Executive Summary (1 ½ Pages)

In Kentucky, there is an alarming trend in terms of the growing number of obese and overweight

individuals. Currently 67% of all adults in Kentucky are overweight or obese, and 58% of these

people have a desire to lose weight (citation). This creates a need in Kentucky for a new kind of

fitness center, where healthy living is at the core of its mission. Further Than Fitness, a lifestyle

changing fitness center, is committed to the overall health and wellness of its members. This

healthy living fitness facility is designed allowing clients to train in an atmosphere that is most

conducive to their comfort and state of mind. This center is designed to take people from all

different lifestyles and body types and provide avenues for transforming their mind, body, and

spirit. Further Than Fitness differentiates itself by offering a 24-hour fitness center, a convenient

fresh food eatery, Lifestyle Advisors and accountability structure called “Transformations” that

is based on an accountability measures and behavior modification classes.

The Lifestyle Advisors provide the knowledge and support for the formation of a healthy

lifestyle plan, including obtainable fitness goals, nutrition and meal planning and accountability

matrices. Lifestyle Advisors are nutritionists, motivational coaches, and trainers. These advisors

work one on one with each client to ensure clients’ needs and objectives are met. In reference to

the Transformations program, the advisors will use the “buddy system” along with other

documented methods to hold each client accountable in obtaining their established goals. The

fresh food eatery consists of a food bar with scales for proportioning individual meals and a

small dining area where nutritional value placards will be displayed.

Additional amenities include a childcare facility, locker room areas, nutrition and behavior

modification classes, as well as various levels of fitness classes. Also, there will be three

different areas for exercising that cater to beginner, intermediate, and advanced levels of training.

1

These areas are separate from each other in order to create a comfortable and pleasant

atmosphere for each individual at any fitness level.

Further Than Fitness will be strategically located in the Prospect, Kentucky area because of the

high-income levels, population density, and high rate of population growth. With the growth of

the surrounding area, there is also room for expansion. Phase plans have been determined to

expand our facility over the course of the next few years.

Venture Overview (Page)

It is a well-known fact that a healthy lifestyle requires some form of cardio exercise at least 30

minutes a day, along with a healthy diet. The vision of Further Than Fitness is to help transform

an individual’s mind, body, and spirit into a well-rounded lifestyle through efficient and effective

exercise, with on-going support and guidance.

A large portion of Kentucky’s population is overweight, which has been linked to diseases such

as diabetes and heart disease. Recent awareness of this fact has many people looking for new

and innovative ways to improve their fitness and overall health. Fitness is a $17.6 billion

industry that has doubled in size in the last ten years, with over 23,500 health clubs in the

United States, a number that is growing each and everyday. (We need Kentucky stats

here- size of market and industry in Kentucky for gyms).

Even with the current slumping economic conditions, according to an informal survey conducted

by our marketing research team, 83% of Kentuckians surveyed do not feel they will need to

sacrifice their gym memberships.

The mission of Further Than Fitness is to positively transform the mind, body, and spirit of each

member by providing a welcoming environment in which all aspects of a healthy lifestyle are

incorporated. The positive reinforcement from our Lifestyle Advisors will directly address the

2

spirit of each member by concentrating on their drive and motivation. Members will accomplish

this transformation by utilizing the fresh food eatery, Lifestyle Advisors, and cutting-edge

equipment. The objectives of Further Than Fitness are to be profitable by year three, to have a

60% membership renewal rate after year one, and to grow new memberships by 5% each year.

Products and Services (4 Pages)

Further Than Fitness will have a distinct competitive advantage by bringing together three

components of a healthy lifestyle: food, exercise, and support.

The product offering will consist of a high quality fitness facility that caters to all levels of

training. This includes the Transformations Program that facilitates behavioral modifications

and a support structure encouraging member attendance. The fresh food eatery will conveniently

offer fresh snacks and meals for members and outside customers to meet nutritional goals.

Lifestyle Advisors

Studies led by the Harvard School of Public Health and the Pennington Biomedical Research

Center have concluded that dieters who received regular counseling showed better results than

those who did not. The average person lost 22 pounds, compared to 9 pounds lost by those who

did not attend support group meetings (Feb 26th, 2009). The purpose of Lifestyle Advisors is to

provide members with support and guidance on their way to a healthy lifestyle. Lifestyle

Advisors will offer a free evaluation of new members to assess the individual’s need for support

and behavior modification. Lifestyle advisors will host weekly group sessions for members of

the Transformations Program. Lifestyle Advisors will help guide individuals by teaching

members about nutrition and exercise. The Lifestyle Advisors will also put together a meal plan

that will be tailored to the needs of each member in order to simplify nutritional decisions.

3

Fresh Food Eatery

Members can then take their meal plan to the fresh food bar, and have healthy meals

conveniently prepared for them. Members and outside customers will have access to healthy

food for each meal of the day. This will benefit members by eliminating the guesswork of which

foods to eat. The fresh food bar will also be open to the general public who are busy and do not

have the time to put together a nutritious meal. Meals can be prepared for individuals, as well as

for families for those parents who are concerned about the food that their children are eating.

