4/25/2014

Air Jordan Elite Triangle Basketball Academy

Zachary Parisher, Ryan Mallory, Ben Elliott, Philippe Moreau

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Table of Contents Executive Summary ...................................................................................................................................... 3

Agency Data .................................................................................................................................................. 4

Historical Information ........................................................................................................................... 4

Community Needs ................................................................................................................................ 7

Customer Base ...................................................................................................................................... 7

Level of Competition ............................................................................................................................. 8

Industry Data .............................................................................................................................................. 10

Forecast ............................................................................................................................................... 10

Financial Operating Characteristics and Trends ................................................................................ 14

Financing Options ............................................................................................................................... 22

Governing Laws ................................................................................................................................... 24

Market Data................................................................................................................................................ 28

Market Strategies ............................................................................................................................... 28

Market Areas ...................................................................................................................................... 32

Market Segmentation ......................................................................................................................... 35

Customer Profile ................................................................................................................................. 35

Pricing Trends ..................................................................................................................................... 37

Competitors ........................................................................................................................................ 40

Sales Projections ................................................................................................................................. 46

Management Analysis ................................................................................................................................ 46

Mission Statement .............................................................................................................................. 46

Long Term Goals ................................................................................................................................. 47

Short Term Goals ................................................................................................................................ 47

Performance Indicators ..................................................................................................................... 48

Timeline for Implementation .............................................................................................................. 51

Plan Assumptions ................................................................................................................................ 51

Strengths ............................................................................................................................................. 51

Weaknesses ........................................................................................................................................ 52

Risk Analysis ........................................................................................................................................ 52

Action Steps ........................................................................................................................................ 52

Management Plan ...................................................................................................................................... 56

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Organizational Structure ..................................................................................................................... 56

Allocation of Human Resources .......................................................................................................... 57

References ................................................................................................................................................. 58

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Executive Summary

Air Jordan Elite Triangle Basketball Academy will encompass eight full regulation basketball

courts to facilitate 5 versus 5 person basketball games to prepare young men and women athletes for

NCAA Basketball. Daily practices, games, and camps will help sharpen these future stars into NCAA

Division 1 elite players. Through our elite training staff, competitive games, grueling practices, and

skillful camps we will develop these youth into formidable ball players. In addition to our elite coaches,

we will bring in star players from NC State, UNC, Duke, and the Charlotte Bobcats to work with our

players. As a feeder program for these elite basketball universities of the Triangle, we will greatly benefit

these schools by providing them with young talented players. We will coordinate with these local

organizations to have two college or NBA players every other practice to coach our athletes. Days that

these College or NBA stars are here will be primarily skill development. Practices without College or

NBA players will focus on running plays, scrimmaging, and conditioning. This balance of skill

development and practice will be our secret to success. Also, having such high talent level going toe-to-

toe each day will maximize potential for player development. Iron sharpens iron! In addition to the

Basketball aspect we will use our courts for many different things. It will be able to be used as a

volleyball court, pickle ball court, or anything that can be done in an open space. We will also have a

gym and training area, plus study rooms for the kids to get their school work done. We are marketing the

basketball side of things to kids 11-18 for the everyday workouts. However we plan on having leagues

and camps for all ages. We also want to market our gym to multiple types of people so that we can

maximize revenue. As our facility grows we plan to evolve into something similar to the IMG academies

and begin getting players who are nation and worldwide.

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Agency Data

Historical Information

Dr. James Naismith created the game of basketball in Springfield, MA at the local YMCA in

1891. Naismith wanted to create a game that could be played inside during the winter months in a

relatively small gymnasium. He created the

game of what became to be known as basketball.

The first game was played with a soccer ball and

two peach baskets. His first set of rules were as

follows:

Naismith’s Original Rules of Basketball

1. The ball may be thrown in any direction with one or both hands.

2. The ball may be batted in any direction with one or both hands, but never with the fist.

3. A player cannot run with the ball. The player must throw it from the spot on which he catches it,

allowance to be made for a man running at good speed.

4. The ball must be held in or between the hands. The arms or body must not be used for holding it.

5. No shouldering, holding, pushing, striking or tripping in any way of an opponent. The first

infringement of this rule by any person shall count as a foul; the second shall disqualify him until

the next goal is made or, if there was evident intent to injure the person, for the whole of the

game. No substitution shall be allowed.

6. A foul is striking at the ball with the fist, violations of Rules 3 and 4 and such as described in

Rule 5.

7. If either side make three consecutive fouls it shall count as a goal for the opponents (consecutive

means without the opponents in the meantime making a foul).

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8. Goal shall be made when the ball is thrown or batted from the ground into the basket and stays

there, providing those defending the goal do not touch or disturb the goal. If the ball rests on the

edge and the opponents move the basket, it shall count as a goal.

9. When the ball goes out of bounds, it shall be thrown into the field and played by the first person

touching it. In case of dispute the umpire shall throw it straight into the field. The thrower-in is

allowed five seconds. If he holds it longer, it shall go to the opponent. If any side persists in

delaying the game, the umpire shall call a foul on them.

10. The umpire shall be judge of the men and shall note the fouls and notify the referee when three

consecutive fouls have been made. He shall have the power to disqualify men according to Rule

5.

11. The referee shall be the judge of the ball and decide when it is in play in bounds, to which side it

belongs, and shall keep the time. He shall decide when a goal has been made and keep account of

the goals with any other duties that are usually performed by a referee.

12. The time shall be two 15-minute halves with five minutes' rest between.

13. The side making the most goals in that time shall be declared the winners.

Naismith took over a new position with the University of Kansas as a physical education teacher and

a chaplain. After it was first played in 1891 the game began to take off and began to be seen in different

nations as early as 1893 as a part of the YMCA Movement. The first ever college basketball game was

played on January 18, 1896, when the University of Iowa invited student athletes from the new University

of Chicago for an experimental game. The final score was only Chicago 15, Iowa 12. It was not until

1963 until the first basketball game was nationally televised. Currently there are over 330 colleges that

now offer the game of basketball at the Varsity level. Now the NCAA Tournament, or “March Madness”,

is one of the most watched sporting events in the world. The Olympics introduced basketball in 1936 at

the Berlin Summer games. Since then they have been in every Summer Olympic Games and are

governed by the International Federation of Basketball, or FIBA (which comes from the French

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translation). In 1949, the National Basketball

Association (NBA) was formed with the Basketball

Association of America and the National Basketball

League came together as one. On August 5th, 1976 the

NBA absorbed another league, the American Basketball

Association. Now the NBA has 30 teams and has

countless stars from 11-time World Champion, Bill

Russell, to 6-time Finals Most Valuable Player, Michael

Jordan, to 2-time Defending World Champ, LeBron

James. Internationally basketball is the second most

popular team sport behind only soccer, and there are over 300 million people who play regularly. The

reason it is so popular the ease of sport to be played

almost anywhere there is a hoop and a ball. It can be

played with one on one or with as many as five players

per team. It is played from the recreational level with

kids as young as four or five, through the high school,

collegiate, and professional ranks. The triangle itself

boast a proud history when it comes to the game of basketball. The three major universities in the area,

Duke University, North Carolina State University, and the University of North Carolina, all have multiple

NCAA National Championships and are home to some of the greatest college basketball players and

coaches.

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Community Needs

Currently in the triangle there are many places where the game of basketball can be played,

however there are not any facilities specifically built for the purpose of basketball. YMCA of the

Triangle currently holds 13 facilities however only 6 offer basketball leagues. The City of Raleigh has 18

indoor basketball courts, however only a few are air conditioned and many have a tile floor which is not

the best court available. The Town of Cary only has 3 indoor courts for residents to play on. All the

universities in the triangle have basketball courts, however these are restricted to students or faculties.

Even with all of the tradition of the game of basketball in the Triangle, there is no place specifically built

facility for players to come in and play, and subsequently sharpen their skills. There needs to be a place

where athletes from all over the triangle can come in and work on their game through free play, leagues,

and camps. Also the triangle, which is home to so much basketball tradition, does not have a place that

can support large basketball tournaments which could host teams from all over the state, nation, or world.

