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Livewell Inc.
Contents:
Executive Summary
1
3
4
Executive Summary
1. LIVEWELL INC will provide quality health and wellness service centres. The
service centre is focused towards upper middle and business class.
2. Will employ and train experienced workforce.
3. Indian healthcare boom due to change in lifestyle.
4. Fitness industry valued at 2500 Crore INR
5. Big Gap between organized healthcare demand and supply
6. Relatively new industry so first mover advantage for the company
7. Increasing awareness, obesity and heart disease are the driving forces for
market growth.
8. 50 million Indians with disposable income ranging from 200,000 to 1,000,000
rupees per year ($4,166-$20,833).
9. Our USP of unique membership card will allow us to tap the business moving
class. So business can also become B2B, where other organizations can buy
health schemes for employees.
10. Very small number of organized competitors
11. Concept of health bar integrated with the fitness centre is new to the industry so
its end results are unknown
Highlights
Startup Expenses:
Start-Up Expenses
20000000
15000000
10000000
5000000
0
Health club Personnel
Capital
Consulting
development
Expenditures Services
Promotion
Revenue Forecast
30000000
20000000
10000000
0
Year 1
Year 2
Year 3
Year 4
Year 5
Net Profit
15000000
10000000
5000000
0
-5000000
*All values are in `
Year 1
Year 2
Year 3
Year 4
Year 5
Stretch, jog, pump iron and get on the treadmill is an integral part of the modern
metropolitan mantra. In recent years, the fitness industry in India is seeing a paradigm
shift with the change in middle- and upper-class lifestyles in small but significant ways;
for instance, earlier, one used to walk to the local marketplace, now one drives to the
malls. So people are now feeling the need to set aside a time for dedicated exercising.
Even our role models have become leaner and tougher. Now, people are aspiring for
complete wellness rather than just staying fit. With surging work pressure and stress
related ailments rampant amongst the corporate crowd, there is a need to increase the
value and necessity of being fit and healthy in life. Also, due to diseases, increasing
pollution in metro cities like Mumbai, Delhi and others, today wellness is becoming the
must factor for everyone. The average urban Indian professional is increasingly
becoming health conscious and feeling the need to get into a fitness mode.
It is projected that Indian fitness industry will rise on the graph annually by 20 to 30%.
The fitness industry in India valued at anything between a whopping Rs 2,900 crore
and a more modest Rs 300 crore. In fact, its still a fragmented industry with diverse
players such as health clubs, gyms and trainers. For corporate executives, health is
The number of people using health clubs in India currently stands at 0.23 million,
60% male members and 40% female members.
Fitness conscious members of age 20-35 years majorly constitutes about 65% of
total members
Annual fee of the fitness centers vary from Rs 10,000- 36,000 per annum.
Although there is a sharp increase in health club usage, people dropping out of
membership on a monthly basis in India is estimated to be 3% to 5% of the total
number of members
More than 30 million Indians are affected by Obesity (75% of Indian women and
58% of Indian Men are Obese)
With increasing urbanization and the problems associated with modern-day living
in urban settings, the disease profiles are shifting from infectious to lifestylerelated
2.8 BRANDING:
Livewell will create their official website for creating a brand and company image
in the market, as well as providing subscription online. (www.LIVEWELL.com)
2.9 MARKETING OBJECTIVES:
Livewell will focus on creating a brand image in the healthcare and wellness
industry. They will participate in the major events of health care awareness and
education programs.
2.10 MARKETING STRATEGY:
Livewell will start by targeting high income segment of metro cities like Delhi,
Bangalore, Pune, Mumbai and Chennai. And target the demographic group of Middle
aged (30-50) and adult group (15-25). Livewell will convince people about the benefits
and needs of wellness programs. This will be accomplished by aggressively pursuing
interaction and relationships with peoples in public health awareness programs and by
sending newsletters and emails through website.
