut back on some of the costs for the students and their parents. c. Target Market and Projections i. The target market for Elite Athletics is school districts with strong athletic programs. This will allow us to cater to all the students within a school district from middle school through high school. Once a contract is signed with a school district, Elite Athletics’ portable building will be built central to all the schools in that district. Build time for this structure will only take a day because the building will be transported in on semi-truck. This building will facilitate the medical staff and equipment necessary to help the athletic students of that school district. During the school year, hours for the building will be 7am to 7pm Monday through Friday. During the summer, the facility will be open Monday through Thursday from 10am to 5pm. ii. We plan on beginning in the Dallas/Fort Worth area by selling our service to one of the top school districts in this area: Allen. We will focus on the Allen school district for about three years before beginning to expand to other school districts. When we begin to expand, we will expand two school districts per year. Other top school districts we plan to expand to include: Southlake Carroll, McKinney Boyd, Arlington Martin, Mansfield, and Colleyville Heritage and Coppell. As our business continues to thrive we also plan to expand to the top ten school districts in the Dallas/Fort 6 d. e. f. g. Worth area which includes: Tyler Lee, DeSoto, Flower Mound Marcus, Lake Highlands, and Allen. Competitive Advantages i. Elite Athletics is the only physical therapy company that contracts with school districts in the state of Texas. We have a competitive advantage over other medical facilities because we will be centrally located for each school district, so our patients won’t have to worry about driving to another town to receive therapy. We are teamed with the school districts, so costs for treatment will be lower compared to independent medical facilities. Also, students that qualify for state free/reduced lunches will receive a highly discounted rate for our services at 60% off the regular price. Last, all of our staff has a background in athletics, so they understand the students’ needs and passion for their sport. This will lead to better care and motivation for the students. Goals, Potential, Profitability and Future Plans i. In order to help keep our costs as reasonable as a medical venture can be, we plan to start focusing solely on physical therapy. After students’ injuries are diagnosed by a physician, and the recovery process is determined, if there is physical therapy involved, students can come to us for help with the aide of the school district. There we will be able to provide these young patients with the physical therapy they need by a medical staff that all come from some sort of athletic background. This provides deeper understanding of the injuries these students are dealing with and the motivation young children and teenagers need to continue their fight to get better and become the best athlete they can be. Too often doctors and medical staff don’t understand an athlete’s mindset and dedication to the sport, and therefore don’t take an athlete’s injury as seriously as the should, thinking that the athlete will end up hurting themselves again before long. Our company will curb that problem. ii. Long-term wise, as our company continues to expand and grow we would like to see it become a place not only for physical therapy, but also for diagnose and repair, therefore making it a three step program. This will include an increase in all costs. It will require more staffing, larger facilities, and more equipment. On the other hand, it will increase profits because contracts with each school district will demand more money to cover these added costs and conveniences to the school districts. Management Team and Organization i. Each facility will have four to five physical therapists, two to three physical therapy assistants, and a two secretary. Our business includes five partners, who will work from an office in Dallas, but who will frequently visit our various locations. Each partner will pitch in a fair amount of cash making a grand total of twenty percent stake, and the remaining eighty percent will be covered by investors and an equity loan. The Offering i. Our goal is to sign contracts with individual school districts within Texas that will determine a dollar amount the school district will pay us in 7 II. exchange for physical therapy for their athletic students. The amount collected from the school district will go towards having one of our fullyfurnished facilities in their district, our medical staff, and the cost for some of the therapy. A remaining copay may have to be met by each individual patient depending upon what they are being treated for. THE COMPANY AND ITS SERVICE a. Company Vision and Mission i. The mission of Elite Athletics is to serve as a stage for caring therapists who are passionate about getting athletes back on the playing field, to provide specialized services to young athletes all over the state of Texas, and to support public school districts and their communities. Elite Athletics is committed to excellent treatment and rehabilitation for athletes by athletes. ii. Our Mission is achieved through: 1. Skilled therapists and assistants that have a background in a sports field 2. Provide a service to athletes that is second to none in getting our athletes back on the field 3. Convenient locations and hours that will enhance the flexibility of our company and give our patients a more convenient time frame 4. Variety in the age ranges and specific sport our doctors capture. 