Customer Base

Wake County Durham County North Carolina United States

Total Population (2012) 952,151 282,081 9,748,364 313,873,685

Percent Change from '00 to '13 8.1% 6.7% 3.3% 2.4%

Persons Under 5 6.80% 7.40% 6.40% 6.4%

Persons Under 18 25.50% 22.60% 23.40% 23.5%

Persons 65 and Over 9.20% 10.40% 13.80% 13.7%

White Alone 69.6% 53.0% 71.9% 77.9%

African American Alone 21.4% 38.8% 22.0% 13.1%

American Indian/Alaskan Native 0.8% 1.0% 1.5% 1.2%

Asian Alone 5.8% 4.9% 2.5% 5.1%

Native Hawaiian/ Pacific Islander 0.1% 0.1% 0.1% 0.2%

Multi Racial 2.3% 2.3% 2.0% 2.4%

Hispanic/ Latino 10.0% 13.4% 8.7% 16.9%

White Alone, Not Hispanic/ Latino 61.6% 42.1% 64.7% 63.0%

Households 341,303 109,109 3,693,221 115,226,802

Persons per Household 2.59 2.34 2.51 2.61

Median Household Income $65,826.00 $50,997.00 $46,450.00 $53,046.00

Persons Below Poverty Line 10.9% 18.0% 16.8% 14.9%

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North Carolina is home to a very diverse population and we believe that we can create a facility

that not only includes elite youth basketball players, but a wide range of residents. The demographic

breakdown above is for Wake and Durham County, and how they compare to North Carolina and also the

nation.

The total population shows that in the surrounding areas there will be over a million residents that

could be served by our facility. It also shows that from 2000 to 2013 both counties have increased at a

rate higher than both North Carolina and the United States. This just confirms that there will be a large

enough market to support a facility like the one being proposed. Another statistic that bodes well for the

facility is that a quarter of Wake County and just under a quarter of Durham County is under 18 years old.

Since our market for basketball leagues, camps, and training will be males and females from the age 11 to

18. The last statistic that suggests this facility can make money and be successful is the high median

household income of Wake County and somewhat Durham County. Wake County is above both the state

and country average and Durham County is above the state average, while barely below the country

average.

Level of Competition

Building a facility in the Triangle area that supports basketball leagues, camps, and tournaments,

will create competition amongst existing businesses. Our facility will have many direct, indirect, and

other competitors.

Direct Competitors

Some of the direct competitors that Air Jordan Elite will face will be facilities such as local

YMCA, parks and recreation centers, and others.

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Probably the most notable and direct competitor will be the YMCAs of the Triangle. The

Triangle of North Carolina offers its residents 12 different YMCA facilities and all of them offer up

basketball courts.

Of these 12, 6 of them offer men’s and youth basketball leagues, but only 3 offer women’s

leagues. Residents of the Triangle can buy a membership to one of these facilities or it can buy a

membership to all of them. The majority of these memberships require a $100 or more starting fee and

then a monthly fee of around $30 to $40. It is somewhat clear that some families would not be able to

afford these steep costs.

Another competitor of our facility will be the basketball facilities offered by the local parks and

recreation departments. These are free to residents as long as they live within the boundaries of the

counties. The one difference between our facility and these facilities are the fact that we will focus more

on elite basketball training and college preparation. These other two direct competitors cannot offer the

same level of training that we will be able to offer.

Indirect Competitors

The other competitors in the area are going to be those businesses that will compete for the

discretionary income from families in the area. There are plenty of other sports companies and even

training facilities in the area, however there are not any basketball specific training facilities catering to

preparing youth athletes for college basketball. There are also a lot of other sporting events that could

take up the money such as college athletics from the many teams in the area, minor league baseball, the

Carolina Hurricanes, and other events located at different arenas such as PNC Arena, USA Baseball

Complex, and WakeMed Soccer Park. Other things in the area are the Durham Performing Arts Center,

multiple bowling alleys, theaters, skating rinks, and other family events that use of income. These can all

take up discretionary income, however if a youth basketball player and his or her family is serious about

playing at the next level they will find money to use our facility.

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Industry Data

Forecast

A trend in today’s sports world is the specialization in sports. As college sports become more and

more competitive, parents want to maximize the chance of their child obtaining a college scholarship and

thus force their child to choose a sport to specialize in. They often believe that this improves the child’s

abilities. However, specializing in one sport at a young age can have detrimental effects which include

burnout and overworked muscle. According to a study conducted by Robert Molina titled Early Sport

Specialization: Roots, Effectiveness and Risks, ‟few individuals who specialize in sport at young ages

make it to elite levels and reap the social, economic, and other benefits associated with success.” In

addition, “early success is no guarantee of later success in elite sport,” and “limiting experiences to a

single sport year-round may not be the best path to elite status.” Many highly successful athletes like

LeBron James and Alex Rodriguez have played a variety of sports when growing up. Even though our

business’ goal is to train elite basketball athletes, we will make sure that we expose the participants to a

variety of physical activities so they don’t get tired of basketball and work different muscle groups. We

want to implement study rooms in the complex so that the participants take their studies seriously and are

aware that a tiny portion of basketball players make a living out of the sport.

Our facility has to be aware of all the trends concerning the recreational field in order to serve our future

clients. According to the Health and Fitness Journal, the top five worldwide fitness trends are:

1. HIIT or High Intensity Interval Training

2. Body Weight training

3. Educated, Certified and Experienced Fitness Professionals

4. Strength training

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5. Exercise and weight loss

Other trends in the survey included fitness programs for older adults, functional training, yoga and circuit

training.

HIIT is a type of training involving short bursts of high-intensity followed by short periods of

rests. According to the survey’s respondents, “we love it because of the short time.” However, since this

type of training is very fast, there is a high injury rate. This is why it is important to have highly trained

professionals working these types of training. They can easily recognize if any participant is engaging in

dangerous behavior. This type of training is popular due to the increase in popularity of Crossfit, which

emphasizes working the whole body with minimal rest. People of today might not have the time to have a

traditional bodybuilding training with rests in between each sets, so they opt for a fast paced workout that

not only works out their muscles, but also their cardio. Most gym goers see this type of training as a good

compromise between straight cardio and strict bodybuilding. We would certainly have to integrate this

type of program in our gym program, but would have to make sure that classes would be given by

professionally formed staff.

Body Weight has been used for centuries as a way to build muscles for people. Air squats, lunges,

dips, push-ups and pull-ups have always been efficient to build muscles. Not only is this way of training

efficient, it also is inexpensive. People try to adopt a more naturalistic way of training and slowly get rid

of machines to adopt more simplistic movements. As most cross fit clubs would say: “Our body is the

machine.” Not only could we introduce all these equipment in our gym, which is pretty much a given in

any gym, but we also could introduce body weight specific training programs for both the youth and the

elderly. Young people that want to start weight training often don’t have the necessary strength to start

working with dumbbells and barbells. Therefore, in order to give them a base of strength, it is better to

have them perform some basic body weight movements. Body weight movements are also a good option

for older people, as these types of movements work out the core as well. In order to perform any kind of

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basic body weight movement, the core needs to be stabilized. These movements also strengthen the joints.

Older people rarely want to get bulky and strong, they often just want to maintain their physical shape and

not feel any pain when getting out of bed. Therefore, body weight movements can help them gain

flexibility and core strength at the same time.

As people are becoming more and more aware of the importance of physical activity, some

people want to become personal trainers to help beginners reach their goals. There are now accreditations

offered by national third-party organizations. There is also an exponential growth of educational programs

at colleges around the nation and the U.S. Department of Labor Bureau of Labor Statistics predicts that

“employment of fitness trainers and instructors is expected to grow by 24% from 2010 to 2020.” As the

fitness world is growing and more people are interested in becoming personal trainers, more programs are

also developed. In 2007, the Commission on Accreditation of Allied Health Education Programs

(CAAHEP) added a Personal Fitness Trainer accreditation for certificate (1 year) and associate (2 years)

degree programs. The accreditation for the academic training of the Personal Fitness Trainer joined

academic program accreditation for Exercise Science (baccalaureate) and Exercise Physiology (graduate

programs in either applied exercise physiology or clinical exercise physiology).

