Table of Content

    Climbing wall business plan for your own gym

    Are you thinking of how to open a climbing gym? Well, this is an excellent venture considering rock climbing has become a popular gym activity with many people gaining more interest. With people now fully aware of the benefits associated with going to the gym, the number of people patronizing gyms has increased. The fact that you can maintain a healthy lifestyle while at the same time, have fun has contributed to many rock climbing gym patrons. For this reason, it is a great business idea to venture. Initial capital required is intensive but you can be assured to recover your costs within the first three years of business.

    Executive Summary

    2.1 The Business

    The climbing gym business will be registered under the name Spark Rock Gym, and will be situated in Enos Park, Springfield Illinois. The business will be owned and managed by Thomas Mulez, an experienced fitness professional.

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    2.2 Management Team

    Thomas Mulez is a fitness instructor who has been the fitness industry for over ten years. Before starting a climbing gym, Thomas worked for many popular and large fitness brands across the United States acquiring extensive knowledge and experience.

    2.3 Customer Focus

    Spark Rock Gym intends to offer a modern, spacious and well equipped climbing gym for residents of Enos Park and the entire city of Springfield.

    2.4 Business Target

    Being the first such kind of business in Enos Park neighborhood, the entire immediate community and residents of Springfield will benefit from a modern, professionally managed facility.

    Climbing Gym Business Plan - 3 Years Profit Forecast

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    Company Summary

    3.1 Company Owner

    Thomas Mulez is fitness instructor who has worked with top U.S. fitness household brands such as Curves International and 24 Hour Fitness. He has contributed immensely to ensuring the growth of the fitness industry by working in various capacities in the course of his career.

    3.2 Aim of Starting the Business

    Making your own rock climbing wall business requires expert understanding of how the business works in order to correctly identify priorities and set goals. Thomas has previously managed rock climbing gyms and therefore, understands the nitty-gritty details of rock climbing gyms.

    3.3 How the Business will be Started

    As a professional fitness instructor with rock climbing gyms, Thomas knows well what it entails to begin this enterprise. To actualize his vision, he has hired professionals to come up with a financial roadmap to guide the business. The following is core financial data for Spark Rock Gym.

    Climbing Gym Business Plan - Startup cost

    Start-up Expenses  
    Legal $5,000
    Consultants $10,000
    Insurance $14,000
    Rent $25,000
    Research and Development $8,000
    Expensed Equipment $20,000
    Signs $4,000
    TOTAL START-UP EXPENSES $91,000
    Start-up Assets $0
    Cash Required $13,000
    Start-up Inventory $60,000
    Other Current Assets $15,000
    Long-term Assets $8,000
    TOTAL ASSETS $0
    Total Requirements $96,000
    START-UP FUNDING $0
    START-UP FUNDING $100,000
    Start-up Expenses to Fund $45,000
    Start-up Assets to Fund $40,000
    TOTAL FUNDING REQUIRED $0
    Assets $5,000
    Non-cash Assets from Start-up $12,000
    Cash Requirements from Start-up $0
    Additional Cash Raised $40,000
    Cash Balance on Starting Date $25,000
    TOTAL ASSETS $0
    Liabilities and Capital $0
    Liabilities $0
    Current Borrowing $0
    Long-term Liabilities $0
    Accounts Payable (Outstanding Bills) $0
    Other Current Liabilities (interest-free) $0
    TOTAL LIABILITIES $0
    Capital $0
    Planned Investment $0
    Investor 1 $8,000
    Investor 2 $10,000
    Other $0
    Additional Investment Requirement $0
    TOTAL PLANNED INVESTMENT $80,000
    Loss at Start-up (Start-up Expenses) $35,000
    TOTAL CAPITAL $40,000
    TOTAL CAPITAL AND LIABILITIES $30,000
    Total Funding $280,000

    Services for Customers

    Spark Rock Gym is keen to offer professional and modern rock climbing facilities for patrons. When starting a rock climbing gym in Enos Park, the business will focus on building long lasting client relationships as it offers the following services.

    • Offer indoor wall rock climbing facilities and training teams for outdoor climbing expeditions
    • Provide a wide variety of facilities for children fun and games
    • Amusement and recreation services for patrons and guests
    • Offer indoor playground facilities

    Marketing Analysis for Climbing Gym Business

    For Spark Rock Gym to meet its market obligations, an extensive market analysis to find out market trends was initiated to help the business effectively tap into the market. This rock climbing gym business plan has elaborates the strategy the business intends to use to accomplish its goals. With the rapid popularity and growing trend of rock climbing sports, there’s definitely great potential for Spark Rock Gym to leverage on.