5. Become well-known in the community by word-of-mouth and being a leader in the community b. The Industry i. Overview and background 1. Physical Therapy service is considered to be a $19 billion dollar industry and is steadily growing at a projected annual growth rate of hired employees at 5% or higher.(www.corporate.usph.com) Average cost of a start-up clinic is around $170,000 with the clinic seeing profit within the first 6-12 months and payback within two years. (www.ibisworld.com). As of now, are star-up cost show that we will be a below average start-up physical therapy company, mainly due to the fact that our contract with Allen I.S.D. states that they will provide the modular building to place on the school districts property in a balance distribution from their middle and high schools in the district. Elite Athletics will be considered a below average start-up clinic since we plan on cutting a lot of our overhead costs by asking the school district we are located in, to cover the cost of the land and building in the district. Our industry is one that doesn’t have a lot of competition or companies entering into and we will have that advantage over other companies that aren’t cooperating directly with school districts. 8 ii. Key Success factors 1. Some of the key success factors of this industry are to have a niche which is to cover middle and high school athletes yearround in their school sports. The quality of the service done by our doctors and assistants can make or break our company, and also the personality of our employees is a big success factor. We have to have employees that treat each customer/patient equally and are understanding to their needs and mental toughness level. Our buildings are another key factor to help us succeed in our business because of their mobility. Being able to move and place our modular building virtually wherever we want give us a big upside when other clients want to partake in our services or, if we move our building from one contract location to another. iii. Other key success factors include: 1. Focusing on the patient 2. Educating patients/parents on the injury and preventive care for the future 3. Becoming a role model in the community 4. Creating a relationship with our customers and their parents iv. Future Outlook 1. The outlook of Elite Athletics has a great upside to it and looks to maintain a stable long-term relationship with the Industry. Recent demographics so and increase in the population each year in the city of Allen, TX by an average of 1.8% from year 2011 to year 2014. Now comparing the increase in middle and high school students attending Allen ISD schools, we have found that the school’s enrollment percentage for the middle and high schools is an average of 3.7%. 2. With our target market being middle and high school athletes, the outlook is looking to hold steady, especially with the school districts we are attracted to being the tops in the state as far as athletics goes. Also, the average amount of income for the city of Allen is $112,143, which shows that these families are middle, middle-upper, and upper class families living in this city. This shows that families in Allen have a good amount of disposable income, and with sport being a big part of the city’s culture, we can guestimate seeing a portion of that money go toward their kids athletic careers, whether it be buying them new gear, or getting rehab from Elite Athletics. v. Major players and where the company fits in 1. We will be competing with companies like Athletic Advantage Physical Therapy, and Allen Therapy Center. All three clinics are mainly sports based and are in the Allen, TX area. 2. Athletic Advantage Physical Therapy offers a niche we do not cover which is dance injury rehab 9 (http://www.aaphysicaltherapy.com/services.html), but we compete in every other position. They also offer a nutrition coach which we do not provide and will not provide any time soon (http://www.aaphysicaltherapy.com/staff.html). Athletic Advantage Physical Therapy is also only open MondayThursday from 10:00a.m. - 6:00p.m (http://www.aaphysicaltherapy.com/athletic-advantagephysical-therapy.html), which works to our advantage because we are open Monday- Friday from 7:00a.m. – 7:00p.m. They accept all insurance carriers, which give them the edge because we only accept the major insurance companies in Texas. 3. Allen Therapy Center is another clinic located in Allen, Texas that has the exact same services we offer and may of the exact same condition we are planning to treat as well (http://www.posmc.com/allen-therapy-center/). Hours of operation are the same for them and us except on Fridays; they are only open from 7:00a.m. – 5:00p.m so we are open two more hours than them on Fridays. 