Strength training is still very popular among fitness junkies. Contrary to popular beliefs, strength

training does not necessarily create a bulky physique. It is especially popular among young males since

they are the ones wanting to gain mass either for specific sports or just to look better. According to the

study by the Health and Fitness Journal, ‟strength training remains popular in all sectors of the health and

fitness industry and for many different kinds of clients.”

Most diet plans combine a diet with regular exercise. People who are in the business of providing

weight loss programs will continue to incorporate regular exercise as well as caloric restriction for weight

control. The combination of exercise and diet is essential for weight loss maintenance and can improve

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compliance to caloric restriction diets and in particular weight loss programs. This principle will continue

to be a staple in the fitness world.

The concern for the health of aging adults has been consistently at the top of this survey, and this

year is no different. The so-called baby boom generation has now aged into retirement, and because they

have more discretionary money than their younger counterparts, we should capitalize on this

exponentially growing market. Baby boomers:

1. Have more discretionary income (wealth) than any other age group

2. Control 70% of the total net worth of American households - $7 trillion of wealth

3. Own 80% of all money in savings and loan associations and

4. Spend more money disproportionately to their numbers

There are also different fitness levels among seniors. This is why we should look into incorporating

different programs for them. It is important to market to this group, as not only do they have lots of free

time; they also possess most of the money.

Yoga is in tenth place on the list. It comes in a variety of forms, including Power Yoga, Yogalates,

and Bikram Yoga (the one done in hot and humid environments). Yoga is popular among younger people,

as the participation rate is 40.6% for 18 to 34 year olds and 41% for 35-54 year olds. It is mostly practiced

by females but males are adopting yoga more and more. Benefits of yoga include increased flexibility,

increased muscle strength and tone, improved respiration, maintenance of balanced metabolism and

improved athletic performance, among others. We will try to implement yoga in our facility, both for the

athletes and as an option for members.

Circuit Training is a group of 6 to 10 exercises that are completed one after another and in a

predetermined sequence. Each exercise is performed for a specified number of repetitions or for a set

period before having a quick rest and moving on to the next exercise. Circuit Training is similar to high-

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intensity interval training but at a naturally lower intensity. It is an easy way for beginners to gain some

strength before going on to more advanced workout. It is also a good way for people not used to strength

training to have a good workout.

Financial Operating Characteristics and Trends

First of all, it is important to determine what type of organization we are. The goal of our facility

is to make a profit, so we are a for profit organization. Of course, the goal is to promote physical wellness

in the community, but the bottom line goal is to make a profit, as this is what will enable us to function.

The level of capital intensity in the Gym, Health and Fitness Clubs industry is at medium. In

2014, for every dollar spent on wages, the industry incurs an estimated $0.24 in capital costs. Capital

costs are moderate for the industry and include the cost of fitness equipment, buildings, vehicles, furniture

and computers. Nevertheless, labor costs remain high because of administration, training, supervision and

maintenance requirements. Gym employees often need some kind of certification because they are

dealing with people’s health. Gyms and fitness centers seek to minimize their labor costs by employing a

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part-time labor force and employing instructors and personal trainers on an as-needed basis. The industry

has moderate capital intensity despite the low barriers to entry. The total startup costs are low but are split

relatively evenly between capital and labor.

The Gym, Health and Fitness Clubs industry is a little bit more labor intensive than capital

intensive. It is a mix between the new age economy, which provides recreational and health related

services, and the whole sale and retail economy which relies on labor rather than capital to sell goods. In

this industry, resources cannot be outsourced, so staff training must be provided to keep employees up to

date and increase revenue.

The revenue volatility in the Gym, Health and Fitness Clubs industry is low. Even though there

are varying degrees of membership rates across centers, which increase revenue volatility, the industry's

diverse array of services and fragmented nature minimizes volatility. Furthermore, general stability in

household disposable income over the past five years, despite a sizable decline during the recession, has

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translated to constant demand for the industry's products and services. Additionally, the general public’s

awareness of the importance of physical benefits has the industry growing even more.

While technically a discretionary service, health and fitness clubs are increasingly viewed by

consumers as a vital health expense. Furthermore, the structure of memberships mitigates revenue

volatility. Gyms and fitness centers have traditionally sought to sign up members for 12 to 24 month

periods and typically apply cancelation fees to contracts. These fees often deter customers from

cancelling their memberships so that they can avoid financial penalty.

The level of industry assistance is low, but it is increasing as more institutions promote the

benefits of assistance. Such assistance is a significant benefit for the industry, as it reduces expenses and

creates demand. The industry received indirect assistance from the federal government in 2009 under the

$787.0 billion stimulus package, or the American Reinvestment and Recovery Act of 2009. The

Department of Health and Human Services has been allocated $1.0 billion for a Prevention and Wellness

Fund.

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Many non-profit organizations do the promotion of sports and fitness through articles and

competitions. This is a great tool for us, as the more people are interested in fitness, the more they will be

willing to spend on gym membership. These Associations, even though they are not paired up with us,

provide assistance by promoting the importance of physical fitness. This could be considered as indirect

financial assistance.

Since we are building a brand new facility, operations and maintenance cost will be at a minimum

for the first ten years. This is because we will buy the best equipment possible. The equipment that we

will buy will be brand new, from the simplest to the most complex pieces. For example, a Rogue R6

power rack, which can serve for many exercises, is $1,495. For a good squat rack, we should pay around

$1,200 to $1,500. We will have a total of 10-15 racks in our gym. However, these racks can last a very

long time and they are a must for every athlete. There are many exercises that can be done at that rack:

squats, front squats, bench press, incline bench press, pull ups, chin ups, etc… Basketballs are not cheap,

but it is clear that we can get a discount since we will buy them in bulk. Plates and dumbbells are also

very durable. We can buy them at a reduced rate since we will buy a lot. Our main cost will be employees

and general maintenance like sweeping the floors and changing the lights.

Since most of our costs will be in powering this whole facility, the goal when building it will not

only be that it looks nice, but also that it as eco-efficient as possible. That means building the whole gym

while being conscious of the environment. This process doesn’t only apply on the construction of the site,

but also while the facility is operating. For example, by having large windows, the sun rays might come in

the gym and thus reduce the need for lighting. It might also reduce heating bills. For the winter, we will

look at efficient ways to keep the place warm. We will try to use geothermal energy to power our facility,

as it is viewed as an economical and renewable energy. Since we have minimal maintenance cost at the

beginning of the facility, we will focus our energy on having the most efficient facility.

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During the building phase of the facility, we will have to market our product so we can have

customers right at the opening. Marketing costs involve any media campaign intended to attract

customers. Thankfully, a lot of marketing campaigns are done via social media today. Social media is the

new way people communicate in today’s age and it is a great way to reach young people. According to

statisticbrain.com, “98% of people between 18 and 24 years old already use social media.” These social

media campaigns are cheap to run and they are very adaptable. We will have two main target markets for

our campaign: elite basketball athletes and older adults that want recreational opportunities.

Revenue stream

We will try to have some profits before the facility opens. We could do a promotion where if

people buy their membership before the opening, they would get a reduction. However, this wouldn’t

apply to elite basketball athletes, as we want to keep the elite image of our gym. Membership fees are

going to be our main source of revenue. Elite basketball athletes are often willing to pay the price to

develop their abilities, as they see it as an opportunity to get a college scholarship. However, people that

are looking only for recreational opportunities are more sensitive to the price. The price is elastic as far as

our recreational consumers, but it is inelastic for elite basketball athletes.

Our main revenue stream is membership fees. That is why it is important to be aware of the latest

trends in the fitness world so to keep customers. In order to retain customers, we could have a fidelity

program where faithful members could get rewards for being with the gym for so long.