    Note

    Considering the strategic business location, demographic statistics and prevailing competition, it is guaranteed the gym will enjoy high patronage.

    5.1 Market Segmentation

    Building a rock climbing gym in Enos Park, Springfield is an excellent idea considering it is the first of its kind in the area. Spark Rock Gym therefore has the best opportunity to engage in vigorous marketing campaigns to command a larger market share. One doesn’t need to have any previous climbing experience to come to this gym which opens up the customer segment. Based on its market findings, the gym intends to target the following groups of customers.

    Climbing Gym Business Plan - Market Segmentation

    Franchise Business Plan

    5.1.1 Children

    Many rock climbing gyms earn a giant share of their revenue and profits from having children fun related activities. Spark Rock Gym intends to have a wide array of children’s programs that will make the facility more attractive for children. Springfield has a large population of children between ages of five and eighteen which is key revenue potential for the business. Parents are nowadays encouraging their children to take part in recreation activities and sports in order to encourage healthy living. With a rock climbing gym in the community, the biggest beneficiaries and most lucrative customers for the business are children.

    5.1.2 Adults (Age 18-44)

    As rock climbing sport awareness increases, adults are also joining the excitement and want to participate in rock climbing for fun. This climbing gym business plan also incorporates adults since the business intends to put in place nice facilities that will appeal to the adult population between 18 -44 years. Since a majority of this age group are working and in active careers, they’re likely to pay for membership which generates a steady revenue channel for the gym.

    5.1.3 Schools and College Students

    Rock climbing is an emerging popular sport in various educational institutions. As such, many schools tend to organize indoor rock climbing competitions. Spark Rock Gym stands a great chance to benefit as these schools and their students will need a modern, well-equipped and safe venue where they can compete and have fun. Considering the high number of educational institutions in the neighboring areas, the prospects look bright. Spark Rock Gym plans to effectively market its services to schools and the general student population that loves to hang out and have fun.

    5.1.4 Churches and Religious Centers

    Springfield has many churches and religious institutions that occasionally organize fun events for their congregations. With a modern indoor rock climbing facility, Spark Rock Gym offers an exciting venue where religious institutions can host different types of social events as well as various religious events.

    Market Analysis
    Potential Customers Growth YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 CAGR
    Adults 18% 20,000 25,000 30,000 35,000 40,000 10.00%
    Children 35% 30,000 35,000 40,000 45,000 50,000 14.00%
    School and College students 30% 25,000 30,000 35,000 40,000 45,000 15.00%
    Churches and religious centers 17% 15,000 20,000 25,000 30,000 35,000 13.00%
    Total 100% 90,000 95,000              130,000 150,000 170,000 18.00%
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    5.2 Business Target

    Spark Rock Gym is set to operate in strategic location where it faces no competition from similar establishments. The high population is a source of ready market for the rock climbing gym. When determining how much does it cost to open a climbing gym, the business knows it is expensive to open a rock climbing gym and therefore, adequate plans are needed to recover the initial investment. Spark Rock Gym hopes to have fully recovered the entire startup investment after three years since opening. The gym has predicted 20-25% annual increase in sales.

    5.3 Product Pricing

    A sustainable climbing gym business model should carefully and accurately determine prices of its services as this is the foundation of business success. Despite having no competition, Spark Rock Gym has put in place a competitive pricing approach to attract and retain customers.

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    Strategy

    To open a rock climbing gym, you need to come up with a well-defined and executable strategy. Thomas Mulez has worked closely with experts to create a customized rock climbing gym strategy that will be the blueprint of attracting business revenue. The following is Spark Rock Gym sales strategy.

    6.1 Competitive Analysis

    Spark Rock Gym is situated in a strategic and easily accessible location serving a huge population. In addition, this is the first rock climbing gym business in the area and therefore, the business anticipates a high demand.

    6.2 Sales Strategy

    To ensure Spark Rock Gym captures its intended customers, the following strategies will be used to boost sales.