4. Compared to these competitors, we fit right into our niche for dealing with high school and middle school athletes and also are able to compete because we have a closer location offering the same services as our competitors. Competition will be stiff but we match up well with these clinics because of our placement of our modular buildings, but we will lose customers who do not have the insurance providers we take. Luckily, we offer the discounted prices for people without insurance that qualify. c. The Service i. Nature of Uniqueness 1. What makes Elite Athletics unique compared to other sport physical therapy clinics is that each clinic we have is located in a school district close by that has a strong athletics program. With school athletes being our target market, this allows us to make it a lot more convenient for our patients to come see us because we are minutes away. With our modular buildings, we are able to move from location to location with efficiency and effectiveness. So, if the participating school district wants to end the contract, it will be easy to pick up and move, and that space could be used for something else instead their just always being an empty building there. We can also move buildings from one contract end and another contract beginning. ii. Benefits to School District/Athletic Department 1. The convenience of having your student rehab right around the corner instead of miles away 10 2. Your students will be working with professional therapists and assistants that have played the sport they are in or at least have knowledge of that sport. 3. Having extended office hours to accommodate the single working mom/dad to give them more or an option for clinic visits 4. Our doctors will be notifying the school respective head trainers to continue the rehab process in school as well. iii. Profit Potential and Durability 1. Seeing that this is a $19 billion industry, the profit potential looks very promising and the industry is very durable because in-school sports are a big part of the Texas culture and especially the Dallas/Ft/Worth area. Every year there is going to be an estimated growth in the company’s clients which in turn brings in more revenue (see income statement year 1-3). Also since the city of Allen, TX grew at an average rate of 1.77% in population from 2010-2014(www.cityofallen.org), and is expected to grow by an average of 2.3% in 2014 and so on(www.allentx.com);, we can assume these families will have children and that there’s a good chance that they will play youth sports. iv. Difficulties and Risks, Proprietary Issues 1. Entering into contracts 2. State Licensure 3. Regulation of clinic 4. Keeping up with regulatory boards v. Key Suppliers 1. ProMed Xpress is our sole retailer in supplying the company and its needs for clinic supplies and equipment. This company has all of the equipment and tools we need to effectively service the students we will be working with. Their prices are very competitive with other top companies but they offer a little more variety of the top name brands out there today. Since we are a business buying their products, they are offering us free shipping, which is a big plus, and a payment option that is net 30. d. Entry and growth strategy i. Our competitive strategy starts of as wanting to fill the niche of school athletes from middle to high school who are injured that need help after surgery. Being able to be located within school districts and located in an extremely close radius than most clinics also give us an 11 advantage. Our doctors that are on staff have some affiliation with a sport, or have played the sport they are providing the services for. e. Start-up Costs Startup Budget April 27, 2014 Cash Needed to Start Monthly Costs Salary of owners-managers All other salaries and wages Rent Advertising Delivery expense Supplies Telephone Utilities Insurance Taxes, including social security Interest Maintenance Transaction Fee (Avg.) Legal and other professional fees Miscellaneous Subtotal One-Time Costs Furniture and Equipment Installation charges Legal and other professional fees Licenses and permits Advertising and promotion for opening Subtotal Totals III. % of Total $0 46,848 695 200 125 250 150 1,200 8,000 50,333 0 200 600 100 350 $109,051 0.1% 0.4% 0.1% 0.2% 67.3% $42,875 2,000 500 500 7,000 $52,875 26.5% 1.2% 0.3% 0.3% 4.3% 32.7% $161,926 100% 28.9% 0.4% 0.1% 0.1% 0.2% 0.1% 0.7% 4.9% 31.1% MARKET ANALYSIS a. Target Market i. The target market Elite Athletics aims for are powerhouse athletic programs within the state of Texas. These athletic programs are 12 within specific school districts that have athletes that range from grades middle school to high school. These schools districts are particularly in need of a physical therapy program that will allow students to receive treatment at a discounted rate, near the child’s school. During our first year, we expect to appeal to Texas’ largest school districts within the Dallas/Fort Worth area and plan to branch out to the Houston, Austin and San Antonio metropolises by the fifth year of business. b. Market size and trends i. The market for Elite Athletics is rather