2.11 MARKETING BUDGET:
Livewell has allocated `1,00,000 for marketing in the year 2013. This budget will
be used for advertising on newspaper, television, Social Media, Radio (FM) and printing
brochures.
3 Operations:
Tasks identified for the erection of health and wellness centre:
Basic
health and
nutritional
plans
developme
nt
1
1
1 month
Market
study for
the plans
and health
bar
2
Choosing a
location
based on
market
research
Training of staff,
Identifying
collaborating
doctors and
physiotherapists
2
3 months
FINAL ROLLOUT
4
Launch of
the facility
in four
metropolit
an cities
Advertising
for the
health club
and bar
3
2 months
3 months
6
1 month
3 months
5
Note: Time durations are average times required for the tasks mentioned and may vary.
Choosing a location: The locations chosen initially are urban metropolitan areas of
India, viz Mumbai, Delhi, Kolkata and Chennai. These locations already have a
presence of chains like Talwalkars, golds and fitness first. The location advantage is
that upper middle class and business class can take the use of these facilities on the go
with membership card.
Legal Environment: No legal barriers, but a shop/ business license has to be obtained
from the respective city councils.
Personnel: Initial requirement of 6(2 shifts) trainers per facility with inhouse doctors on
need basis.
Bankers: ICICI ventures, SBI, CBI, IndusInd bank
Managerial structuring:
Area head
Manager per branch
Operation timings Proposed:
15 hrs a day- 5am to 8 pm
Trainers
Financial Plan
4.1 Startup Expenses:
The Start-up expenditures for Livewell Inc is Summarized below:
Start-up expenses
`5,00,00,000
`1,75,00,000
Personnel
`60,00,000
Capital Expenditures
`1,50,00,000
Consulting Services
`20,00,000
Promotion
`1,00,000
`4,06,00,000
Start-Up Expenses
18000000
16000000
14000000
12000000
10000000
8000000
6000000
4000000
2000000
0
Health club
development
Personnel
Capital
Expenditures
Consulting
Services
Promotion
Year 1
Health Club membership
Year 1 (2500)
Year 2 (3125)
Year 3 (3906)
Year 4 (4883)
Year 5 (6104)
Others:
Health Bar
Total Revenue
Year 4
Year 5
6250000
7812500
9765625
12207031.3
15258789.1
5000000
11250000
6250000
14062500
7812500
17578125
9765625
21972656.3
12207031.3
27465820.3
Revenue Forecast
30000000
25000000
20000000
15000000
10000000
5000000
0
Year 1
Year 2
Year 3
Year 4
Year 5
Year 4
Revenue
Health Club Membership
11250000
14062500
Year 5
Health Bar
Total Revenue
Operating expenses
Health club development(Land)
Health club
development(Building)
Personnel
Capital Expenditures
Consulting
Promotion
Total Operating expenses
Interest expense@12%
Profit Before taxes
Taxes @ 30%
Surcharge on Tax @ 5%
Profit After Tax
5000000
16250000
6250000
20312500
950000
950000
7812500
9765625 12207031.3
25390625 31738281.3 39672851.6
950000
950000
950000
6000000
8000000
1650000
1815000
2000000
2000000
110000
110000
10710000
12875000
5400000
4800000
4202500
7715625
1260750
2314687.5
63037.5 115734.375
-300000 2878712.5 5285203.125
9000000
1996500
2000000
120000
14066500
4200000
13471781.3
4041534.38
202076.719
9228170.16
9000000
2196150
2000000
120000
14266150
3600000
21806701.6
6542010.47
327100.523
14937590.6
6000000
1500000
2000000
100000
10550000
6000000
-300000
Operating Expenses
16000000
14000000
12000000
10000000
8000000
6000000