    • The business will use word of mouth marketing as it is one of the most powerful gym marketing techniques. Being an exciting sport, it is expected referrals will play a great role in bringing more customers to the business.
    • Advertise the gym on local media channels such as Television, radio and print media.
    • Organize a much publicized grand opening party to create awareness about the new rock climbing gym.
    • Advertise the business on digital media platforms such as Facebook, Instagram and Twitter.
    • Introduce a loyalty program and incentives to award regular clients.
    • Reach out directly to institutions such as schools and religious centers.
    • Organize numerous children activities such as birthday parties and rock climbing children teams.
    • Engage in road shows and post signage at strategic places.

    6.3 Sales Forecast

    Spark Rock Gym is focused on implementing a wide variety of sales strategies to attain its targets. Below is a summary of sales forecasts based on the rock climbing business start up costs.

    Climbing Gym Business Plan - Unit Sales

    Sales Forecast      
    Unit Sales Year 1 Year 2 Year 3
    Indoor wall rock climbing 400,000 440,000 480,000
    Children fun and games 210,000 250,000 290,000
    Amusement & recreation services 200,000 240,000 280,000
    Indoor playground facilities 300,000 330,000 360,000
    TOTAL UNIT SALES 1,110,000 1,260,000 1,410,000
    Unit Prices Year 1 Year 2 Year 3
    Indoor wall rock climbing $280.00 $300.00 $320.00
    Children fun and games $220.00 $240.00 $260.00
    Amusement & recreation services $240.00 $260.00 $280.00
    Indoor playground facilities $260.00 $280.00 $300.00
    Sales
    Indoor wall rock climbing $300,000 $350,000 $400,000
    Children fun and games $250,000 $300,000 $350,000
    Amusement & recreation services $180,000 $220,000 $260,000
    Indoor playground facilities $200,000 $230,000 $260,000
    TOTAL SALES
    Direct Unit Costs Year 1 Year 2 Year 3
    Indoor wall rock climbing $2.20 $3.20 $5.20
    Children fun and games $2.10 $3.00 $4.10
    Amusement & recreation services $0.50 $1.50 $3.50
    Indoor playground facilities $4.00 $6.00 $8.00
    Direct Cost of Sales
    Indoor wall rock climbing $120,000 $140,000 $170,000
    Children fun and games $100,000 $120,000 $140,000
    Amusement & recreation services $70,000 $100,000 $130,000
    Indoor playground facilities $120,000 $140,000 $160,000
    Subtotal Direct Cost of Sales $210,000 $250,000 $280,000

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    Personnel Plan

    Spark Rock Gym offers various services as opposed to only proving the core service in order to boost the income stream. How the business intends to pay salaries is spelt out in this start a climbing gym business plan.

    7.1 Personnel Plan

    Spark Rock gym is owned by Thomas Mulez who will also be the manager of the rock climbing gym business. The business intends to hire the following staff to serve customers.

    • Business Manager
    • Administrator
    • Three Instructors
    • Two Marketing Executives
    • One Cashier

    Successful applicants will be trained effectively and participate in an induction session before the gym opens its doors to the public.

    7.2 Average Staff Salaries

    Spark Rock Gym intends plans to spend the following amounts on staff salaries for the first three years.

     Personnel Plan      
    Year 1 Year 2 Year 3
    Business Manager $70,000 $75,000 $80,000
    Cashier $25,000 $30,000 $35,000
    Administrator $22,000 $27,000 $32,000
    2 Sales and Marketing Executive $80,000 $120,000 $140,000
    3 Instructors $120,000 $140,000 $160,000
    Total Salaries $317,000 $392,000 $447,000

    Financial Plan

    Spark Rock Gym has come up with a sound financial plan that will offer guidance on how the business should run to be successful. Opening a rock climbing gym will be facilitated by Mulez’s personal savings and two investors. In addition, a business plan for bank loan will be secured to help cater for initial costs and expenses. Key financial information for the business has been shown in the sections below.

    8.1 Important Assumptions

    Financial forecasts of Spark Rock Gym will be based on these assumptions.

     General Assumptions      
    Year 1 Year 2 Year 3
    Plan Month 1 2 3
    Current Interest Rate 22.00% 24.00% 26.00%
    Long-term Interest Rate 14.00% 14.00% 14.00%
    Tax Rate 15.00% 17.00% 19.00%
    Other 0 0 0

    8.2 Brake-even Analysis

    Spark Rock Gym Brake-even Analysis is show in the graph below.

