Financial Information

Financial Information: (6 marks) 12. Initial startup: Estimate the amount of money it will take up front to launch this business. Will the $100,000 be sufficient? Do you need to raise additional cash, and if so, how? (See chapter 7.) Include a short breakdown of the startup costs by category. How will your group manage without any revenue during this time? Category Fixed Cost Variable Cost Location Real Estate (Leasing) 1,666.67/month ($20,000/annum) Licenses and Permits $2,000 Renovations/Interior Design $6,500 Equipment $36,500 Marketing and Advertising $10,000 Staffing $1,250/month ($15,000/annum) Utilities and Insurances $5,000 Miscellaneous Expenses $5,000 Total $60,000 $40,000 TOTAL COSTS $100,000* *The Total Costs computation is based on the annual cost the company would be incurring. However, the variable cost is shown on the graph to have a better estimate of how the costs are segregated according to the company’s need. The start-up amount of $100,000 is sufficient to start the Fit Films Business. Per the table above, the costs for the current month show that the allocated budget is enough to operate for at least one month even if there’s no revenue at all. Membership Level Billing Period Price VIP Member Annual $605 Monthly $55 Regular Member Annual $440 (free 1 month membership fee offer) Monthly $40 Walk-in (no membership required) Pay-per-use $5 Add on: Enrolment Fee One Time Fee $5 Locker Fee Pay-per-use $2.50 * Enrolment Fee is a one-time fee which will be allocated to produce membership cards. The estimated revenue for the current month will be $4,005. This revenue is achievable given that the company is new and unique to people’s perspective. Advertising and Marketing will help it boost to people making them curious about the new-found “Gym with Movie.” No. of Customer/s Membership Level Total Price 1 VIP – Annual $605 5 VIP – Monthly $275 5 Regular – Annual $2,200 20 Regular – Monthly $800 25 Walk-in $125

Total Revenue: $4,005 13. Ongoing Revenue - How much revenue from sales do you expect in year 1 and beyond? How slowly or quickly will your revenue grow? Per statistics and data, Gym or Fitness and Health business is growing across Canada. It is highly possible that in the first year there will be an estimated NET REVENUE of $45,000 equivalent to 3,750 average monthly net revenue. See below chart for additional information of fitness industry year on year revenue. Statistics: https://www.wellnesscreatives.com/fitness-industry-statistics-growth/ https://www.ibisworld.com/canada/market-research-reports/gym-health-fitness-clubs- industry/#IndustryStatisticsAndTrends 14. Ongoing expenses - What expenses will you incur in the first year your business is open? Category Yearly Expenses Rent $20,000 Salary $15,000 Add on Equipment $5,000 Add on Staff $3,000 Add on Renovation $2,000