large. While Dallas, Houston and San Antonio provide the strongest athletic programs; there are approximately 1050 different school districts in the state of Texas that act as potential customers for Elite Athletics. The Texas population is rapidly growing due to the strong economic status it holds compared to the rest of the United States population. With a growing population, we are seeing the need for more classrooms, creating larger districts, therefore creating a growing market for Elite Athletics. We are also seeing an increase in childhood athletic involvement. c. Competitors and competitive advantages i. There are no physical therapy companies that are currently contracting to school districts in the state of Texas. The main competition that Elite Athletics will experience over time is the local physical therapy offices in each individual city. Offices such as Texas Physical Therapy in Austin, Texas, Pride Rehabilitation in Dallas, Texas and South Texas Injury and Rehabilitation Center in San Antonio, Texas will be directly competing with Elite Athletics when it comes to the overall market share for injured athletes. ii. Their strengths are the fact that they are the current number one locations in their area, they are often directly related to hospitals and have also already established rapport and reputation within their communities. Their weaknesses are that they are often located in medical districts far away from schools, are highly expensive and require kids to get taken out of school for appointments. At Elite Athletics, those problems are solved. There are different pay plans depending on whether or not the student has insurance and if they are on the State’s “free/reduced lunch.” iii. Our potential new customers will come from school districts in the state of Texas, when it comes to new contracts. However, new individual customers will come from the schools and camps within the contracted districts. Of course, there will be some athletes that choose to stay with their own outside physical therapists. There will be potential students in the elementary schools that pose as potential future customers. d. Estimated market share and sales i. Our specific niche will be Texan, athletic students in powerhouse athletic programs. Our first school, Allen High School, will be the 13 IV. target niche in the beginning, where Elite Athletics will eventually branch out to more as time goes on. Our specific niche includes students in middle and high schools within our target districts. ii. Estimated market share will be approximately 20% of the total patients in physical therapy in the city of Allen. Considering there are many physical therapy patients in the area that are not in our particular age group, sport-related, etc. iii. Projected sales for the year, on average, are $322,500, year one. Projected sales for year two are $774,000. Projected sales for year three are $1,290,000. MARKETING a. Overall marketing strategy i. Elite Athletics will require a specific marketing plan. The sales strategy for Elite Athletics will include 75% of our sales coming from our target market and 25% coming from new customers. We expect to have no less than 15 appointments a day during the school year and no less than 5 appointments a day during the summer months. Elite Athletics will be present at all major athletic events including banquets, open houses and games. We will have access to the district’s PTA and student directories for mail outs. There will also be regular articles and advertisements placed in school programs, newspapers and directories. We will also volunteer to speak in classrooms pertaining to physical health. All of these things will help increase our rapport within the community, increase business awareness and as a result, increase our overall customer base. ii. Elite Athletics will have a centrally located facility near the district’s athletic field house. This will provide a location where our target market will be in close proximity to our services allowing cheaper travel costs. With the high traffic from students going to and from the athletic centers, there will be an increase of awareness of our facility. iii. Advertising and promotion will be one of the most exciting parts of our program. To start at the basics, our facilities will have signage on the outside (a basic, in-the-ground sign). As stated above, we will have a large presence within the school district and the community. We will purchase banners and signage to post at the stadiums, athletic facilities and inside gymnasiums. Pertaining to media, due to our presence between signage and representatives, logos will likely be visible on any video footage. T-shirts will be given to all athletes who complete our program; students involved in athletic programs and also participants in our camps and community 5k runs. iv. Social media marketing 1. Involvement with athletes and school district accounts for social media presence and cheap marketing 14 v. vi. Another way we will advertise and market Elite Athletics is through fun summer camps and community 5k runs. By hosting events like these, there will be an increase in involvement with our target market. Our start up events, the summer before our first contracted school year will be free events, where later down the road, we will charge as a way to collect extra funds. The benefit to these events is not only financial for Elite Athletics, but through our involvement in the community we hope to increase health knowledge and community involvement. 