Another revenue stream could be sponsorship. Sponsorships can be defined as the acquisition of

rights to affiliate or directly associate with a product or event for the purpose of deriving benefits related

to that affiliation or association. Ideally, we could pair up with Michael Jordan and the Air Jordan shoe

company. This would not only additional credibility to our facility, but also additional revenue. Air

Jordan, by using us to promote their product, could provide us with shoes in exchange. As for Michael

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Jordan, not only could he inject some money in, he would be very useful in recruiting prospective

recruits. If we could have prestigious recruits in our facility, this would be a great marketing tool. Other

partners could include Nike and Harris Teeter.

Finally, an additional revenue stream would be rentals. Some groups could rent some of our

facilities. For example, Carmichael Gymnasium at North Carolina State University rents some of its

facilities to community clubs around the triangle region. In times where the gym is not busy, we could

rent out those spaces to various clubs in the triangle area. It is vital to know the fitness trends in the area,

as if we know what people are looking for, we have a better chance of providing them the needed services

and thus gain customers.

Financial Accountability

Regarding the financial accountability, there are five (5) assertions made in the execution and

summarization of financial transactions. They are:

1. Existence and occurrence: The assets and liabilities actually exist at the report date and

transactions reported actually occurred during the reporting period covered.

2. Competence: There are no undisclosed assets, liabilities, or transactions.

3. Rights and obligations: The organization owns and has clear title to assets and liabilities, which

are the obligation of the organization.

4. Valuation and allocation: The assets and liabilities are valued properly and the revenues and

expenses are measured properly.

5. Presentation and disclosure: The assets, liabilities, revenues, and expenses are properly classified,

described, and disclosed in financial reports.

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Financial Reporting

Financial reporting can be seen as a summary of the organization’s performance. There are two main

elements of financial reporting.

The balance sheet summarizes the financial position of an organization at a certain point in time. It shows:

1. Changes in the business over a period of time

2. Growth or decline in various phases of the business

3. Business’s ability to pay debts

4. The financial position of the organization.

The balance sheet summarizes what an organization owns, what it owes and the difference between

the two. The assets of an organization normally are on the left side of the balance sheet. Assets are either

fixed or current. Fixed assets have relatively long lives. In our facility, workout machines, weights and the

basketball courts could be considered fixed assets. On the other hand, our current assets would be

basketballs, yoga mats or other items that have a life of about a year. Cash and accounts receivable, which

is money owed to the organization by the customers, are also current assets.

The right hand side of the balance sheet is the liabilities and owner’s equity. As with assets, there are

current liabilities and long-term ones Current liabilities in our case could be bills of all kinds and

maintenance. A debt that is not due in the coming year is classified as a long-term liability. This could be

a long-term loan.

The difference between total value of the assets and total value of liabilities is the shareholders’

equity. This means that if the organization would sell all its assets to pay off its debts, this is what would

remain.

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Here is an example of a balance sheet:

Another form that we should use for financial operating is the statement of cash flows. The basic idea of

these statements is to group all financial changes onto three categories: operating activities, financing

activities and investment activities. Here is an example of statement of cash flows:

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These forms can be used to look over the finances of the organization. We can look at the financial ups

and downs of the facility and adjust accordingly. All these forms’ purpose is to ensure that we follow the

financial position of the organization and can make adjustments if we are heading in the wrong direction.

Financial Options

In order to start our business, we need venture capitalists that will provide us with the needed

financial boost. Venture capitalists are defined as investors who either provide capital to startup ventures

or supports small companies that wish to expand but do not have access to public funding. Venture

capitalists are willing to invest in such companies because they can earn a massive return on their

investments if these companies are a success. These people lose money when the company they invest in

doesn’t succeed, but they are typically wealthy enough that they can afford to take the risks associated

with funding young, unproven companies that appear to have a great idea and a great management team.

The risk is low and the rewards can be great.

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One venture capitalist company in North Carolina is Lookout Capital. This company invests in

and works with up-and-coming growth companies and successful small businesses throughout North

Carolina. Lookout Capital operates under two guiding principles:

1. It wants to help promising early stage and small company executives grow their businesses, build

great companies and realize liquidity, and

2. It is people-focused. It serves patient investors and collaborators who seek what is in the long

term best interests of our portfolio companies and clients. Their style of investment management

and collaboration is to cultivate lasting partnerships between their firm, the portfolio companies,

clients and investors.

Another company that could be interested in our project is Idea Fund Partners. This company’s

philosophy is pretty strict. Idea Fund Partners:

Invest in people they know. According to their website: “If you want us to invest in you, get to

know us first. It is not a good idea to ask us for money before we know you. It will take some

time to get comfortable with one another.”

Appreciate commitment. Conviction and perseverance are important qualities in entrepreneurs.

Invest early. Have been making early stage investments as a group since 2002.

Are patient investors. They know it usually takes a long time to build a great company, and

business plans typically underestimate the capital required.

Like to invest with friends. This is why it is important to get to know them first.

Like to get involved. Tend to be most useful during the early stages of a company because that

has been our focus for over a decade.

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Governing Laws

As a new fitness facility, we have to follow governing laws. Not following these laws could result

in having our operations revoked or worse, harming our patrons, which would not only result in a very

probable lawsuit, but also in very bad publicity.

The Occupational Safety and Health Administration (OSHA) is the main federal agency charged

with the enforcement of safety and health legislation. Its mission is to” assure safe and healthful

conditions for working men and women by setting and enforcing standards and by providing training,

outreach, education and assistance.”

OSHA covers private sector workers, state and local government workers and federal government

workers. As employers, we have the responsibility to provide a safe workplace under OSHA. Employers

must provide their employees with a workplace that does not have serious hazards and follow all relevant

OSHA safety and health standards. Employers’ responsibilities include:

Inform employees about hazards through training, labels, alarms, color-coded systems and

chemical information sheets

Keep accurate records of word-related injuries and illnesses

Perform tests in the workplace, such as air sampling

Provide hearing exams or other medical tests required by OSHA standards

Post OSHA citations, injury and illness data, and the OSHA poster in the workplace where

workers will see them

Notify OSHA within 8 hours of a work place incident in which there is a death or when three or

more workers go to a hospital

Not discriminate or retaliate against a worker for using their rights under the law.

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OSHA standards are rules that describe the methods that employers must use to protect their

employees from hazards. Examples of OSHA standards include requirements to: provide fall protection,

prevent trenching cave ins, prevent some infectious diseases, assure that workers safely enter confined

spaces, prevent exposure to harmful substances, provide respirators or other safety equipment, and

provide training for certain dangerous jobs.

As employers, we must comply with the General Duty Clause of the OSH Act of 1970, which states that

each employer:

1. Shall furnish to each of his employees employment and a place of employment which are free

from recognized hazards that are causing or are likely to cause death or serious physical harm to

employees

2. Shall comply with occupational safety and health standards promulgated under this Act.

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This act also stipulates that each employee shall comply with occupational safety and health standards

and all rules, regulations, and orders issues pursuant to this Act which are applicable to his own actions

and conduct.

Building Codes

Regulations adopted by the North Carolina Building Code were effective from September 1st,

2011. The provisions of this code shall apply to the construction, alteration, movement, enlargement,

replacement, repair, equipment, use and occupancy, location, maintenance, removal and demolition of

every building or structure or any appurtenances connected or attached to such buildings or structures.

The purpose of this code is to establish the minimum requirements to safeguard the public health,

safety and general welfare through structural strength.

Chapter 9 of the North Carolina Building Code talks about Fire Protection Systems. It mentions

that “Fire protections system shall be installed, repaired, operated and maintained in accordance with this

code and the International Fire Code.” In addition, “no person shall remove or modify any fire protection

system installed or maintained under the provisions of this code or the International Fire Code without

approval by the building official.”

Chapter 13 of the North Carolina Building Code governs the design and construction of buildings

for energy efficiency. It states that “buildings shall be designed and constructed in accordance with the

International Energy Conservation Code.”

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Zoning

The zoning regulations of the Charlotte Area have been designed to promote the public health, safety and

general welfare. These regulations address the following public purposes:

Lessen congestion in the streets

Secure safety from fire, panic and other dangers

Promote health and the general welfare

Provide adequate light and air

Prevent the overcrowding of land

Avoid undue concentration of population

Facilitate the efficient and adequate provision of transportation, water, sewage, schools, parks and

other public facilities and services.