Customers can be confident the food will be convenient and nutritious.

Transformation Program

The system will hold each client accountable for his or her own progress through the

Transformations Program. One of the major distinctions between Further Than Fitness and

competitors is the Transformations Program. This program will provide support for members,

allowing them to interact with other members aimed at reaching similar goals. Support groups

will meet once a week with members of the same fitness level in order to foster a comfortable

environment. A buddy system will also be created within these groups so members can exercise

together and encourage each other to achieve similar goals. Each client will have the opportunity

to be accountable for his or her own progress through constant contact with Lifestyle Advisors.

Clients will have the option of entering into a support contract. These contracts will state the

number of times per week the client must attend the facility to continue their progression. If the

client does not show up on their scheduled date, an e-mail will be sent encouraging them to

attend. After three failed attempts to contact the member through e-mail, we will contact them

by telephone. We will emphasize positive reinforcement when we try to contact our members so

4

that they feel encouraged. Our intentions are not to overwhelm our clients but hold them

accountable per their goal setting contract agreed upon during their enrollment.

Training Areas

Further Than Fitness is taking the gym atmosphere in a new direction. In addition to the regular

equipment that members expect, we will offer training programs that cater to all individuals and

intend on expanding in the future to include an indoor pool. Our research has shown that the two

closest indoor pools are over 10 miles away and that there is a large demographic for potential

swim teams to rent out our lanes. The gym will consist of three separate workout areas offering

equipment for different training levels. These areas will provide each member with equipment

and an atmosphere they require to meet their demands. The different areas consist of:

Beginners:

This area is characterized by a calm and un-intimidating environment to provide its users

with a sense of comfort, intimacy and confidence. The machines and cardio equipment

will have specific instructions for effective use; with the guidance of personal trainers,

members with minimal experience will have the tools necessary to accomplish their

goals. Members will be able to attend specific classes offered in the group class area.

Classes include yoga, aerobics, step, zumba, and spinning.

Intermediate:

This area of the fitness center will provide more confident and experienced members with

an environment in which to thrive. Individuals seeking more traditional equipment will

find free weights and heavy resistance machines. Members in this area can take

advantage of group fitness classes and an area with a larger quantity of cardio equipment.

5

Advanced:

This area focuses on the high intensity workout needs of professional fighters such as

boxers, kick boxers, and mixed martial artists due to the current trend of professional

fighting’s popularity. Martial artists and advanced athletes will be able to perform their

necessary trainings; however other members can take advantage of the unique equipment

and the high intensity classes offered in this area. A padded section will be provided for

ground workouts and for grappling fighting styles such as Ju Jitsu and wrestling. To

facilitate boxing and kickboxing style workouts ten heavy bags are located in a rubber

matted section. The hardwood floor will allow for training that requires open floor space

for example sprinting, jump roping, cone drills and many other workouts.

Memberships

Membership A allows for the member to pay for a year membership up front costing $350.

Membership B is a year contract membership with monthly payments costing $35 a month,

totaling $420 a year. Lastly, Membership C is a month-to-month membership with no contract

costing $45 a month, totaling $540 a year. It is apparent that long-term savings for the member

can be obtained by purchasing the more cost efficient membership. Competitive pricing and the

unique offerings of Further Than Fitness will leave few reasons for members to desire an

alternative facility. On the other hand, switching cost is one way that fitness centers attempt to

deplete members bargaining power. Nearly all gyms write into their contracts termination fees.

These fees are a way for gyms to keep existing members from breaking their contracts. The fees

can either be a large one-time fee somewhere around 50% of the current contract, or a buyout of

the remaining current contract.

6

Intellectual Property (Couple Paragraphs)

Further Than Fitness will have intellectual property in the form of a registered trademark for

both the name, specialized programs and company symbol. The name will be registered in order

to protect it under federal and international law. Specifically the Transformations accountability

structure will need to be protected to secure competitive advantage.

Industry/Market Analysis (5 Pages)

Target Market/Member Profile

The target market for this venture are health-conscious consumers who wish to not only improve

their physical fitness through exercise, but also improve their overall way of life through healthy

food choices and a program that holds them accountable. Baby Boomers, ages 45-64, represent

28% of the US population; therefore, they are a highly targeted market. However, because

Further Than Fitness is aware that there are other health-conscious consumers in the market, ages

ranging from 18-65 will also be included as part of the overall target market.

Key Characteristics and Needs

Prospect, Kentucky has a current population of 11,000 people, with a steadily growing

community. The current highest populace is within the 45-60 age range, with a median age of

41-42. Of the total Prospect population, 82.6% are family households with a disposable median

income of $96,836. The need for Further Than Fitness and its programs is offered with the

convenience of location. Prospect, Kentucky holds many opportunities because of its growing

community and lack of direct competition within reasonable driving range for consumers of the

fitness industry.