15 b. Pricing i. Table of pricing per treatment, depending on insurance status and school related discount program Prices: With Insurance Without Discount Price (80% Off) Insurance (40% Off) Assessment $32 $158 $95 Electrical Stem. $23 $113 $68 Elec. Stem. W/hot & cols therapy $26 $130 $78 Functional Training $23 $113 $68 Manual Therapy $23 $113 $68 Manual Therapy Hot/Cold $26 $130 $78 Therapeutic Exercise $23 $113 $68 Therapy Exercise Hot/Cold $26 $130 $78 Electrotherapy/Ultrasound $23 $113 $68 Supervised Exercise $9 $43 $26 Whirlpool $13 $65 $39 Physical Performance Test $14 $68 $41 V. ii. Pertaining to service and warranty policies, for Elite Athletics particularly, if athletes return to the game after completing their entire physical therapy program and reinjures themselves, they are invited to return to Elite Athletics at a reevaluated price (if reimbursement is required, it will be). OPERATION, LOCATION AND FACILITIES a. PRODUCT FEATURE i. Elite Athletics L.L.C. offers year round physical therapy for student athletes. Elite Athletics, L.L.C. will be open Monday through Friday, throughout the school year, from 7 am to 7 pm. There will be special hours during the summer, Monday through Thursday, from 10am to 5pm. b. PRODUCT BENEFITS 16 c. d. e. f. g. i. Elite Athletics, L.L.C. offers student athletes, 7th to 12th grade, an opportunity to get back on the field, better and stronger than ever. Our staff will provide athletes with the necessary nutrition and fitness regimen to nurse them back to full health. ii. We understand that many players, when they suffer an injury, have to travel to far in order to get treatment, but with Elite Athletics L.L.C they don’t have to travel much, you can say that we are located in their own backyard. UNIQUENESS i. Elite Athletics, L.L.C. has its central office located in Irving, but will set up a temporary medical center in close proximity to the school district we are contracted with, it makes it convenient for the players, the players would have to travel less. We will have personnel with a background in sports, meaning that they either played in high school or played at the collegiate level, so that they know or have an idea of what the athlete is going through. LOCATION i. Elite Athletics, LLC headquarters will be located at: 2300 Valley View Lane, Irving, Texas 75062 PROXIMITY TO TARGET MARKET i. Our target market is school districts, with a top rated school athletic program. In this case, our school district is the Allen Independent School District, (Allen ISD). We know that school districts that are deeply involved in their athletic program would enjoy having their athletes coming back strong and better. Elite Athletics L.L.C. would rent a temporary facility and place in near proximity to all schools. This way the students are not going to multiple facilities and traveling far to get quality service. We would promote the clinic by having fitness camps around the communities that we are pursuing. ii. Traffic count is around 5-30 students a day LABOR i. Labor needed for Elite Athletics, LLC would consist of physical therapists, a bookkeeper, medical secretary, technicians and cleaning crew FLOOR PLAN AND FACILITIES i. Our central office is located at 2300 Valley View Lane, Irving, Texas 75062. The office consists of two rooms. The central office leases for $650 a month. (Craigslist ad) ii. The physical therapy clinic located within the district. The physical therapy clinic itself is 5,600 Sq. Ft. and is equipped with 4 exam rooms, a large therapy room, 3 offices, a business area, waiting room, storage, and restrooms. The physical therapy room measures at 2676 17 VI. VII. S.F., it is a large room that will house up-to-date equipment. The physical therapy clinic will also include a whirlpool. The price of the rental building will be included in the contract with the school. The school will pay the lease of the physical therapy clinic (physical therapy). MANAGEMENT AND ORGANIZATION a. Elite Athletics is a Limited Liability Corporation (LLC). i. Benefits 1. Limited personal liability to owners 2. Avoid double taxation 3. The legal protection of personal assets ii. 5 Owners (depending on the total of initial investment) 1. Makenzi Wassenaar – 20% 2. Brandon Allen – 20% 3. Alex Garcia – 20% 4. Amanda Kissam – 20% 5. Cole Belew – 20% b. COMPANY STRUCTURE i. Reporting relationship (organizational chart). 