Zoning districts and maps have been made with due consideration of the character of the districts and

their peculiar suitability for particular uses of land and have been made with a view to preserving the

existing environment and/or assuring the development of a future environment that realizes the greatest

possible use and enjoyment of land on individual properties.

Section 1.103 of the Charlotte Zoning Code states that “these regulations govern the development and

use of all land and structures in the City of Charlotte.” Additionally, “no building, structure, or land shall

be used or occupied, and no building, structure, or part thereof shall be erected, constructed,

reconstructed, moved, enlarged, or structurally altered, unless in conformity with all the provisions of

these regulations for the district in which it is located and other applicable regulations, except as

otherwise provided by these regulations.” Obviously, we should follow these zoning laws.

Since we will be operating a fitness facility, we will be cooperating with the U.S. Department of

Health and Human Services (HHS). The mission of the HHS is to help provide the building blocks that

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Americans need to live healthy, successful lives. The HHS is the United States government’s principal

agency for protecting the health of all Americans and providing essential human services.

Market Data

Air Jordan Elite: Triangle Basketball Academy will be energetic, athletic, competitive, and

professional. The basketball academy will appeal to young athletes with ambitions of playing at the

collegiate level. Athletes will be attracted to the opportunity for youth development and college prep as a

basketball player. The various amenities offered with the basketball academy, in terms of facilities and

services, will attract athletes because it lays out the foundation and environment for what athletes

themselves are attracted to, success.

Additionally, the facility will appeal to other individuals of all ages who look to pursue

recreational and fitness opportunities. With the intention of having a multi-purpose and multi-revenue

producing facility, in addition to the basketball academy, the facility will be accessible as a convenient

and attractive location for recreation and fitness.

Market Strategies

The following marketing methods can be effective in making Air Jordan Elite: Triangle Basketball

Academy and the facility known to the community:

Email marketing – Costs for a professional program such as Constant Contact starts around

$30/month and go up depending on how many contacts you store in your database.

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Email is the engine behind any campaign: it drives your audience to your Facebook Page, event

registration, and more.

Email Marketing allows you to be all the places your customers are: email, social media, web,

mobile, and in-person. Using a professional service like Constant Contact with email marketing allows

you to track interactions with easy contact management, so the right people get the right message.

Search Engine Optimization/Website – It is a priority to have a search-engine-friendly web

site. Blogging or updating a news section on the academy/facility web site is a good way to

enhance the visibility of the business in search engines – the more keyword-targeted pages the

web site has, the greater the chances of showing up in online search results. This is a particularly

cost-effective way to market the enterprise, but is necessary to consider if we will hire a

professional or handle it internally.

Advertising and Sponsorships – It is important to know and understand the opportunities for

advertisement and sponsorships in the community. What are the influential media or

organizations in the area that will be noticed by our potential audience?

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Jordan Brand:

The Jordan brand is already popular in the community, especially as a major sponsor for

University of North Carolina at Chapel Hill (UNC) basketball. There is a great opportunity to acquire the

Jordan brand as a sponsor for the Triangle Basketball Academy because the brand is already well

established and supported in the community.

NIKE:

NIKE is an extremely popular global sport brand. NIKE is already established in the community

through the sponsorship of UNC and Duke University athletics. The brand is a major sponsor for

basketball in the area.

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Harris Teeter:

Harris Teeter is a major food supplier in the Triangle area. With the services that are provided with

Air Jordan Elite: Triangle Basketball Academy and the sport facility, we believe it is necessary to have a

grocery chain that supplies foods/healthy snacks to the facility. As a popular name in North Carolina,

Harris Teeter can also be a major asset in the enterprise’s advertising campaign.

Social Media – In today’s modern technology based society, social media has become vital for

the advertisement of business organizations. Facebook, Twitter, Google Plus, etc. have become a

major means of business recognition and support. The Triangle Basketball Academy has every

intention of taking full advantage of utilizing social media.

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Market Area

The distribution and location of establishments of this nature are highly correlated to population spread.

The more populated regions such as the Southeast, West, and Mid-Atlantic, tend to hold the greatest

numbers of athletic establishments. This is due to the fact that consumers will not travel excessive

distances in order to play sports or become a member of an indoor sports facility. The distribution of

population essentially determines the location of an indoor sports facility.

Durham County

Area Population Growth

2000

2009

2014

% Change

Durham County

223,314

262,824

286,649

9.05%

North Carolina

8,049,313

9,302,373

10,065,461

8.20%

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Wake County

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The market area for Air Jordan Elite: Triangle Basketball Academy will be focused in Durham

and Wake Counties of North Carolina. Additionally the market area will spill into the adjacent Orange

County. These counties will be the cores of our starting market area due to the increasing population

density among the area as displayed in the graphics.

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Market Segmentation

We have found that similar enterprises to Air Jordan: Triangle Basketball Academy that offer similar

services in terms of a sport facility have the following market segmentation:

The Triangle Basketball Academy will specifically be segmented to youth athletes from

approximately the ages of 11-18 years old. We anticipate the age segmentation for consumers of this age

range to be slightly higher than the average percentage for similar sport facilities.

Additionally, as a multi-purpose use facility for recreation and fitness, we anticipate the

percentages of age segmentation to be similar to the average for similar facilities for individuals 25 years

and over.

Customer Profile

First, it is essential to the success of our business that we acknowledge which qualities make up

our target market. There are a number of specific characteristics to take into account when determining

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our target market. Among the many characteristics that make up a target market, we have chosen ten

standards to establish an educated target market.

Age

Our target market age is primarily between 12-18 years old. Based on the data collected from the US

Census Bureau, ages 12-17 has by far the highest participation rate in basketball nationwide (27% of total

market). Our business will be located in Cary, NC, which is why we also conducted research regarding

age distribution in Cary, NC. After collecting data, the Town of Cary drew up a bar chart depicting the

overall age distribution within Cary.

We also have a wide age-range secondary target market. While our primary target market is in school, we

plan to use our indoor facility to its maximum capability.

With such an active target market, and a flexible secondary market, the possibilities for our business are

phenomenal.

Gender

Air Jordan Elite will extend our services to both male as well as female members. With coaches and

player-coaches of varying skill levels, we will be able to provide the necessary coaching for a broad range

of players both male and female. Based on the 2010 census data, Raleigh, North Carolina has 100:101

overall male to female ratio. With over half of the population in the Raleigh area being female, it is

imperative that we reach out to the female demographic. 6.6% of people living in the Raleigh area are

females between the age of 10-19. Similarly, 6.6% of the people living in the Raleigh area are males

between the ages of 10-19. Based on the Raleigh 2010 census data our target market for males and

females is exactly equal.

Size

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We will be providing services to people as young as six years old all the way up to elderly people. We

will limit our target market to those in the triangle area (Raleigh/Durham/Cary/Chapel Hill.) With

children’s basketball camps, aerobics classes, yoga classes, and beginner/intermediate/advanced weight

training classes, we will have a very broad target market. Based on the Raleigh 2010 data.

The graph shown above displays data presented by Bruce Kelley and Carl Carchia from espn.go.com

regarding youth team sport participation in 2013 nationwide. This graph clearly indicates that basketball

is by far the most popular team sport for children from ages 9-17 to play.

Pricing Trends

The pricing trends for basketball training facilities in the triangle area vary greatly depending on a

number of factors. First we must look at what is the main driver in our industry (customers, distributors,

or suppliers). As a basketball training and developing center for high school basketball players, Air

Jordan Elite’s pricing trends are primarily driven by the customers. Our service is not a necessity for life;

therefore we are reliant on our customers to choose to consume our service.

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Industry Data

1. Changing Customer Needs (increasing or decreasing)

a. based on a poll taken in 2012, triangle homeowners stated that improving and building

new indoor recreation facilities is on their top five list of ways to spend future funding in

the triangle area. Specifically indoor recreation is on the rise in the triangle area, which

will allow Air Jordan Elite to prosper in this highly demanded market.