    Climbing Gym Business Plan - Brake-even Analysis

     Brake-Even Analysis  
    Monthly Units Break-even 15000
    Monthly Revenue Break-even $325,000
    Assumptions:
    Average Per-Unit Revenue $150.50
    Average Per-Unit Variable Cost $3.60
    Estimated Monthly Fixed Cost $450,000

    8.3 Projected Profit and Loss

    Profit and Loss information for Spark Rock Gym computed on an annual and monthly basis is as shown below.

     Pro Forma Profit And Loss      
    Year 1 Year 2 Year 3
    Sales $600,000 $670,000 $740,000
    Direct Cost of Sales $40,000 $60,000 $80,000
    Other $0 $0 $0
    TOTAL COST OF SALES $40,000 $60,000 $80,000
    Gross Margin $340,000 $400,000 $460,000
    Gross Margin % 40.00% 54.00% 68.00%
    Expenses
    Payroll $240,000 $340,000 $440,000
    Sales and Marketing and Other Expenses $6,000 $8,000 $10,000
    Depreciation $8,000 $6,000 $4,000
    Leased Equipment $0 $0 $0
    Utilities $8,000 $10,000 $12,000
    Insurance $2,000 $4,000 $6,000
    Rent $25,000 $25,000 $25,000
    Payroll Taxes $20,000 $25,000 $30,000
    Other $0 $0 $0
    Total Operating Expenses $260,000 $300,000 $340,000
    Profit Before Interest and Taxes $30,000 $50,000 $70,000
    EBITDA $10,000 $10,000 $10,000
    Interest Expense $0 $0 $0
    Taxes Incurred $15,000 $19,000 $23,000
    Net Profit $150,000 $200,000 $250,000
    Net Profit/Sales 20.00% 35.00% 45.00%

    8.3.1 Monthly Profit

    Climbing Gym Business Plan - PROFIT MONTHLY

    8.3.2 Yearly Profit

    Climbing Gym Business Plan - PROFIT YEARLY

    8.3.3 Monthly Gross Margin

    Climbing Gym Business Plan - GROSS MARGIN MONTHLY

    8.3.4 Yearly Gross Margin

    Below is the Profit and Loss Analysis for Spark Rock Gym.

    Climbing Gym Business Plan - GROSS MARGIN YEARLY

    8.4 Projected Cash Flow

    The diagram below summarizes pro forma cash flow, subtotal cash spent, subtotal cash received, subtotal cash from operations and subtotal cash spent on operations.

    Climbing Gym Business Plan - Projected Cash Flow

     Pro Forma Cash Flow      
    Cash Received Year 1 Year 2 Year 3
    Cash from Operations
    Cash Sales $80,000 $65,000 $50,000
    Cash from Receivables $18,000 $15,000 $12,000
    SUBTOTAL CASH FROM OPERATIONS $98,000 $75,000 $62,000
    Additional Cash Received
    Sales Tax, VAT, HST/GST Received $0 $0 $0
    New Current Borrowing $0 $0 $0
    New Other Liabilities (interest-free) $0 $0 $0
    New Long-term Liabilities $0 $0 $0
    Sales of Other Current Assets $0 $0 $0
    Sales of Long-term Assets $0 $0 $0
    New Investment Received $0 $0 $0
    SUBTOTAL CASH RECEIVED $98,000 $75,000 $62,000
    Expenditures Year 1 Year 2 Year 3
    Expenditures from Operations
    Cash Spending $12,000 $18,000 $23,000
    Bill Payments $25,000 $28,000 $32,000
    SUBTOTAL SPENT ON OPERATIONS $37,000 $46,000 $55,000
    Additional Cash Spent
    Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
    Principal Repayment of Current Borrowing $0 $0 $0
    Other Liabilities Principal Repayment $0 $0 $0
    Long-term Liabilities Principal Repayment $0 $0 $0
    Purchase Other Current Assets $0 $0 $0
    Purchase Long-term Assets $0 $0 $0
    Dividends $0 $0 $0
    SUBTOTAL CASH SPENT $37,000 $46,000 $55,000
    Net Cash Flow $10,000 $13,000 $16,000
    Cash Balance $20,000 $24,000 $28,000

    8.5 Projected Balance Sheet

    Illustrated below is the Projected Balance Sheet for Spark Rock Gym that indicates capital, liabilities, assets, current liabilities and long term assets.