1. Cleaning crew reports to Owners. Bookkeeper reports to the owners, and works side by side with the Medical Secretary. Medical Secretary reports to the Physical Therapist. Physical Therapist Assistant reports to Physical Therapist. Physical Therapist reports to Owners. c. KEY MANAGEMENT AND EMPLOYEES i. Owner – should have capital and business administration management experience ii. Physical therapists – must have a Doctor of Physical Therapy Degree OR Master of Physical Therapy OR Master of Science in Physical Therapy Degree (cite 1) iii. Physical Therapy Technicians/Assistant FINANCIAL PLAN 18 Income Statement Elite Athletics June 2014-June2015 Financial Statements in U.S. Dollars Revenue Gross Sales Less: Sales Returns and Allowances Net Sales 322500 0 322500 Cost of Goods Sold Beginning Inventory Add: Purchases Freight-in Direct Labor Indirect Expenses Inventory Available Less: Ending Inventory Cost of Goods Sold 0 42875 0 0 0 42875 42875 Gross Profit (Loss) 279625 Expenses Advertising Amortization Transaction Fees Depreciation Employee Benefit Programs Building Insurance Legal and Professional Fees Licenses and Fees Miscellaneous Office Expense Payroll Taxes Rent Repairs and Maintenance Supplies Telephone Utilities Wages Total Expenses 9400 0 7200 86400 3600 1700 500 4200 2600 0 8340 2400 3000 1800 14400 562180 707720 Net Operating Income (428095) Other Income Gain (Loss) on Sale of Assets Interest Income Total Other Income Net Income (Loss) 0 0 0 (428095) 19 Income Statement Elite Athletics June 2015-June 2016 Financial Statements in U.S. Dollars Revenue Gross Sales Less: Sales Returns and Allowances Net Sales 774000 774000 Cost of Goods Sold Beginning Inventory Add: Purchases Freight-in Direct Labor Indirect Expenses Inventory Available Less: Ending Inventory Cost of Goods Sold 0 0 Gross Profit (Loss) 774000 Expenses Advertising Amortization Transaction Fees Depreciation Employee Benefit Programs Building Insurance Interest Legal and Professional Fees Licenses and Fees Miscellaneous Office Expense Payroll Taxes Rent Repairs and Maintenance Supplies Telephone Utilities Wages Total Expenses Net Operating Income 2400 7200 86400 3600 1200 500 4200 600 0 8340 2400 3000 1800 14400 562180 698220 75780 Other Income Gain (Loss) on Sale of Assets Interest Income Total Other Income Net Income (Loss) 0 75780 20 Income Statement Elite Athletics June 2016- June 2017 Financial Statements in U.S. Dollars Revenue Gross Sales Less: Sales Returns and Allowances Net Sales 1290000 1290000 Cost of Goods Sold Beginning Inventory Add: Purchases Freight-in Direct Labor Indirect Expenses Inventory Available Less: Ending Inventory Cost of Goods Sold 0 0 Gross Profit (Loss) 1290000 Expenses Advertising Amortization Transaction Fees Depreciation Employee Benefit Programs Building Insurance Interest Legal and Professional Fees Licenses and Fees Miscellaneous Office Expense Payroll Taxes Rent Repairs and Maintenance Supplies Telephone Utilities Wages Total Expenses Net Operating Income 2400 7200 86400 3600 1200 500 4200 600 0 8340 2400 3000 1800 14400 622180 758220 531780 Other Income Gain (Loss) on Sale of Assets Interest Income Total Other Income Net Income (Loss) 0 531780 21 Ellite Athletics Balance Sheet June 2014 Assets Current assets: Cash Investments Prepaid Expenses Other Total current assets 2014 Fixed assets: Property and equipment Equity and other investments Less accumulated depreciation Total fixed assets 2014 Other assets: Goodwill Total other assets 2014 500,000.00 32,500.00 8,000.00 8,720.00 549,220.00 45,875.00 32,500.00 78,375.00 - Total assets 627,595.00 Liabilities and owner's equity Current liabilities: Accounts payable Accrued wages Accrued compensation Income taxes payable Unearned revenue Other Total current liabilities 2014 Long-term liabilities: Mortgage payable Total long-term liabilities 2014 Owner's equity: Investment capital Accumulated retained earnings Total owner's equity 2014 42,875.00 532,880.00 19,340.00 595,095.00 - Total liabilities and owner's equity Balance 32,500.00 32,500.00 627,595.00 - 22 Twelve-month cash flow PreStartup EST Cash on Hand (beginning of month) Fiscal Year Begins: Elite Athletics Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 Jun-14 Total Item EST May-15 0 100,000 52,032 46,939 41,846 36,753 31,660 26,567 21,474 16,381 11,288 6,195 1,102 1,102 Cash Sales 0 21,500 21,500 21,500 21,500 21,500 21,500 21,500 21,500 21,500 21,500 21,500 21,500 258,000 Collections fm CR accounts 0 32,250 32,250 32,250 32,250 32,250 32,250 32,250 32,250 32,250 32,250 32,250 32,250 387,000 Loan/ other cash inj. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 TOTAL CASH RECEIPTS 0 53,750 53,750 53,750 53,750 53,750 53,750 53,750 53,750 53,750 53,750 53,750 53,750 645,000 32,500 153,750 105,782 100,689 95,596 90,503 85,410 80,317 75,224 70,131 65,038 59,945 54,852 646,102 CASH RECEIPTS Total Cash Available (before cash out) CASH PAID OUT Purchases (merchandise) 0 Purchases Furniture/Equipment 0 42,875 0 46,848 46,848 46,848 46,848 46,848 46,848 46,848 46,848 46,848 46,848 46,848 46,848 562,176 Outside services 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Supplies (office & oper.) 0 250 250 250 250 250 250 250 250 250 250 250 250 3,000 Repairs & maintenance 0 200 200 200 200 200 200 200 200 200 200 200 200 2,400 7,000 200 200 200 200 200 200 200 200 200 200 200 200 9,400 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1,000 100 100 100 100 100 100 100 100 100 100 100 100 2,200 695 695 695 695 695 695 695 695 695 695 695 695 695 8,340 Telephone 0 150 150 150 150 150 150 150 150 150 150 150 150 1,800 Utilities 0 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 14,400 Insurance 0 