...According to “Snap Fitness,” (2011), “economically, the health club industry has proven to be recession-proof, averaging an 8% annual growth rate since the early 1990’s across all health clubs and gyms,” (Fitness Franchise Opportunities). Snap Fitness franchising offers opportunities for entrepreneurs to open a successful business that has already allocated the following benefits and services for consumers and for the franchisee: Location of fitness needs is open 24/7 Can be easily operated with one employee Affordability for the owner and consumer Business training and start-up marketing include Snap Fitness clubs that have been open for 2 years as of December 31,2012 o (13%) have more than 740 members o 387 (50%) have more than 469 members o 523 (68%) have more than 305 members. This paper will identify the estimation of Snap Fitness’ start-up and variable costs with the inclusion of a cost-volume-profit analysis, the measures needed to achieve net income, its various variable costs, and an analysis on why opening a franchise with Snap Fitness would be a good idea. Estimation of Snap Fitness’ Start-up and Variable Costs (Section A) In determining what Snap Fitness estimated variables are, one needs to look at the monthly fixed costs. Currently, each location of Snap Fitness spends $4,000 in fixed operating expenses and $2,000 to lease equipment. The total of each location’s fixed cost is $6,000. To break even for their monthly fixed costs, a location...
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...Snap Fitness Exercise Centers 12 May 2012 Part A & B –Variable Costs and Target Net Income Analysis CVP analysis requires that all company costs be identified as variable or fixed. Investopedia defines variable costs as, “costs that vary depending on a company’s production volume; they rise as production increases and fall as production decreases”(pg 1). Fixed costs do not change with an increase or decrease in the amount of production. Snap Fitness’ fixed costs are $4,000 a month for operating expenses and $2,000 for the equipment lease (Total $6,000). The amount of members estimated to break-even is 300 at a monthly price of $26. To find variable costs, the equation is listed below: (a) Break-even point = Variable costs + fixed costs + Net income 300*($26.00) = Variable costs + $6,000 + 0 $7,800 = Variable costs + $6,000 Variable costs = $7,800 - $6,000 = $1,800. (b) What would the monthly sales have to be to achieve a target net income of $10,000. (Fixed costs + target net income) / contribution margin ratio = required sales in dollars. Contribution margin ratio = contribution margin / sales. Contribution margin = Sales – variable expenses. $7800 – 1800 = $6,000 6000 / 7800 = 77% contribution margin ratio. ($6000 + $10,000) / 77% = $16,000/0.77 = $20,779 Based on the fixed costs provided, $20,779 in monthly sales would...
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...Snap Fitness, a fitness business based in Minnesota, offers franchise opportunities. The opportunity comes with a start-up fee ranging from $60,000 to $184,000. The following items are included in the start-up fee: 1. Franchise Fee 2. Grand Opening Marketing 3. Leasehold Improvements 4. Utility and Rent Deposits 5. Training Many people dream of owning a business as opposed to working for another business. The benefits of owning a franchise is priceless if ran properly. This paper will show an estimate amount of variable costs and monthly sales in members and dollars for Snap Fitness. Also included are five examples of variable costs and a summary about purchasing a franchise and the decisions that come along with it. Estimate Amount of Variable Costs A Snap Fitness franchise is estimated to incur fixed operating costs of $4,000 and $2,000 to lease fitness equipment. A newspaper article providing details about fitness centers like Snap Fitness states this form of business may only require 300 members to reach its break-even point. The cost-volume-profit, also known as CVP, analysis will assist Snap Fitness in determining the effects of changes of volume and costs on the business’ profits. The CVP analysis will help the new franchise apply appropriate profit planning. The CVP analysis determines profit by subtracting total revenue from total costs. The equation separates costs into variable and fixed. The equation coverts to profit = total revenue -...
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...Snap Fitness Cost-Volume-Profit and Break-Even Analysis Anne, Bratcher Kim Collins, Heather Davis ACC/561 August 13, 2012 Dr. Sandra Welch Snap Fitness Even though owning a business can be costly, finding one that aligns with an individual’s ability to invest and operate is challenging. Health and fitness continues to be one of the biggest markets today. Snap Fitness is a growing franchise chain of fitness clubs that is a reasonably priced investment with relatively fast turn around on investment. Franchise History Peter Taunton founded this chain of fitness clubs in 2003 in Chanhassen, Minnesota. This fitness operation presents individuals looking for a way to own their own business in the fitness industry by offering affordable franchising opportunities. These franchise opportunities are client-friendly and can be found across the globe. Snap Fitness clubs are open 24 hours daily and seven days a week. Memberships in one of these fitness clubs give clients opportunities to fit a work out in at their convenience. Many fitness organizations require members to enter into annual contracts that can offer savings if purchasing two or more year plan. Another good feature of the fitness club allows the client to work out at any Snap Fitness facility in the United States...