2. Changing Demographics (number of children, recreational activities of family)

Household Types, 1990-2000

1990

2000

Number Percent Number Percent Total Households

91,947,410 100.00% 105,480,101 100.00%

Married Couple

50,708,322 55.15% 54,493,232 51.66% With Children*

23,494,726 25.55% 24,835,505 23.55%

Without Children*

27,213,596 29.60% 29,657,727 28.12% Female Householder, no spouse

10,666,043 11.60% 12,900,103 12.23%

With Children*

6,028,409 6.56% 7,561,874 7.17%

Without Children*

4,637,634 5.04% 5,338,229 5.06% Male Householder, no spouse

3,143,582 3.42% 4,394,012 4.17%

With Children*

1,354,540 1.47% 2,190,989 2.08% Without Children*

1,789,042 1.95% 2,203,023 2.09%

Non-Family Households

27,429,463 29.83% 33,692,754 31.94% Living Alone

22,580,420 24.56% 27,230,075 25.82%

Two or More Persons

4,849,043 5.27% 6,462,679 6.13%

*In this table, children are people under age 18.

Based on the chart above, there are an increasing number of married couples with children, single

females with children, and single males with children in the greater Raleigh area.

-Combined with the previously stated growing demand for indoor recreation facilities in the

triangle area, Air Jordan Elite is targeting a growing demographic in the triangle area

Revenue

($m) IVA ($m)

Establishments (Units)

Enterprises (Units)

Employment (Units)

Exports ($m)

Imports ($m)

Wages ($m)

Domestic

Demand ($m)

Participation

in sports (%)

2003 790.3 525.7 3,470 3,365 20,304 - - 467.3 - 17 2004 795.7 543.6 3,594 3,486 21,397 - - 484.7 - 18 2005 789.6 555.5 3,684 3,569 21,774 - - 495.4 - 17 2006 769.0 571.0 3,703 3,591 22,949 - - 507.9 - 17 2007 776.5 596.7 3,901 3,774 23,818 - - 533.0 - 19 2008 745.4 572.5 3,797 3,675 23,409 - - 510.6 - 18 2009 743.6 555.8 3,827 3,709 23,409 - - 502.3 - 18 2010 758.2 560.5 3,927 3,803 24,069 - - 517.3 - 19 2011 768.6 577.9 4,042 3,876 24,806 - - 523.3 - 19 2012 780.4 586.8 4,164 3,963 25,515 - - 531.4 - 19 2013 792.9 596.6 4,277 4,066 25,838 - - 540.3 - 19 2014 811.9 610.8 4,403 4,177 26,647 - - 553.2 - 19 2015 823.3 620.6 4,489 4,256 27,205 - - 561.3 - 19 2016 843.1 634.5 4,625 4,381 27,755 - - 573.0 - 19 2017 861.6 651.0 4,724 4,470 28,349 - - 587.2 - 19

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3. Technology (alternative access to the product or service)

-Unlike many other current products, it is impossible for technology to replace Air Jordan Elite’s

service. Our face-to-face physical practice and play make it impossible for technology to take

over our business.

4. Pricing (increase or decrease in competitor’s price of same product)

-Air Jordan Elite will profit greatest by charging 10% higher than our competitors

-Elite Sports Network of Cary charges 99.99 per 3 month season. With instruction from a former

DII basketball player, this is a fair price to charge for his services.

-In recent years, the YMCA has provided “open-gym” for basketball players from ages 13-19. In

order to participate in this open gym you must be a member of the YMCA. The membership fee

for a young adult in the triangle is $108 for 3 months. Since 2008 the membership fee for young

adults has been raised $30 per 3 months. This is an indication that the triangle area residents will

pay more for exercise facility memberships.

-The IHRSA claims that in a poll done in 2012, 31% of the Y’s surveyed did not offer any

membership discount to at-need members.

-There are a number of factors that Air Jordan Elite looked at when determining our participation

fees.

1) Basketball has recently been named the most popular sport for youth participation

2) Air Jordan Elite will provide seasoned basketball players with DI experience to coach

our members

3) We will provide 8 full size basketball courts allowing for optimal court time for every

member

4) Air Jordan Elite will provide scheduled payment plans for financially at-need

members.

5) We will have state-of-the-art equipment

6) Skilled and trained medical staff will be provided for injuries or medical emergencies.

7) Air Jordan Elite is a new and exciting business in the Triangle area.

Air Jordan Elite will charge 10% higher than our competitors as we will be providing top of the

line services in a brand new facility.

-These graphs displayed below, provided by the Wall Street Journal, indicate trends in youth

sports participation. Basketball has the highest participation in regards to youth sports. While

basketball has the highest participation for youth kids in America, as a whole there is an increase

in youth who engage in no physical activity.

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Competitors

Air Jordan Elite provides a unique service. Our competitive nature is what sets Air Jordan Elite

apart from our nearest competitors. We will be training the elite basketball players of the triangle area

from ages 11-18. Our nearest competitors are the YMCA basketball league of Raleigh, AAU basketball

league of Raleigh, Elite Sports Network Basketball league, as well as local community indoor basketball

facilities. Air Jordan Elite’s fundamental principle is to sharpen the skills of each player in our program

by facing them off against the fiercest competition in the triangle area.

When analyzing our target market it is essential that we take into consideration all types of

recreational facilities in the Triangle Area. Below is a list of community centers, the acres, and all of the

recreational facilities that each center provides. This data was provided by the Raleigh Department of City

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Planning. After careful review of each of these recreational centers in the Triangle Area, there is no

question that Air Jordan Elite will provide the Triangle Community with vastly unique opportunities. Our

indoor weight/workout facility, yoga studio, study/work center, and state-of-the-art basketball courts will

set our business apart from all others in the area.

Name of Park, Acres: List of Recreational Facilities

Chavis Community 28.87: Gymnasium and community center, lighted ball field, tennis courts,

pool, play equipment, picnic shelters, greenway trail, walking track, multipurpose field, historic

carousel, handicap accessible

Green Road Community 26.67: Gymnasium, community center, lighted ball field, outdoor

basketball, sand volleyball, tennis courts, Wake County branch library, handicap accessible

Halifax Community 4.62: Gymnasium, ball field, multipurpose field, play equipment, outdoor

basketball

Horseshoe,Farm Community 146.27:Under development, nature and environmental center

planned, informal open space available

Jaycee Community 24.87: Gymnasium and community center, lighted ball field, tennis courts,

play equipment, exercise trail, picnic shelter, sand volleyball, gardens, handicap accessible

Lake Lynn Community 51.99: Gymnasium, lighted ball field and tennis courts, greenway trail

access, playground,, handicap accessible

Laurel Hills Community 48.30-Gymnasiums and community center, lighted ball fields, play

equipment, outdoor basketball, multipurpose field, pond, handicap accessible

Leesville Community 55.15- Under development, Wake County branch library

Lions Community 41.41-Gymnasium and community center, lighted ball fields, tennis courts,

play equipment, outdoor basketball, picnic shelter, BMX track, handicap accessible

Marsh Creek Community 110.61- Illuminated ball field, picnic shelter, inline skating,

gymnasium, community center

Milburnie Park Community 88.38- Undeveloped, Neuse River canoe launch

Millbrook Exchange Community 69.35- Gymnasium and community center, lighted ball fields,

tennis courts and pro center, pool, play equipment, outdoor basketball, exercise trail, picnic

shelter, off-leash dog area, handicap accessible

Optimist Community 30.72: Gymnasium and community center, lighted ball fields, tennis courts,

pool, play equipment, greenway trail, handicap accessible

Sydnor M. White Community 64.45: Undeveloped

Watkins Road Community 38.28:Undeveloped

Worthdale Community 36.14: Gymnasium, community center, ball fields, tennis courts, play

equipment, handicap accessible

Buffaloe Road Metro 165.58: Lighted ball fields, play equipment, running track, Athletic football

field, wetland trail

Durant Nature Metro 241.15: Play equipment, nature study, picnic shelter, trails, lake, fishing,

overnight lodge, meeting and rental lodge, handicap accessible

Lake Johnson Metro 471.97: Picnic shelter, greenway trail, lake, boat rental, fishing, waterfront

conference and concession center, handicap accessible

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Lake Wheeler Metro 868.78: Play equipment, exercise trail, picnic shelters, lake, boat rental,

fishing, waterfront conference and concession center

Pullen Metro 68.50: Arts center, community theater, year-round aquatic center, amusement area

with train, boat rides, historic carousel, community center, picnic shelters, tennis, trains,

greenway access, handicap accessible

Shelley Lake Metro 144.81: Sertoma Arts Center, Play equipment, outdoor basketball, exercise

trail,

greenway trail, lake, boat rental, fishing

Walnut Creek North Metro 104.84: Nine field softball complex

Walnut Creek South Metro 204.71: Outdoor amphitheater concert venue

Apollo Heights Neighborhood 4.26: Neighborhood center, playground, greenway access