7

Further Than Fitness is located just outside of the Louisville area, the correlation of these

numbers with the Prospect market show that there is a demand for a healthy living center that

can give targeted consumers a convenient location to exercise.

Industry Growth Trends

Trends in fitness centers tend to fluctuate based on health trends in the communities they serve.

According to the CDC (Centers for Disease Control and Prevention) obesity is the fastest

growing health problem in the United States. Kentucky’s population of overweight or obese

adults totals 67%, making them seventh for the highest obesity rate in the nation. According to

the CDC, 42.4% of adults in Louisville, KY are at risk for weight related health problems due to

being over weight. This is the worst score for any city in the CDC survey, with the national

average being 36.09%. This creates a need in Kentucky for a new kind of fitness center, where

healthy living is at the core of its mission.

The total Louisville population in 2007 was 696,918 and projected to be 702,040 in 2010. 

Currently households in Louisville that diet or practice weight control is 170,112 with the

median age being 50; households in Louisville that eat healthy is 134,507 with the median age

being 51.8; households in Louisville that exercise is 222,860 with the median age being 48.7;

households in Louisville that run or jog is 77,144 with the median age being 48.7; households in

Louisville that exercise by walking is 226,156, median age being 55.3; households in Louisville

that bicycle frequently is 103,518 and median age being 47.9. Since the highest population in

Prospect is 45-60, there is a direct correlation between the median ages in Louisville and

Prospect that maintain healthy lifestyles.  

8

According to IHRSA (the premier health club industry association), health club memberships are

projected to reach 50 million by 2010, representing a 25% growth rate from current levels.

Research firm Ibis World, a firm that provides high-quality industry market research analysis

reports and publications, lists health and fitness clubs number five among the most likely

industry to experience growth rate in 2009 and beyond. The growth of fitness facilities is

expected to be 2.2% over the next year due to rising health care costs. A Blue Cross and Blue

Shield Foundation on Healthcare study found that more than 50% of health-insurance plans

offer discounts or reimbursements for gym memberships, including large insurers such as

Humana, Blue Cross and Blue Shield, Aetna, and Cigna. The National Business Group on Health

that represents 214 large employers, about 45 million U.S. workers, found in a recent poll, that

79% of corporations and companies will offer fitness incentive programs in 2009.

Nationwide, people in the 45-55 age range have 9.9 million gym memberships. Lobbyists are

pushing for legislation in the industry that may produce growth. The Personal Health Investment

Today (PHIT) Act would allow people to pay for exercise and physical fitness programs, some

exercise equipment and kid’s sports leagues with pre-tax dollars through their Flexible Spending

Account (FSA) or Health Savings Account (HAS). The Workforce Health Improvement

9

Program (WHIP) Act promotes wellness in the workforce by allowing off-site memberships to

be tax-free benefits to employees. Current law allows businesses to outsource this health benefit;

however employees are required to pay income tax on it.

Market Acceptance

The 50 largest fitness centers in the United States hold approximately 30% of the market share.

In 2008, the number one company listed by revenues of $1.8 million, was 24 Hour Fitness

Worldwide, Inc. There are approximately 60 fitness centers in the Louisville, KY market. Our

direct market encompasses the zip code 40059. There are four fitness centers in this specific zip

code, and in surrounding areas, there are eight fitness centers. The number one company by

memberships in the Louisville area is the YMCA with 53,750 members. They currently have

two locations within 30 miles of our proposed location. This will not be an issue for Further

Than Fitness because, according to Danny Walker, the bulk of the membership market is drawn

from a 5-7 mile radius from our location. Our location will be at least 10 miles from the nearest

fitness center. An informal survey conducted by the Further Than Fitness marketing research

team showed that people preferred to have healthy food options and advanced training

equipment that are offered exclusively by Further Than Fitness. This confirms the need for

Further Than Fitness, which encompasses both aspects.

Competitor Analysis

Studies show that location and accessibility are the most important factors for consumers

choosing a fitness center. Purchasing a fitness center membership requires both a financial

commitment and a time commitment. People with limited free time are less motivated to

commute long distances to reach a fitness facility; therefore strategic location of Further Than

10

Fitness is paramount. Our top competition includes the YMCA, Urban Active, and Snap Fitness.

The following chart compares products and services of Further Than Fitness and its competitors.

For Further Than Fitness, the threat of smaller less expensive centers, like Snap Fitness, is high.

Since larger gyms must charge higher membership fees in order to pay for marketing, employee,

and maintenance costs, they must have a creative marketing scheme and offer somewhat

differentiated products and services to their members. In addition, large churches and union

halls commonly offer gym access at no cost. This is a threat because potential members with

“tight pockets” will opt to go to the church or union hall instead of paying monthly or yearly

fees. Many employers such as LG&E and Humana offer in house fitness centers in order to

promote wellness. These gyms are generally at no cost to the employee, well maintained, and

have top of the line commercial equipment. Another threat to fitness centers is the likeliness of

potential members to build their own home gym.