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...Snap Fitness would need to achieve 800 memberships to generate a monthly net income of $10,000. Snap Fitness Variable Cost Types Variable costs are costs that vary in total directly and proportionately with changes in the activity level. If the level increases 10%, total variable costs will increase 10%. If the level of activity decreases by 25%, variable costs will decrease 25%. Variable costs include direct materials and direct labor, costs of goods sold, and sales commission. A variable cost may also be defined as a cost that remains the same per unit at every level of activity (Kimmel, Weygandt, & Kieso, 2009). Variable costs for Snap Fitness can membership sales. Active memberships are important in determining how much revenue the fitness center can bring in monthly. Snap Fitness does not have an enrollment fee or contract, their standard membership fee of $26.00 will easily generate new customers. In addition to becoming a member, a customer can have a personal trainer for additional monthly costs. This cost will vary according to how often the customer wants to utilize the service. The cost can be higher or lower if the customer decides on individual training sessions or to split the cost with other members. Retail sales within the fitness center are considered variable costs. These include merchandise, supplements, vending, locker rentals and equipment sales. Most fitness centers do not require many employees. If it is a small facility, one or two employees are...
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...Snap Fitness Franchise Analysis Sebastian Limon, Raja Medipalli, Trevor Moore, Bob Patton, Chad Shipman University of Phoenix ACC/561 Sanja Saracevic January 29, 2012 Snap Fitness Franchise Analysis Snap Fitness is a franchisor of personal fitness devices and associated training modalities as well as 24 hour access for members. The Minneapolis, Minnesota based franchisor claims to equip the worldwide network of franchisees all the necessary equipment in a safe and secure environment for both cardio and strength training. Results for weight loss are guaranteed after an initial "Basic 8" personal training session and is only available to "full memberships" according to the company's website (http://www.snapfitness.com/guarantee). The company appears to focus a great deal of effort on not having a membership agreement while still offering numerous benefits to clients. This is according to the website which appears to be exclusive to members. This submission is accomplished in an effort to compare the requirements of activity of BYP19-7 (John, 2009, p. 1001) with basic franchising information intertwined in the discussion. Viability of Franchising as a Business Model Franchising is a viable alternative for a business rather than the conventional startup particularly when a potential owner has little to no previous experience managing a business. The number of businesses as reported without a business plan tend to reflect this statement, according to "Willard and Shullman...
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...Snap Fitness is a Minnesota-based business CHAPTER 19 – PAGES 1001-1002 BYP19-7 Many of you will some day own your own business. One rapidly growing opportunity is no-frills workout centers. Such centers attract customers who want to take advantage of state-of-the-art fitness equipment but do not need the other amenities of fullservice health clubs. One way to own your own fitness business is to buy a franchise. Snap Fitness is a Minnesota-based business that offers franchise opportunities. For a very low monthly fee ($26, without an annual contract) customers can access a Snap Fitness center 24 hours a day. The Snap Fitness website (www.snapfitness.com) indicates that start-up costs range from $60,000 to $184,000. This initial investment covers the following pre-opening costs: franchise fee, grand opening marketing, leasehold improvements, utility/rent deposits, and training. Instructions (a) Suppose that Snap Fitness estimates that each location incurs $4,000 per month in fixed operating expenses plus $2,000 to lease equipment. A recent newspaper article describing no-frills fitness centers indicated that a Snap Fitness site might require only 300 members to break even. Using the information provided above, and your knowledge of CVP analysis, estimate the amount of variable costs. (When performing your analysis, assume that the only fixed costs are the estimated monthly operating expenses and the equipment lease.) (b) Using the information from part...