     Pro Forma Balance Sheet      
    Assets Year 1 Year 2 Year 3
    Current Assets
    Cash $280,000 $230,000 $310,000
    Accounts Receivable $9,000 $11,000 $14,000
    Inventory $2,000 $4,000 $6,000
    Other Current Assets $1,500 $2,500 $3,500
    TOTAL CURRENT ASSETS $292,000 $307,500 $333,500
    Long-term Assets
    Long-term Assets $12,000 $14,000 $16,000
    Accumulated Depreciation $10,000 $13,000 $16,000
    TOTAL LONG-TERM ASSETS $5,000 $3,000 $1,500
    TOTAL ASSETS $312,000 $400,500 $362,000
    Liabilities and Capital Year 1 Year 2 Year 3
    Current Liabilities
    Accounts Payable $12,000 $15,000 $18,000
    Current Borrowing $0 $0 $0
    Other Current Liabilities $0 $0 $0
    SUBTOTAL CURRENT LIABILITIES $12,000 $15,000 $18,000
    Long-term Liabilities $0 $0 $0
    TOTAL LIABILITIES $12,000 $15,000 $18,000
    Paid-in Capital $22,000 $22,000 $22,000
    Retained Earnings $26,000 $35,000 $40,000
    Earnings $110,000 $130,000 $150,000
    TOTAL CAPITAL $300,000 $330,000 $360,000
    TOTAL LIABILITIES AND CAPITAL $380,000 $310,000 $200,000
    Net Worth $320,000 $535,000 $580,000

    8.6 Business Ratios

    Spark Rock Gym Ration Analysis, Business New Worth and Business Ratios are shown below.

     Ratio Analysis        
    Year 1 Year 2 Year 3 INDUSTRY PROFILE
    Sales Growth 16.00% 25.00% 40.00% 6.00%
    Percent of Total Assets
    Accounts Receivable 16.00% 15.00% 14.00% 20.00%
    Inventory 23.00% 22.80. % 22.60% 21.00%
    Other Current Assets 20.00% 30.00% 25.95% 35.00%
    Total Current Assets 90.20% 110.10% 120.30% 64.00%
    Long-term Assets -14.00% -16.00% -24.00% 50.50%
    TOTAL ASSETS 80.00% 80.00% 80.00% 80.00%
    Current Liabilities 15.00% 14.00% 13.50% 34.50%
    Long-term Liabilities 0.00% 0.00% 0.00% 20.00%
    Total Liabilities 15.10% 10.00% 10.50% 52.10%
    NET WORTH 80.00% 89.00% 95.00% 46.00%
    Percent of Sales
    Sales 90.00% 90.00% 90.00% 90.00%
    Gross Margin 60.00% 73.00% 82.00% 0.00%
    Selling, General & Administrative Expenses 50.00% 65.00% 75.00% 55.00%
    Advertising Expenses 5.00% 4.00% 2.50% 3.20%
    Profit Before Interest and Taxes 23.00% 24.00% 27.40% 11.50%
    Main Ratios
    Current 19 16 14 3
    Quick 35 30 25 2.6
    Total Debt to Total Assets 13.05% 12.00% 11.65% 65.00%
    Pre-tax Return on Net Worth 70.00% 80.00% 90.00% 20.20%
    Pre-tax Return on Assets 74.30% 78.00% 86.00% 17.00%
    Additional Ratios Year 1 Year 2 Year 3
    Net Profit Margin 26.00% 29.20% 33.00% N.A.
    Return on Equity 70.00% 84.00% 89.00% N.A.
    Activity Ratios
    Accounts Receivable Turnover 7 4 2.5 N.A.
    Collection Days 100 110 120 N.A.
    Inventory Turnover 20 17 14 N.A.
    Accounts Payable Turnover 17 19 21.1 N.A.
    Payment Days 25 25 25 N.A.
    Total Asset Turnover 3.6 3.4 3.2 N.A.
    Debt Ratios
    Debt to Net Worth 0 -0.1 -0.08 N.A.
    Current Liab. to Liab. 0 0 0 N.A.
    Liquidity Ratios
    Net Working Capital $300,000 $320,000 $340,000 N.A.
    Interest Coverage 0 0 0 N.A.
    Additional Ratios
    Assets to Sales 2.46 2.47 2.33 N.A.
    Current Debt/Total Assets 15% 13% 12% N.A.
    Acid Test 33 36 39 N.A.
    Sales/Net Worth 3.4 2.7 1.5 N.A.
    Dividend Payout 0 0 0 N.A.

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