Fitness Center 24-Hour Fresh Food BarAdvanced Training Group Classes Childcare

Sauna/Steam Rooms Differentiated Levels Transformations

Snap FitnessUrban ActiveLACYMCACurvesFitness 19Further Than Fitness

11

Management Team/Executives (2-3 Pages)

Nick Theilen

Founder and CEO: Nick Theilen’s love for fitness has been apparent since he was a young kid

who was involved in several different sports. Nick has worked in a hospital for over three years

as a transporter and has seen the adverse effects of an unhealthy lifestyle. Nick also has a

background in fitness and sports working as a swim instructor for two years.  He is a senior

management major at the University of Louisville and has the skills to successfully organize and

run a gym. Nick will serve as one of our administrative managers. He will be in charge of the

day to day operations of the gym as well as hiring and scheduling employees.

Justus Zils

Chief Operating Officer:  Justus Zils is a senior marketing major with a double minor in

entrepreneurship and exercise science at The University of Louisville.  Justus has demonstrated a

strong work ethic from a young age.  He worked as a motorcycle mechanic from the age of 14 to

18.  He worked for three years as a fragrance vendor for Clarins Group. Currently he is working

as a minister of hospitality for East Coast Saloons.  Justus has traveled for East Coast Saloons

and has received extensive training on operations strategy.  He will serve as the other gym

manager and share duties with Nick Theilen. Justus will be in charge of the day to day

operations of the gym as well as hiring and scheduling employees.

Brian Ray

Chief Marketing Officer: is a junior marketing major with a minor in entrepreneurship at the

University of Louisville. Brian has had extensive marketing experience with his family’s

business, Bluegrass Bouncers.  He has worked with several companies designing ads for

Bluegrass Bouncers and is familiar with the qualities of an effective marketing campaign. A

12

monthly marketing meeting will be conducted by Brian addressing the comment cards and

monthly surveys conducted at the fitness center. He will also examine industry trends and

determine how Further Than Fitness will adapt to the trend.

Dawna Botkin

Chief Financing Officer:  Dawna Botkin is a junior accounting major at The University of

Louisville.  She has served as an intern for Extell Financial in Louisville, Ky. Her daily

activities will include monitoring the company’s expenses and revenues.

Amy Wagner & Susan Stewart

Vice Presidents of Design:  Amy Wagner has extensive design experience and expertise in art

and interior design.  Along with her design experience, she has served as part of the Army

Reserves for the past eight years.  Amy is a senior marketing major with a minor in

entrepreneurship at the University of Louisville.  Susan Stewart’s love for design is coupled with

her passion for photography.  She is a junior marketing major and will double minor in

communications and entrepreneurship at the University of Louisville.

Operating Strategies (4 Pages)

Marketing

Further Than Fitness will begin marketing to the Baby Boomer generation with the idea that

health care costs will push men and women ages 45+ towards fitness facilities. According to a

2005 study by Merrill Lynch, “the unpredictable cost of illness and healthcare is by far boomers’

biggest fear.” Men and women who are looking to improve their fitness and their eating habits

will also be targeted. The fresh food eatery will offer a selection of food to meet the individual

needs of all of members. We will also target people who have the desire to become healthier but

13

lack self-motivation. We will market to them through our Transformations Program. We intend

to market through weekly member testimonials, leaflets, commercials, free sign-up boxes, and

signage. We will generate awareness, interest, and new memberships through a grand opening

event.

Production

Our fresh food eatery will allow customers to create healthy meals according to portion size and

their preference to taste while following the meal plan designed by the lifestyle advisor. Further

Than Fitness will have certified trainers to help members from all fitness levels. Lifestyle

Advisors will help with nutritional plans and tailor the workouts to help each member

individually reach their personal goals. Through the Transformations Program Lifestyle Advisors

will maintain a relationship with each member of the program keeping track of their scheduled

workout times, meetings, providing encouragement and a support system.

Research and Development

Research and Development will be conducted by the Chief Marketing Officer to keep Further

Than Fitness up-to-date in exercise methods and technological advances. The CMO will make

sure members feel comfortable in their atmosphere by receiving feedback through member

surveys.

The marketing information will be gathered from bimonthly meetings conducted by the CMO to

determine the member’s well-being and needed improvement. This information will be provided

by periodical surveys of members and by the analysis of other competitors.

14

Further Than Fitness will be built in three phases. In Phase 1, leasing and renovating the

building is the main goal. Leasing the building before purchasing it will help minimize the

initial start-up costs. The desired building will be approximately 40,000 square feet. A fitness

center will be implemented that includes: three separate workout areas (beginner, intermediate,

and advanced), one room for group classes, a fresh food eatery, a small childcare facility,

separate men’s and women’s locker room, and offices for staff members. As shown by our

survey in Appendix A, the target market has shown a desire for an indoor swimming pool.

Therefore, in Phase 2, it will be necessary to purchase the building and property in anticipation to

build an indoor pool in Phase 3. This phase will commence once membership total is 1800,

which is anticipated to occur in year 3. In phase 3 an indoor swimming pool will be added to the

fitness center to increase member satisfaction.