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...franchise is critical in understanding whether or not the franchise is going to be as profitable as you would like. One such franchise is Snap fitness out of Minnesota and knowing the fixed cost of operating the franchise we can determine how many members are needed to break even. Also included is an analysis of achieving a $10,000 net income for a month of operations. To be a valid analysis we have included five examples of variable cost associated with a fitness center. Variable Cost As the owners of a new business, our ultimate goal is to make a profit. Profit can be measured in many ways and there are many complex techniques that can be used to calculate how much of a product or service must be sold to produce a profit. Cost Volume Profit analysis or CVP is one of the most useful ways for managers to understand the relationship between cost, volume, and profits and make competent management decisions. CVP analysis focuses on five areas: • Unit selling prices • Variable cost per unit • Total fixed cost • Sales mix • Volume or level of activity Based on our research on the Snap Fitness research some of this information is available to perform CVP analysis. We start by eliminating the focus on sales mix, for now, as a start-up franchise, we are only focusing on selling memberships; there are no additional cost for ancillary services, because at this...
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...Variable costs include direct materials and direct labor, costs of goods sold, and sales commission. A variable cost may also be defined as a cost that remains the same per unit at every level of activity (Kimmel, Weygandt, & Kieso, 2009). Variable costs for Snap Fitness can membership sales. Active memberships are important in determining how much revenue the fitness center can bring in monthly. Snap Fitness does not have an enrollment fee or contract, their standard membership fee of $26.00 will easily generate new customers. In addition to becoming a member, a customer can have a personal trainer for additional monthly costs. This cost will vary according to how often the customer wants to utilize the service. The cost can be higher or lower if the customer decides on individual training sessions or to split the cost with other members. Retail sales within the fitness center are considered variable costs. These include merchandise, supplements, vending, locker rentals and equipment sales. Most fitness centers do not require many employees. If it is a small facility, one or two employees are more than enough. Personal trainers are normally contracted for a fee based on the number of customers being served. Most fitness centers will not go over 10 to 12% in order to keep labor cost at a minimum. Most fitness centers require customers to pay via credit cards of debit cards. The merchant processing fees associated with these cards for customers monthly membership fees will...
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...CVP Analysis and Presentation ACC/561 2012 Cost Volume Profit and Break-Even Analysis Break-Even Analysis-Volume-Analysis is a systematic method of examining the relationship between changes in volume (that is output) and changes in Sales Revenue, Express and Net Profit. As a model of these relationships, Break-Even Analysis simplifies the real-world conditions which a firm will face. The objective of Break-Even Analysis is to establish what will happen to the financial results if a specified level of activity or volume fluctuates. This information is vital to management, as one of the most important variables influencing total sales revenue, total costs and profits is output or volume. Break-Even Analysis is based on the relationship between sales revenue, costs and profit in the short run. The short run being a period in which the output of the firm is restricted to that available from current operating capacity in the short run, some inputs can be increased but others cannot. For example, additional supplies of materials and unskilled labor may be obtained at short notice, but it takes time to expand the capacity of the Plant and Machinery. Thus output is limited in the short run because Plant facilities cannot be expanded. It also takes time to reduce capacity, and therefore, in the short run, a firm must operate on a relative constant stock of production resources. Break-Even Analysis Assumptions It is essential that anyone preparing...
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...which was offered in six colors. The company since has expanded and currently offers of a wide product line of footwear, including boots, sandals, sneakers, mules and flats, which are made of leather and textile fabrics as well as Croslite. A key competitive advantage of the company’s footwear is the use of the Croslite material, which is uniquely suited for comfort and functionality. Croslite is extremely lightweight, comfortable and non-marking while also being water resistant and virtually odor free. The unique characteristics of Croslite enabled the company to offer consumers a shoe unlike any other footwear model current available. In addition to footwear, Crocs also owns the Jibbitz brand, a unique accessory product-line with colorful snap-on charms specifically suited for Crocs shoes. Traditionally, footwear sales make up approximately 96% of total revenues with roughly 75% of sales geared towards adults. The company distributes its footwear and accessories primarily through wholesale...
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...virtual environments running open systems and using Symmetrix VMAX™. Throughout this paper the basis for “traditional environments” will describe hard disk drive or thick device technologies, and the basis for “virtual environments” will describe virtually provisioned thin device environments. June 2011 Copyright © 2011 EMC Corporation. All Rights Reserved. EMC believes the information in this publication is accurate of its publication date. The information is subject to change without notice. The information in this publication is provided “as is.” EMC Corporation makes no representations or warranties of any kind with respect to the information in this publication, and specifically disclaims implied warranties of merchantability or fitness for a particular purpose. Use, copying, and distribution of any EMC software described in this publication requires an applicable software license. For the most up-to-date listing of EMC product names, see EMC Corporation Trademarks on EMC.com. VMware is a registered trademark of VMware, Inc. All other trademarks used herein are the property of their respective owners. Part Number h8264 What’s New with TimeFinder for EMC Symmetrix VMAX 2 Table of Contents Executive summary ........................................................................................... 4 EMC TimeFinder in traditional environments ................................................................. 4 EMC TimeFinder/Clone overview ........................