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 96,000 Purchases (specify) Gross wages (exact withdrawal) Payroll expenses (taxes, etc.) Advertising Car, delivery & travel Accounting & legal Rent 23 Taxes (real estate, etc.) Interest Supplies 0 250 250 250 250 250 250 250 250 250 250 250 250 3,000 Transaction Fee (Avg.) 0 600 600 600 600 600 600 600 600 600 600 600 600 7,200 350 350 350 350 350 350 350 350 350 350 350 350 4,200 8,695 101,718 58,843 58,843 58,843 58,843 58,843 58,843 58,843 58,843 58,843 58,843 58,843 714,116 8,695 101,718 58,843 58,843 58,843 58,843 58,843 58,843 58,843 58,843 58,843 58,843 58,843 714,116 23,805 52,032 46,939 41,846 36,753 31,660 26,567 21,474 16,381 11,288 6,195 1,102 -3,991 -68,014 Other (specify) Miscellaneous SUBTOTAL Loan principal payment Capital purchase (specify) Other startup costs Reserve and/or Escrow Owners' Withdrawal TOTAL CASH PAID OUT Cash Position (end of month) 24 Breakeven Year 1Analysis Revenues Enter Start Numbers $322,500 Cost of Sales Gross Profit $62,275 $260,225 Fixed Exp. Income Taxes $684,420 Breakeven $0 Reset Income Chart $800,000 $800,000 $700,000 $600,000 Revenue Sales Revenue 100.0% Cost of Sales 19.3% $600,000 $400,000 Gross Profit 80.7% Fixed Expenses 212.2% Income Before Tax -131.5% Income Taxes 0.0% Net Income (Loss) -131.5% $500,000 $200,000 $400,000 $300,000 $0 $200,000 $100,000 -$200,000 0 1 2 3 4 5 6 7 8 9 10 11 12 $0 -$400,000 Months REVENUE Total Sales: FIXED COSTS -$600,000 $322,500 What-if Sales: 100% Value of What-if Sales: $62,275 What-if Cost of Sales: 100% Value of What-if Cost of Sales: Total Fixed Expenses: $684,420 What-if Fixed Expenses: 100% Value of What-if Fixed Expenses: Breakeven Percentage: 263.01% Total Cost of Sales: Breakeven Dollars $322,500 $848,210 Breakeven Date $62,275 $684,420 Aug 16 Breakeven Year 2Analysis Revenues Enter Start Numbers $774,000 Cost of Sales Gross Profit $14,300 $759,700 Fixed Exp. Breakeven $0 $900,000 $900,000 $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0 Reset Income Chart Sales Revenue 100.0% Cost of Sales 1.8% $800,000 $700,000 Gross Profit 98.2% Fixed Expenses 88.4% Income Before Tax 9.7% Income Taxes 0.0% Net Income (Loss) 9.7% $600,000 $500,000 $400,000 $300,000 $200,000 0 1 2 3 4 5 6 7 8 9 10 11 12 Revenue Income Taxes $684,420 Months REVENUE Total Sales: Total Cost of Sales: Total Fixed Expenses: Breakeven Percentage: FIXED COSTS $774,000 What-if Sales: $100,000 $0 100% Value of What-if Sales: $14,300 What-if Cost of Sales: 100% Value of What-if Cost of Sales: $684,420 What-if Fixed Expenses: 100% Value of What-if Fixed Expenses: 90.09% Breakeven Dollars $697,303 Breakeven Date $774,000 $14,300 $684,420 Nov 23 25 Breakeven Year 3Analysis Revenues Enter Start Numbers $1,290,000 Cost of Sales Gross Profit $16,900 $1,273,100 Fixed Exp. $684,420 Breakeven Income Taxes $18,844 $1,400,000 Reset Income Chart $1,400,000 $1,200,000 $1,000,000 Revenue Sales Revenue 100.0% Cost of Sales 1.3% $1,200,000 $1,000,000 $800,000 Gross Profit 98.7% Fixed Expenses 53.1% Income Before Tax 45.6% Income Taxes 1.5% Net Income (Loss) 44.2% $800,000 $600,000 $600,000 $400,000 $200,000 $400,000 0 1 2 3 4 5 6 7 8 9 10 11 12 $0 Months REVENUE Total Sales: Total Cost of Sales: Total Fixed Expenses: Breakeven Percentage: FIXED COSTS $1,290,000 What-if Sales: $200,000 $0 100% Value of What-if Sales: $16,900 What-if Cost of Sales: 100% Value of What-if Cost of Sales: $684,420 What-if Fixed Expenses: 100% Value of What-if Fixed Expenses: 53.76% Breakeven Dollars $693,505 Breakeven Date $1,290,000 $16,900 $684,420 Jul 14 26 VIII. CRITICAL RISKS AND CONTINGENCIES a. The physical therapy industry is an industry that is full of many risks that could be the difference between hurting someone and helping them. At Elite Athletics we understand that there are many risks associated with our line of work. Below is a list of some of the risks associated with starting a company in the physical therapy industry and some remedies on how we will address these concerns. i. Risk: Customer medical and personal information getting out to the public 1. Remedy: Not only will there be safes provided to lock up the information, but with paperwork needing to be thrown away the employees will then shred the documentation and dispose of it in a locked trash can and a specialized company will come and correctly dispose of it. Also the company will train all employees on the HIPAA act and how steps will be taken to avoid this situation. ii. Risk: Physical therapists getting caught in a malpractice claim 1. Remedy: in each therapy room there will be video cameras that will capture the activities of the therapists working with the patients so that there is proof that the therapist did as they were supposed to. Also the company will invest in malpractice insurance to help cover any costs associated with a claim. iii. Risk: Patient reinjures the same injury that Elite Athletics has treated 1. Remedy: Elite Athletics will only be responsible for the injury for the amount of time stated in the contract iv. Risk: Elite Athletics not having enough physicians 1. Remedy: Elite Athletics will employ five physicians and assistants for each location v. Risk: Patient injures another spot other than the treated injury at Elite Athletics 1. Remedy: The Elite Athletics contract states that the company is only responsible for the injury treated at the location. If another injury occurs it will be considered a new injury and will be billed as such vi. Risk: Elite Athletics not taking all insurances 1. Remedy: Elite Athletics partners with school districts in order to provide a less expensive copay for our patients. If the amount owed to Elite Athletics is too big for the patient a payment plan will be considered. vii. Risk: Patients walking into one of our buildings and thinking it is dirty or they are worried about sanitation. 