Personnel Strategy

Our facility will be staffed with 17 part–time employees, 2 Managers, 1 Accountant, 2 Lifestyle

Advisors, 2 Trainers, and 1 Training Coordinator. Four members of the management team

(Brian Ray, Susan Stewart, Dawna Botkin, and Amy Wagner) will only assist in executive

decision making for Further Than Fitness, and will not be involved in any administrative

decision making.

During the busiest hours of operation, between the hours of 5am and 10pm, the staffing will

consist of the following employees:

Managers will work split shifts and oversee the daily operations

The Accountant will monitor the spending and revenue as well as administrative payroll

7 part-time employees –2 childcare, 2 front-desk, and 3 food service. All part-time

employees will also be responsible for cleaning the areas in which they are working.

15

There will be four 6 hour shifts that these employees will work; 1st will be 5am to 11am,

2nd will 11am to 5pm, 3rd will 5pm to 11pm, and the night shift will be from 11pm to

5am

2 Lifestyle Advisors to assist members in making the right lifestyle decisions for their

specific goals

The Training Coordinator manages and coaches Lifestyle Advisors, while staying abreast

to changes in the health and wellness industry.

At least 3 Trainers will be on staff to assist our members with reaching their fitness goals

upon request

The night shift will be staffed by one part-time employee due to low volume of members and

liability concerns.

Administrative Strategy

Managers will be in control of all administrative operations, including overseeing the training

coordinator to ensure the trainers are properly certified and operating efficiently. They will also

manage the Lifestyle Advisors to make sure the Transformations Program is running effectively.

The fresh food eatery will be supervised by our managers to ensure satisfaction of members as

well as outside customers.

Financial Strategy

The venture requires several types of financing including a SBA small business loan. Other

sources of financing include personal loans, which will pay for the majority of start up costs.

16

Leasing the facility as well as the more expensive cardio equipment will keep startup costs low.

All other equipment, including free-weights and machines will be purchased based on cost

efficiency.

Critical Risks (3 Pages)

Risk Description Contingency

Liabilities Member and Employee Injury Proper training and supervision of members and employees

Growth Fitness center expansion Three and five year phase plans

Membership Obtainment

Retention issues Promotion programs and Transformations program

Start-up Cost High cardio equipment cost and building lease cost

Initially lease the building and expensive cardio equipment

Saturation Multiple fitness centers Transformations program and fresh food eatery

Governmental High tax and interest rates Maximized profits from cutting-edge technology will offset high rates

Evaluation of Weaknesses

Several weaknesses have been identified through careful observation of the market. Of these

weaknesses, some major risks need to be addressed in order to be successful. Internal risks

include liabilities and growth risks. Liabilities are in the form of employee or member injury

from equipment. Growth risks are in reference to the size of the fitness center. Another risk is

17

that the initial offerings of the fitness center will not meet the expectations of all possible

members.

External risks include membership obtainment, cost of start-up, fitness center saturation in the

market, and governmental risks. Because 35-40 percent of fitness club members do not renew

their memberships, it can be difficult to retain members. It will also be difficult to obtain

members from other gyms because of the high switching costs members would incur. In

addition, marketing costs will be high in order obtain new members. Governmental risks are

also an issue because of high tax rates and interest rates that could increase. These external risks

pose an uncertain revenue stream and could cause financial problems.

The average cost of gym cardio equipment is $5,000 to $10,000 for each piece. It will also cost

additional funds to teach our Training Coordinator innovations in the industry and train

employees to implement new methods. The most likely risk associated with our facility is

associated with fitness center saturation throughout the market. There are many fitness centers

in our geographic area, which offer some similar services to that of Further Than Fitness.

Escape Strategy

Although there are many risks in the market, Further Than Fitness has devised plans to

effectively overcome them.

18

In terms of preventing liabilities, proper training programs and excellent supervision of members

by trainers and employees will be the main strategy. In reference to the growth risks, the three to

five year phase plans will allow the facility to gradually develop and include all the necessary

components of a successful fitness center.

In preventing external risks, the strategy will address all of the areas mentioned in the

weaknesses section. With membership obtainment problems, promotion programs along with

the Transformations Program will be utilized to obtain and retain members. To address the risks

of high start-up costs, the financial strategy will be to initially lease the building and expensive

equipment on a three-year basis. In solving the largest problem, the saturation of the market,

Further Than Fitness will offer its Transformations Program along with the fresh food eatery and

competitive memberships. With innovative and cutting-edge technology, profits will be

maximized and therefore the taxes and interest expensed will not be a significant liability.