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...13 Pricing Strategy 16 Costs 16 Sales Forecast 16 Sales Forecast 17 Profit and Loss Statement 17 Table: Profit and Loss Statement 18 Sensitivity Analysis 18 Margins 18 Break-even Analysis 19 Payback Period 19 Net Present Value of Future Cash Flows 19 Unique selling proposition 20 Launch 20 Fitbit advertisements 20 YouTube Viral video 20 Reebok: Crossfit Games 21 In store/ on ground- gym facilities and sporting events 21 Digital social media 21 Website traffic 21 Google Ad words 22 Feedback 22 Media schedule and messaging 22 Electronic direct mail 22 Stock sale and monitoring 22 Sales statistics 22 Gant media schedule 23 Potholes 24 Call to Action 24 Appendices 1 26 Brainstorming Method 26 The Worst Idea Method 26 Relationship Analysis Method - Multi-dimensional / morphological matrix 27 Problem based approach using Voice of Customer through product reviews 27 Highs 28 Lows 28 Highs 31 Lows 31 Market based ideation 32 Problem Analysis of workout market 32 Attribute ideation Method 33 Appendices 2 34 Appendices 3 36 Executive Summary PIC and target market summary Health is opening up a new revolutionary advances within the industry of wearable technology. It is at the beginning of a massive mainstream uptake of wearable devices. According to the ABI research (2011), over the next % years, growth in the wearable wireless devices will be driven by the sports, fitness and wellness segment of the...
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...FUEL 1. Marketing Plan: Phase 1 The following marketing plan forms the basis for the introduction of an innovative new product by the Coca-Cola Company. The analysis allows us to outline the best strategies to follow for the achievement of the company’s strategic goals. “FUEL” (For Unleashed Energy. Levels) will be marketed as a unique organic functional drink while striving to reinforce the company’s status as the leader in innovation and successful product launches. Success will be seen by the market shares captured within the market, the strategy is to break into the healthy energy drink market and carry the company to the top spot as the market leader in the healthy functional drink segment. Coca-Cola: The Coca-Cola Company started out as a one man business and over the last one hundred and ten years it has grown into one of the largest companies in the world. Coca-Cola was invented by Dr. John Pemberton, an Atlanta pharmacist. He concocted the formula in a three legged brass kettle in his backyard on May 8, 1886. Coca-Cola debuted in Atlanta's largest pharmacy, Jacob's Pharmacy, as a five cent non-carbonated beverage. Carbonated water was added to the syrup to make the beverage that we know today as Coca-Cola. The Coca-Cola Company is the world's largest bottler of liquid nonalcoholic refreshment in which they produce, market, and distributes their products in nearly 200 countries throughout the world. The world's largest soft drink company, Coca-Cola...
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...Faculty of Business Studies Tutor Marked Assignment B202 A: Understanding Business Functions I First Semester 2011 – 2012 This tutor-marked assignment consists of two parts each of which consists of a set of questions that are based on a case study. This assignment will be graded out of a 100 and is worth 20% of the total grade assigned to the course. Out of the 100 marks, 84% will be divided equally between the two questions, that is, 42 marks for each case study. The remaining 16% will be distributed equally as follows: presentation of ideas and organization of the answer, adherence to specified word count, proper referencing and use of the E-library. In this TMA, you are expected to demonstrate your knowledge and understanding of some of the major issues in human resource management and marketing. The first case study focuses on motivation whereas the second one is concerned with the marketing mix of marketing. Prior to answering the questions, read each case study thoroughly and carefully. In your answer, you are expected to show your analytical skills of the subject matter. Your answer should be within the specified range of words, and you must follow the Harvard Style of Referencing. You are expected to present a well structured and organized piece of work that is of your own. Plagiarism will be penalized by deduction of marks. The right use of outside sources and personal examples is highly appreciated and will be rewarded. PART A Building a better workplace...
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