1. Remedy: Elite Athletics will clean every piece of equipment needed for each therapy session as soon as the session is over. All of the equipment that can be sanitized using an autoclave will be sanitized after every use. viii. Risk: Therapists using a lot of medical jargon and patient not clearly understanding the physician. 1. Remedy: The physicians will speak to the customers as if they do not understand anything related to the injury and will also make a copy of their notes and have the patient sign a document stating they fully understand what was discussed. b. ALTERNATIVE COURSES OF ACTION 27 IX. X. i. At Elite Athletics we will ensure that we have the best form of malpractice insurance and also the best lawyers that we can find that specialize in the malpractice area. Anytime that an employee will put us in a situation that will affect the company in a negative way will be terminated on the spot. HARVEST STRATEGY a. After year one, Elite Athletics wants to work on paying off the debts acquired with purchasing facilities and equipment. After year three we want to slowly being to add two more schools to provide our services to. After year five we want to have up to at least four school districts in Texas that we provide our services to. b. The owners will continue to own the company as years go on. There will be investment opportunities for our previous investors to reinvest in the company for growth purposes or have the option to end our contract after their initial investment has been paid. i. This allows investors to have an option to reinvest or walk away. ii. The current five owners have an opportunity to be bought out by the remaining owners giving them a way out. c. Maintaining current customers i. Current patients will have the option to be involved in our community programs 1. 5k runs and camps are discounted for current patients 2. Our current customers have the program through their school districts, therefore our services act as a “nearly” free progam. ii. What happens when a patient graduates from high school? 1. There will be a list of referred physical therapy programs for high school alumni in the area. OVERALL SCHEDULE AND TIMELINES a. Timeline i. April 2014 – May 2014 1. Complete business plan 2. Speak with investors, school boards and districts 3. Sign contracts with investors and school districts 4. Obtain required permits and licenses 5. Obtain equity loan and investors ii. June 2014 – August 2014 1. Build and set up facility at Allen ISD 2. Purchase equipment 3. Hire staff 4. Participate in community events 5. Hold yearly, community events such as 5ks to promote business 6. Grand opening iii. August 2017-July 2018 1. Expand to two more school districts 28 XI. iv. August 2018 – July 2019 1. Expand to two more school districts v. August 2019 – July 2020 1. Expand to two more school districts vi. August 2020 – onwards 1. Expand to diagnosis and repair 2. Add on two different programs to existing school districts to complete our “three-in-one” concept to include diagnosis, surgery and therapy in a “onestop-shop” fashion b. Deadlines and Milestones i. October 2014- Begin creating social media sites for the company via Facebook, Pintrest, and Instagram ii. July 2014- annual 5k before school starts, all staff fully trained iii. May 2015 – at least 5 patients per day during summer and iv. May 2016 – at least 12 patients per day during summer and v. May 2017 – at least 15 patients per day during summer and vi. May 2017 – financially breakeven and begin earning profit Appendices a. Resumes – following pages 29 Alex Garcia 14222 Dallas Pkwy Apt#1118, Dallas, TX 75254 • (972) 804-7993 • glex09@gmail.com » Profile » Education University of North Texas, Denton, TX Expected BA General Business, 2014 » Skills Applications Microsoft Office Languages Fluent in Spanish. » Work Experience Studio Movie Grill, Plano, Texas Expo, Summer 2011- Summer 2012 Assistant to the Supervisor, In charge of kitchen when Supervisor not present. Close kitchen down and make sure everything was turned off. Sweet Tomato, Dallas, Texas Cashier, 2007-2009 Would count money out, Greet customers when they walked in the door. Count money at the end of shift to make sure it matched. » Activities President of Sigma Lambda Beta, Denton, Texas 30 31 32 33 34 Financial Statements Proforma Income Statement……………………………………………………………………..19 Proforma Balance Sheets…………………………………………………………………………22 Proforma Cashflow Analysis……………………………………………………………………..24 Research "Chronicle Honors Top High School Programs." 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