Board of Advisors

*Scott Miller- Owner of Kentucky Pool Management

*John A. DeCamillis- Attorney at Law

*Ron Crouch- Director of Kentucky State Data Center

*Danny Walker- Former owner of Paducah Gym

*Jeremy Byers- Real Estate Agent

19

Further Than FitnessProjected Income StatementAnnual

2010 % sales 2011 % sales 2012 % sales 2013 % sales 2014Sales 1,295,945$ 1,294,089$ 1,332,507$ 1,369,929$ 1,410,835$ COGS 238,324 18.39% 237,983 18.39% 244,782 18.37% 251,930 18.39% 259,452 Gross Profit 1,057,621$ 81.61% 1,056,106$ 81.61% 1,087,726$ 81.63% 1,117,999$ 81.61% 1,151,382$

Operating Expenses Sell ing Expenses Marketing & Advertising 78,000 6.02% 58,000 4.48% 58,000 4.35% 58,000 4.23% 58,000 General & Administrative Expenses Management Salaries 305,020$ 23.54% 314,171$ 24.28% 323,596$ 24.28% 333,304$ 24.33% 343,303$ Staff Salaries 61,750 4.76% 61,750 4.77% 61,750 4.63% 61,750 4.51% 61,750 Benefits 10,957 0.85% 11,285 0.87% 11,624 0.87% 11,973 0.87% 12,332 Payroll Taxes 52,403 4.04% 54,696 4.23% 56,734 4.26% 59,479 4.34% 61,979 Insurance 32,997 2.55% 32,997 2.55% 32,997 2.48% 32,997 2.41% 32,997 Equipment Lease 34,060 2.63% 34,060 2.63% 34,060 2.56% 17,030 1.24% 17,030 Depreciation 36,390 2.81% 36,390 2.81% 36,390 2.73% 36,390 2.66% 36,390 Rent/Utilities 124,589 9.61% 124,589 9.63% 124,589 9.35% 124,589 9.09% 124,589 Cable/Telephone 4,992 0.39% 4,992 0.39% 4,992 0.37% 4,992 0.36% 4,992 Technology 3,000 0.23% 3,000 0.23% 3,000 0.23% 3,000 0.22% 3,000 Repairs & Maintenance 5,000 0.39% 5,000 0.39% 5,000 0.38% 5,000 0.36% 5,000 Supplies 1,690 0.13% 1,690 0.13% 1,690 0.13% 1,690 0.12% 1,690 Postage & Delivery - 0.00% - 0.00% - 0.00% - 0.00% - Legal/Accounting 18,000 1.39% 18,000 1.39% 18,000 1.35% 18,000 1.31% 18,000 Printing 9,000 0.69% 9,000 0.70% 7,000 0.53% 6,000 0.44% 6,000 Miscellaneous - 0.00% - 0.00% - 0.00% - 0.00% - Other G&A Expenses 116,635 9.00% 116,468 9.00% 119,795 8.99% 123,294 9.00% 126,975 Research & Development R&D Expenses -$ 0.00% -$ 0.00% -$ 0.00% -$ 0.00% -$ Total Operating Expense 894,483$ 69.02% 886,088$ 68.47% 899,218$ 67.48% 897,487$ 65.51% 914,027$

Operating Profit (EBIT) 163,137$ 12.59% 170,018$ 13.14% 188,508$ 14.15% 220,512$ 16.10% 237,355$

Other Income / (Exp) -$ 0.00% -$ 0.00% -$ 0.00% -$ 0.00% -$ Interest Income / (Exp) - 0.00% - 0.00% - 0.00% - 0.00% - Total Oth Inc/Expense -$ 0.00% -$ 0.00% -$ 0.00% -$ 0.00% -$

Net Income Before Tax (EBT) 163,137$ 12.59% 170,018$ 13.14% 188,508$ 14.15% 220,512$ 16.10% 237,355$

Tax 65,255$ 5.04% 68,007$ 5.26% 75,403$ 5.66% 88,205$ 6.44% 94,942$

Net Income 97,882$ 7.55% 102,011$ 7.88% 113,105$ 8.49% 132,307$ 9.66% 142,413$

Further Than FitnessProjected Balance SheetAnnual 2010 2011 2012 2013 2014AssetsCurrent Assets:

Cash and cash equivalents 437,603.3$ 532,376.8$ 631,227.5$ 744,969.9$ 857,572.7$ Accounts receivable 61,272.5 58,945.5 59,972.7 61,072.0 62,251.1 Inventories 61,272.5 58,945.5 59,972.7 61,072.0 62,251.1 Prepaid expenses - - - - -

Total current assets 560,148.3$ 650,267.7$ 751,172.9$ 867,114.0$ 982,074.9$ Fixed Assets:

Furniture and Fixtures 14,554.8 14,554.8 14,554.8 14,554.8 14,554.8 Equipment 195,743.6 195,743.6 195,743.6 195,743.6 195,743.6 Construction in progress - - - - -

210,298.4$ 210,298.4$ 210,298.4$ 210,298.4$ 210,298.4$ Less accumulated depreciation 36,390.3 72,780.5 109,170.8 145,561.1 181,951.3

Furniture, Fixtures, Fleet, Net 173,908.1$ 137,517.9$ 101,127.6$ 64,737.3$ 28,347.1$ Other Assets - - - - -