Brentwood Neighborhood 16.07: Ball field, neighborhood center

Brookhaven Neighborhood 25.91:Nature study, trails, handicap accessible

Cedar Hills Neighborhood 38.49: Lighted ball field, tennis courts, play equipment, trails, outdoor

basketball, disc golf, picnic shelter, handicap accessible

Chamberlain Neighborhood 1.44: Play equipment, basketball court

Charlotte H Green Neighborhood 1.02: Open space

Drewry Hills #2 Neighborhood 18.52: Open space

Eastgate Neighborhood 25.27: Tennis courts, play equipment, neighborhood center, ball field,

handicap accessible

Eliza Pool Neighborhood 6.23: Walking trail, greenway access, picnic shelter, playground,

multipurpose field.

Fallon Neighborhood 10.33: Open space

Fred Fletcher Neighborhood 21.36: Historic building/meeting space, ball field, trails, tennis, play

equipment, informal open space, multipurpose field, gardens

Glen Eden Neighborhood 20.41: Tennis courts, picnic shelter, neighborhood center, playground,

handicap accessible

YMCA Basketball League of Raleigh

Summary of League: “Our youth basketball leagues are a great way for your kids to fine-tune

their skills, practice good sportsmanship and have fun. This recreational basketball league emphasizes

skill development, character development and fun.”

The YMCA’s league summary includes character development and fun as core principles of their

business. The YMCA simply does not possess the same competitive edge that is the foundation

of Air Jordan Elite.

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Elite Sports Network of Cary

There are a number of similarities between Elite Sports Network and Air Jordan Elite. The most

obvious similarity is the competitive atmosphere in both training programs. Another similarity is the

variety of practices, camps, and competition to choose from. Elite Sports Network is a year-round

program divided into four 3-month seasons. There is a flat rate cost of 99.99 for each 3-month season and

for all ages.

The main difference between Elite Sports Network and Air Jordan Elite is the coaching staff and

the overall goal. Air Jordan Elite’s volunteer coaches from some of the nation’s best Division I basketball

programs will separate it from Elite Sports Network. Elite Sports Network’s head coach, Ryan Kimball,

was a Division II basketball player in Vermont. While Kimball is a good basketball coach, he simply does

not possess the Elite level of instruction that Air Jordan Elite will provide through our numerous Division

1 player instruction.

Furthermore, Air Jordan Elite’s overall goal as a feeder program for NC State, UNC, and Duke

Basketball programs sets it apart from Elite Sports Network. While the goal of Elite Sports Network is to

develop young player’s skills, there is not a specific goal beyond that.

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Sales Projections

It is vital to our business' success that we carefully study the sales projections that our basketball

facility entails. I compared the basketball figures to that of soccer participation because soccer is a multi-

gender team sport that can be played at all ages. Due to these similarities, we choose to display statistics

on soccer participation in comparison to basketball. The US Census Bureau collected data in 2009 from

10,000 US homeowners which sport they participated in most. The participants must have been at least 7

years old and played the sport for over a year. Based on the US Census Bureau survey, we have

concluded that

Based off of the US Census Bureau’s Data Collection of Sport Participation among Americans, we have

pulled out the most valuable information to help predict the sales projections of our business.

Management Analysis

Mission Statement

Our mission is to help every student athlete we train realize his or her full potential athletically,

academically, at work and within life itself.

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Short Term Goals

1. Build a facility which can house multiple basketball courts, study rooms, weight and training

areas, and other needed areas to effectively prepare youth athletes for college basketball.

2. Find sponsors that can help fund and provide assets so that we can create an atmosphere that

helps student athletes.

3. Partner with local middle and high schools so that athletes within their program will have a place

to train for the next level.

4. Partner with local colleges and the Charlotte Hornets to bring in players or other assets to help

run camps and training.

5. Partner with leagues such as the American Athletic Union and other showcase basketball leagues

to have tournaments and leagues at our facility.

6. Create a sustainable customer base that includes male and female youth as well as seniors and

other adults to be involved with all of our programs.

Long Term Goals

1. Create a facility that is one of the best in the country at training youth basketball players and

getting a high percentage into a college program.

2. Partner with more schools, colleges, and sponsors to effectively get the most players and most

assets available.

3. Create a community like atmosphere where youth and adults all feel comfortable with our staff

and programs.

4. Create a facility similar to IMG Academies where players from all over the nation and world

come to get the best training for playing at the next level.

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Performance Indicators

Key Performance Indicators (KPI) help an organization define and measure progress toward

organizational goals. Once an organization has analyzed its mission, identified all its stakeholders, and

defined its goals, it needs a way to measure progress toward those goals. Key Performance Indicators are

those measurements. KPIs need to be quantifiable, so that there is no ambiguity as to whether the

organization is reaching its goals. An example of performance indicator is cost of service. Cost of service

measures the cost of the provided service. This can be done by dividing the total cost of staffing and

infrastructure by the number of transactions. We could then see if we are functioning at a good rhythm.

Another key performance indicator is the percentage of satisfied customers. This could be done by having

regular surveys for our clients. Client feedback is vital for an organization, as customers are the ones we

are trying to please. We have to consider their opinion above everything. In order to motivate clients to

give feedback, we could tell them that when they do their online survey, they can win a prize. Examples

of prizes could be material goods like a training bag or training clothes or it could only be a reduction in

the membership payment.

According to the California Digital Library, there are six (6) steps to get started with key performance

indicators:

1. Ensure the team knows and understands the KPIs.

2. Determine which indicators are important. Establish the most important KPIs right at the start so

that people stay on the same page and know the organization’s priorities.

3. Assess which data elements can be collected easily. Some data might be collected easier. The

number of transactions can be obtained in an easier way than clients’ satisfaction.

4. Express the KPIs as formulas. This makes it easier to assess the organization’s performance.

5. Create a simple dashboard. This can be in the form of a white board in the facilities’ headquarters

or as an excel Google doc. It makes it easier for employees to follow the organization’s progress.

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6. Discuss the result. Every month, there should be a staff meeting where we would assess whether

we are on the right track to reach the company’s goals. This makes sure that everyone is on the

same page.

According to clubindustry.com, there are some metrics that we should be aware as sport facilities’

managers. The metrics that have the closest statistical relationship to retention include:

Member usage. This one is obvious. The more frequently that members use the club, the more

likely they are to remain members.

Early stage usage. Research shows that frequency of usage during the first 90 to 120 days of

membership is closely correlated with retention, both during the first few months and after more

than one year.

Member satisfaction. Data shows that the higher a club’s “net promoter score” (percentage of

members who rate you as a five on a five-point scale, minus those who rate you a one, two or

three) the better a club’s membership retention levels are.

Additional services revenue per member. The more money a member spends in a club, especially

during the first 90 to 120 days of membership, the more likely they are to remain a member.

Other mathematical metrics can be used to assess the facility’s performance. These metrics can be easily

calculated and communicated.

Percentage of membership using the club daily. Management should understand that a percentage

of the total membership visits the club daily. The higher the percentage of daily visits, the more

engaged the membership is. A good number to shoot for is above 25 percent.

Percentage of members using additional services like yoga classes or a personal trainer. The

higher this percentage is, the more engaged the membership is. Although the percentages partially

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depend on the club’s business model, achieving greater than 20 percent penetration will positively

affect retention.

