CrossFit Silicon ValleyTeam W

Chris CedroYupeng GaoKyle KaidoBob Wang

What is CrossFit?

• CrossFit is a strength and conditioning system that combines Olympic weightlifting, gymnastics, sprints, and functional movements with little time to rest between sets.

• Designed for scalability, allowing it to be applicable to individual regardless of experience.

• Police and fire departments, as well as branches of the military are basing more and more of their physical training on the CrossFit methodology.

CrossFit Silicon Valley (CFSV)

• Founded in 2007

• 9 Coaches = 76 years of combined fitness experience and 15 years of CrossFit experience.

• (2) Level Two certified trainers

• Classes per week: 42

• Current membership: ~100

CFSV Positioning Map

High ModerateService Service

Expensive

Less Expensive

Specialty Gym

CrossFit Silicon Valley

24-Hr Fitness

Bally's Fitness

Golds Gym

At-home fitness

CFSV’s Current Situation

• Membership growth is flat.

• Basic marketing program or strategy.– Word of mouth

– Membership discount on pre-paid months

CrossFit for Kids Sports Specific Program Mobile Fitness Program

CFSV Total Addressable Market

Company Initiatives to lower Health Care Costs

Source: http://www.healthylife.com/template.asp?pageID=75

CFSV Strategies

•CrossFit for Kids- Requires CrossFit Kids certificated trainers

- Requires displace a regular class

•Sports Specific Program-Contradict with CrossFit’s philosophy

- Requires specialized trainer

CFSV Strategies

•Mobile Fitness Program

- Can utilize existing trainer staff

- Wouldn’t conflict with existing classes

- It is a viable standalone business

- Leverage CrossFit Mobile as a marketing tool to create CFSV brand awareness

- Leverage CrossFit Mobile to convert new members to core business at the gym

Marketing Strategy

Price 8 sessions / $70

Placement Small businesses with 100 - 1000 employees within a 5 mile radius of CFSV

Promotion 1st class is free for trial

Product Health and fitness

People CFSV employs 9 certified trainers

Physical Environment

Outdoors on company parking lots. Area of 5-7 empty parking spaces is required

Marketing Strategy

Hook thetrailer

Clientsstretch and

warm up

Workout ofthe day

Cool down / Stretch

Leave fornext

location

Skilldevelopment

Drive tolocation

Trainersassistthose

struggling

CFSV Service Flowchart

Implementation Timeline

Months

3 4 50 12

Implementation

Companies• Sanmina Corporation• Bell Microproducts• Iron Mountain• Synaptics

Traits• 100 - 1000 employees• Within 5-mile radius of CFSV

Implementation

• Value Proposition– Happier and healthier employees– Increased productivity– Lower absentee and health insurance costs

• Concerns– Down economy– Potential injuries

Mobile Conversions

• Conversions drive growth at current CrossFit facility• Success is dependent on company and employee

participation rates.

• Conversions drive growth at current CrossFit facility• Success is dependent on company and employee

participation rates.

Year 1 Year 2 Year 3# of Companies 4 5 6Avg Company Size (Employees) 500 500 500% Participation Rate 15% 15% 15%Total # of Employees Participating 300 375 450 "Potential Customers"

Member Conversion Rate 10% 10% 10%Expected Member Conversions 30 38 45

Income StatementYr 0 Yr 1 Yr 2 Yr 3

Revenues:Classic Members 150 158 165 174 5% growth

Classic Membership Revenue $270,000 $283,500 $297,675 $312,559 $150/member

CrossFit Mobile Conversions 0 30 38 45CrossFit Mobile Conversion Revenue $0 $54,000 $67,500 $81,000

Total Members 150 188 234 291Total Membership Revenue $270,000 $337,500 $421,875 $523,969

CrossFit Mobile Revenue $0 $32,172 $40,215 $48,258Total CrossFit Revenue $270,000 $369,672 $462,090 $572,227

Operating Expenses:Cost of Goods Sold

Labor $54,000 $73,934 $92,418 $114,445OH $27,000 $36,967 $46,209 $57,223Equipment, maintenance, etc $8,100 $11,090 $13,863 $17,167CrossFit Mobile Total Op Ex $0 $14,185 $18,641 $23,369

Total Cost of Goods Sold $89,100 $136,177 $171,130 $212,204

Gross Margin $180,900 $233,495 $290,960 $360,023Gross Margin % 67.0% 63.2% 63.0% 62.9%

Other Expenses:Building lease $40,500 $55,451 $69,314 $85,834Accounting, etc. $27,000 $36,967 $46,209 $57,223Marketing $13,500 $18,484 $23,105 $28,611CrossFit Mobile Other Expense $14,800 $4,728 $14,710 $7,093

Total Other Expenses $95,800 $115,630 $153,337 $178,761

Operating Income $85,100 $117,865 $137,622 $181,262Operating Margin % 31.5% 31.9% 29.8% 31.7%

Source: CrossFit Silicon Valley

Income Comparison

• Bottom line growth a result of increased full-time memberships.

• Bottom line growth a result of increased full-time memberships.

How to Measure Success:

• Session Frequency– Need to keep sessions at 8 per week

• Employee Participation Rate (15%)

• Conversion Rate (10%)– Mobile participants to CFSV

• Operating Margin– Control expenses

– Separate Mobile from Classic

Thank You

Questions???