Total Assets 734,056.5$ 787,785.6$ 852,300.5$ 931,851.3$ 1,010,421.9$

Liabilities and stockholders' equityCurrent liabilities:

Short-term debt -$ -$ -$ -$ -$ Accounts payable 19,860.4 19,831.9 20,398.5 20,994.2 21,621.0 Other accrued liabilities - - - - - Income taxes payable 65,254.9 68,007.1 75,403.1 88,204.7 94,942.0

Total current liabilities 85,115.3$ 87,839.1$ 95,801.6$ 109,198.9$ 116,563.0$ Long-term liabilities

Long-term debt -$ -$ -$ -$ -$ Deferred tax liabilities - - - - - Total liabilities 85,115.3$ 87,839.1$ 95,801.6$ 109,198.9$ 116,563.0$

Stockholders' equity 600,000.0$ 600,000.0$ 600,000.0$ 600,000.0$ 600,000.0$ Retained earnings 48,941.2 99,946.5 156,498.9 222,652.4 293,858.9

Total stockholders' equity 648,941.2$ 699,946.5$ 756,498.9$ 822,652.4$ 893,858.9$ Total Liabilities & Stockholders' equity 734,056.5$ 787,785.6$ 852,300.5$ 931,851.3$ 1,010,421.9$

20

Further Than FitnessAnnual Statement of Cash Flows

2010 2011 2012 2013 2014Cash and cash equivalents, beginning of month 600,000$ 437,603$ 532,377$ 631,228$ 744,970$ Cash flow from operations:

Net income 97,882$ 102,011$ 113,105$ 132,307$ 142,413$ Additions (sources of cash):

Depreciation 36,390 36,390 36,390 36,390 36,390 Increase in accounts payable 19,860 (28) 567 596 627 Increase in accrued income taxes 65,255 2,752 7,396 12,802 6,737

Subtractions (uses of cash):Increase in accounts receivable 61,272 (2,327) 1,027 1,099 1,179 Increase in inventory 61,272 (2,327) 1,027 1,099 1,179 Net cash flow from operations 96,843 145,779 155,403 179,896 183,809

Cash flow from investing activities:Furniture and Fixtures 14,555$ -$ -$ -$ -$ Equipment 195,744 - - - -

Net cash (used for) investing activies 210,298$ -$ -$ -$ -$ Cash flows provided by (used for) financing activies:

Increase (decrease) in short-term debt, net -$ -$ -$ -$ -$ Capital infusion - - - - - Additions to long-term debt - - - - - Retirement of long-term debt - - - - -

Net cash (used for) financing activities: -$ -$ -$ -$ -$ Cash distributions to shareholders 48,941$ 51,005$ 56,552$ 66,154$ 71,206$

Net increase (decrease) in cash and cash equivalents (162,397)$ 94,773$ 98,851$ 113,742$ 112,603$ Cash and cash equivalents, end of month 437,603$ 532,377$ 631,228$ 744,970$ 857,573$

Funds Required

Offering

21

Works Cited

"40059 Zip Code (Prospect, Kentucky) Detailed Profile - residents and real estate info." Stats

about all US cities - real estate, relocation info, house prices, home value estimator,

recent sales, cost of living, crime, race, income, photos, education, maps, weather,

houses, schools, neighborhoods, and more. 6 Mar. 2009

<http://www.city-data.com/zips/40059.html>.

Alberding, Franci. "Fitness Insider." Alberding Sales. 16 Nov. 2008

<www.alberdingsales.com/pdf/as_article_fitnessCenter_final.pdf>.

Atilano, Daniel. "Tracking the trends: a look at how fitness centers are impacted by health and

social factors | Parks & Recreation | Find Articles at BNET." Find Articles at BNET |

News Articles, Magazine Back Issues & Reference Articles on All Topics. 5 Mar. 2009

<http://www.findarticles.com/p/articles/mi_m1145/is_3_41/ai_n16133326>.

Bannan, Karen . "Have insurance? You probably can afford a gym- Get Fit." Shape Feb. 2003.

26 Jan. 2009 <findarticles.com/p/articles/mi_m0846/is_/ai_96277529>.

Beattie, Leanne. "Get Fit for Less." Frre Diet Plans at Spark People. 17 Nov. 2008

<www.sparkpeople.com/resource/fitness_articles.asp?id=887>>.

"BizStats - business statistics, industry statistics, financial ratios." BizStats - business statistics,

industry statistics, financial ratios. 6 Mar. 2009 <http://bizstats.com>.

"CITYFEET - COMMERCIAL REAL ESTATE." CITYFEET - COMMERCIAL REAL

ESTATE. 6 Mar. 2009 <http://cityfeet.com>.

22

Chang, Alica. "Low-carb? Low-fat? Diet study finds calories count more." The Courier-Journal

26 Feb. 2009, sec. A: 5.

"Deprecation Guide." Claims Page. 24 Feb. 2009

<www.claimspages.com/documents/docs/2001D.pdf>.