Percentage of members who use the club less than four times per month and more than eight

times per month. These two variables have the most reliable relationship to retention. If we can

decrease the percentage of members who use the club less than four times per month and increase

the percentage of members who use the club at least eight times per month, we will positively

influence retention over the long haul.

We should include a break-even analysis. A break-even point is defined as “the point in time where

the company starts making a profit.”

We could also evaluate our employee’s performance. Employees could be subject to monthly

evaluation to make sure that they know what to improve on. Every time an employee would do something

wrong, a note would be added to that employee’s file so that we can implement measures to improve his

or her performance.

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Timeline for Implementation

This facility will take at least two years to build. As we said earlier, we will want to attract

customers during the building phase, so that they will come once the facility opens.

During the implementation phase, it will be important to follow the progression of our facility.

We will have to be alert to detect any possible issue, so that the issue doesn’t become too big of a problem

over time.

For example, if we start the process in May of 2014, the facility would be finished in May of

2016. During the last building year, we will start marketing campaigns.

Plan Assumptions

As most census show, the population in Raleigh is increasing. We assume that this trend will

continue. We also take for granted that old people will still spend on recreational opportunities and that

young athletes are going to be willing to spend money to improve their abilities. We have to make these

assumptions in order to move forward. There can be variation within these trends, but as long as there no

drastic changes we will be fine. We believe that there will be no sudden changes in these vital trends, as

they have been expected for a long time now.

Strengths

Air Jordan Elite is going to have many strengths. The first strength is that we will cater to elite

players that want to play division 1 basketball. This is better than other basketball facilities in the area

because they take all players and the competition is not nearly as good. Another strength is that North

Carolina has three universities that have historically been “basketball schools” and has a huge following

for the sport. With Wake county continuing to grow more and more players will be in the area in the

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upcoming years. The last strength is that with a huge gym we can use it for much more than a basketball

facility creating more revenue for our business.

Weaknesses

The process of analyzing the weaknesses of our business includes determining the internal

downfalls that our business possesses. Our business plan contains only a few distinct weaknesses. One

Air Jordan Elite’s primary downfall deals with our target market. As we do not discriminate against lower

income families, we will be challenged by dealing with skilled players who simply cannot afford our

services. Air Jordan Elite has come up with ways to combat this dilemma, but problems will still arise.

Solutions

Payment plans for families who cannot afford our services by using monthly payments with low

or no interest.

Providing players with part time jobs to reduce the cost of their payments; Such as cleaning

floors/facility, coaching younger players, and helping run camps.

Risk Analysis

As a start-up business, it is vital that we analyze the potential risks we could face.

1) Facility Location

a. A main concern for a start-up business like Air Jordan Elite is whether our facility

location will allow for optimal clientele participation. Being in a centrally located area

near Raleigh, Cary, Durham, and Chapel Hill will provide opportunity for a broad

customer base. Air Jordan Elite will also be located very close to Interstate 540. This will

allow for very easy access for commuting clientele.

2) Licensing and City/State Codes

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a. Another main concern we must face as a start-up business is making sure that we obtain

the appropriate licenses and follow proper City/State codes. We will work together with

the City Planning Department of Raleigh to ensure that our building is up to standard for

all city/state codes as well as OSHA laws and regulations. It is important that we hire

skilled consultants to ensure that we are up to code on all aspects of the start-up process.

b. We will also have to obtain all proper licenses and permits to build and facilitate a

basketball training business in Raleigh.

c. We must have a flawless relationship with our architectures and head of construction. It

is important that we are prepared for mistakes to happen and how to deal with any

potential mistakes or setbacks.

3) Start-up Costs

a. As a new business, one of our largest concerns is whether we will have the necessary

funds to run a smooth operation. Our main sponsors will include Air Jordan and Harris

Teeter. By advertising these companies on our buildings, inside our gyms, in the title of

our company, on our website, and on our equipment, we will be promoting these

respective companies. In return we will accept financial assistance to assist in Air Jordan

Elite’s start-up process.

4) Building up and keeping clientele

a. Our greatest promotional tactic to build and maintain a strong clientele base is in our elite

coaching staff and dozens of Division I volunteer assistants. We plan to make it very

clear to potential clientele that there is no other training facility in the Triangle area that

has such a broad spectrum of talented staff to learn from. When it comes down to it, our

potential clientele are looking for a cost-efficient place to best learn the game of

basketball. Simply put, Air Jordan Elite is the obvious answer.

5) Finding and keeping quality staff

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a. What sets Air Jordan Elite apart from our competitors is our unique coaching style. We

will have 5 full time coaches. All of our coaches are former players of NC State, UNC,

and Duke. Our weekly scheduled volunteer coaches (NC State, Duke, UNC basketball

players) will expose our clientele to many different styles of play. We plan on providing

our 5 full time coaches with a reasonable income, as well as being a feeder program for

their respective university basketball programs.

6) Managing a quality program

a. We have set up an in-depth organizational structure. Every position on our staff will have

specific weekly tasks and will be worked very hard. Unique to many other businesses, we

will give clientele (above the age of 12) the opportunity to work in return for lower

service fees. This work will consist of easy daily tasks such as; cleaning floors/facility,

coaching younger players, and helping run camps. Through this unique process we will

save a great deal of time and help us better manage our program.

Action Steps

Step 1

Date of Plan Initiation: February 1st, 2014

We first came up with the name of our business. Our business will be named “Air Jordan Elite Triangle

Basketball Academy”. We are an elite basketball training academy of the Triangle area planned to

provide a high talent level of basketball going toe-to-toe each day that will maximize potential for player

development. Iron sharpens iron!”

Step 2

Overall Business Goals

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a) Provide a feeder program for NC State, Duke, and UNC Basketball Programs

b) Provide an environment for young players to develop and grow in the sport of basketball and as

people

c) Build a strong clientele base to promote other areas of Air Jordan Elite (weight training, yoga,

aerobics, and palates)

d) Expand our organizational structure and our business as a whole by hiring more staff as we build

more financial capital

Step 3

Ways to attain business goals

a) Building relationships with coaches, alumni, players, and fans of NC State, Duke, and UNC

Basketball Programs

b) Hiring friendly, relatable coaches who are eager to work with young players

c) Having a easily accessible website, billboards, fliers, signs, posters, and promotional events to get

our name out there

d) Following through with steps A-C and building customer loyalty

Step 4

Start and End Date

Air Jordan Elite will officially begin on June 14th 2014

Through our thorough risk analysis, we will prevent any long term setbacks

Air Jordan Elite is planned to be up and running on December 14th 2015

Step 5

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Expenditures

a) Hiring costs of coaches and promotional events to raise awareness of our feeder program to these

schools

b) Planning, construction, maintenance costs of our facility

c) Cost of making a running a website, billboard costs, printing of fliers, signs, posters, and hosting

promotional events

d) Any other costs involved in the start-up of Air Jordan Elite

Management Plan

Organizational Structure

CEO

Director of Athletics

Program Director

Coaching Staff

Camp Counselors

Trainers

CFO Director of Sales and Marketing

Community Relations

Sales Associate

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Allocation of Human Resources

Even though we are expecting to have large facility and continue growing we don’t expect to

have many employees. We would need a Chief Executive Officer to control the entire business and make

sure everything is running smoothly. Under the CEO would need a Director of Athletics, a Chief

Financial Officer, and a Director of Sales and Marketing to handle the rest of the staff. The Director of

Athletics would be in charge of scheduling and setting up everything dealing with the sports side of our

business. Under them would be program directors, coaching staff, trainers, and camp counselors that

would run all the camps, leagues, and other events our facility. We expect the camp counselors to be

college or pro players for the high school camps and then we expect we can use some of the older kids

that use our facility to be counselors at younger kid’s camps. The CFO would be in charge of all the

financial side of our facility so that we can maximize our profit. The Director of Sales and Marketing

would be in charge of promoting Air Jordan Elite and getting members. Under them we will have

someone in a community relations role that will be in charge of promoting and making sure that Air

Jordan Elite looks good to the outside. Lastly we will have Sales Associates that can coordinate our sales

and sponsorships.

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