"Employers Beginning toReap Benifits of Corporate Fitness Programs, National Business Group

on Health Poll Finds." PR Web press release newswire. 1 July 2004. 26 Jan. 2009

<www.prweb.com/releases/2004/07/prweb138049.htm>.

"Fitness and Recreational Sports Centers Industry Forecast and Business Metrics." Anything

Research Market Analysis. 8 Feb. 2009 <www.anythingresearch.com/industry/Fitness-

and-Recreational-Sports-Centers.htm>.

"Gold's Gym - About Gold's - Franchising." Gold's Gym. 6 Mar. 2009

<http://www.goldsgym.com/golds/franchising/facts.php>.

Goldman, Stuart. "2009 State of the Industry: One Step at a Time - Fitness Business Pro article."

Fitness Business Pro | Comprehensive information for exerise athletic professionals,

trainers, fitness instructor & recreation professionals. 6 Mar. 2009

<http://fitnessbusinesspro.com/forprofits/state_of_industry_200901/>.

"Internal Revenue Service." Internal Revenue Service. 6 Mar. 2009 <http://www.irs.gov>.

Jefferson County - Demographics." Home | The Kentucky Cabinet for Economic

Development. 6 Mar. 2009 <http://thinkkentucky.com/EDIS/cmnty/Demog.aspx?

cw=091>.

Members Of Local Gyms, Members of Local Gyms. Personal Interview. 11 Feb. 2009.

23

Miller, Scott. Phone Interview. 25 Jan. 2009.

"Office Products - Office Supplies, Furniture, Technology & Electronics | Staples®." Office

Products - Office Supplies, Furniture, Technology & Electronics | Staples®. 6 Mar.

2009 <http://www.staples.com>.

Pelletier, Kenneth. "Corporate Fitness Partnership Options." American Journal of Health

Promotions March/April (1991). 26 Jan. 2009.

"Redirecting to IHRSA Web Site." Redirecting to IHRSA Web Site. 6 Mar. 2009

<http://www.cms.ihrsa.org>.

"Sam's Club - samsclub.org." Sam's Club - samsclub.org. 6 Mar. 2009

<http://www.samsclub.org>.

Thompson, Craig . "Weight loss sugery in Kentucky." Amazines. 25 Jan. 2009

<https://www.amagazines.com/article_detail.cfm/695175?articleid=695175>.

databases, using infoUSA, and non-commercial. "ReferenceUSA." ReferenceUSA. 6 Mar. 2009

<http://referenceusa.com>.

retirement, rejecting traditional, leisure, boomers will have increased earning, savings, and

investment compounding years.. ""The New Retirement Survey" From Merrill Lynch

Reveals How Baby Boomers Will Transform Retirement." Merrill Lynch – financial

management and advisory. 6 Mar. 2009 <http://www.ml.com/?

id=7695_7696_8149_46028_46503_46635>.

Demographics of the U.S.: Trends and Projections. Ithica: New Strategist Publications, 2007.

24

Handbook of Industry Profiles 2008. Austin: Hoover's, 2008.

The Lists / Business First (Louisville, Ky.).. Louisville: Louisville, Ky. : Business First of

Louisville, 1992-, 2008.

"webstrauntstore.com." webstrauntstore.com. 6 Mar. 2009 <http://www.webstrauntstore.com>.

" writing sales letters business letter at refrenceforbusiness.com." writing sales letters

business letter at refrenceforbusiness.com. 6 Mar. 2009

<http://www.refrenceforbusiness.com/industries/Services/Physical-Fitness-

Facilities.html>.

Bulleted Products and Services

o A calm and un-intimidating environment to provide its users with a sense of

comfort, intimacy, and confidence.

o A different assortment of machines and cardio equipment will provide the

users of the beginner area with the capability of achieving a full body

workout.

o This area will effectively use the guidance of personal trainers to help people

with minimal experience in exercise to accomplish their goals.

o Members in this stage will be able to attend specific classes offered in our

group class area. The classes will include yoga, aerobics, step, zumba, and

spinning.

25

o This is a gym area that will provide more confident and experienced members

with an environment where they will be able to thrive.

o Free weights and heavy resistance machines will be available to individuals

seeking to use this type of equipment.

o Members in this area will be able to use a larger quantity of cardio equipment

and attend group fitness classes as well.

o This area is characterized by dynamic and high intensity workouts. Members

as advanced as athletes and martial artists will be able to perform their

necessary trainings as well as any normal member.

o A padded area will be provided for ground workouts for grappling fighting

styles such as Ju Jitsu and wrestling.

o A rubber matted area will facilitate ten heavy bags for a training area of

boxing and kickboxing style workouts.

o A hardwood floor area will facilitate training that requires open floor space for

sprinting, jump roping, cone drills, along with many other workouts.

o Specific high intensity classes will be available to provide members with the

required equipment and space necessary for high performance workouts.

26

We will focus these high intensity workouts on the styles of

professional fighters such as boxers, kick boxers, and mixed martial

artists due to the current trend of professional fighting’s popularity

27