4000000
2000000
0
Year 1
Year 2
Year 3
Year 4
Year 5
Net Profit
16000000
14000000
12000000
10000000
8000000
6000000
4000000
2000000
0
-2000000
Year 1
Year 2
Year 3
Year 4
Year 5
16250000
0
20312500
0
16250000
20312500
25390625 31738281.3
39672851.6
50000000
6000000
2000000
100000
8100000
6000000
2000000
110000
8110000
0
11000000
1323787.5
10400000
8000000
2000000
110000
10110000
9000000
2000000
120000
11120000
9000000
2000000
120000
11120000
Other Liabilities
Long-term assets
Land & Building
Total cash Spent
Net Cash Flow
15000000
1650000
17500000
51600000 21483787.5
14650000 -1171287.5
1815000
1996500
2196150
24155421.88 26560111.1
28785261
1235203.125 5178170.16 10887590.6
BOY1
Current assets
Cash
Prepaid Interest
Expense
Fixed Assets
Land
Building
Training Machines
less: Accumulated
Depreciation
Total
Liabilities & Equity
Current Liabilities
Accounts Payable
(Interest)
Long -term Debt
Owners Equity:
Retained Earnings
Total Liabilities &
Equity
EOY 4
50000000
14650000
13478713
14713916
19892086
30779676
300000
795000
1521000
2519250
8000000
9500000
15000000
8000000
9500000
16500000
8000000
9500000
18150000
8000000
9500000
19965000
8000000
9500000
21961500
-2450000
-5200000
-8295000
-11786000
-15730750
50000000
44700000
42578713
42863916
47092086
57029676
50000000
45000000
40000000
35000000
30000000
25000000
-300000
2578713
7863916
17092086
32029676
44700000
42578713
42863916
47092086
57029676
50000000
loan
1
2
EOY 5
50000000
45000000
interest
6000000
5400000
interest
Total payable
expense
5000000
6000000
11000000
5000000
5400000
10400000
loan expense
3
4
5
6
7
8
9
10
40000000
35000000
30000000
25000000
20000000
15000000
10000000
5000000
4800000
4200000
3600000
3000000
2400000
1800000
1200000
600000
5000000
5000000
5000000
5000000
5000000
5000000
5000000
5000000
4800000
4200000
3600000
3000000
2400000
1800000
1200000
600000
9800000
9200000
8600000
8000000
7400000
6800000
6200000
5600000
Year 1
Year 5
Revenue
Health Club
Membership
1125000
0
1406250
0
17578125
21972656.
3
Health Bar
5000000
6250000
7812500
9765625
Total Revenue
1625000
0
2031250
0
25390625
31738281.
3
27465820.
3
12207031.
3
39672851.
6
Year 6
0
0
0
Operating expenses
Health club
development(Building)
Personnel
Capital Expenditures
Consulting
Promotion
Total Operating
expenses
Interest expense@12%
950000
950000
950000
950000
950000
950000
6000000
1500000
2000000
100000
1055000
0
6000000
6000000
1650000
2000000
110000
1071000
0
5400000
8000000
1815000
2000000
110000
9000000
1996500
2000000
120000
9000000
2196150
2000000
120000
9000000
2415765
2000000
120000
12875000
14066500
14266150
14485765
4800000
-300000
4202500
7715625
Taxes @ 30%
1260750
2314687.5
Surcharge on Tax @ 5%
63037.5
115734.375
2878712.
5
2578712.
5
5285203.12
5
7863915.62
5
4200000
13471781.
3
4041534.3
8
202076.71
9
9228170.1
6
17092085.
8
3600000
21806701.
6
6542010.4
7
327100.52
3
14937590.
6
32029676.
4
3000000
32105299.
5
9631589.8
4
481579.49
2
21992130.
1
54021806.
5
-300000
-300000
5 References:
1. http://www.state.gov/r/pa/ei/bgn/3454.htm
2. "India facing obesity epidemic: experts". The Hindu. 2007-10-12
3. Third National Family Health Survey. Mumbai: International Institute for Population
Sciences. 2006.
4. http://italiaindia.com/images/uploads/pdf/fitness-industry-in-india-profile-2009.pdf
5. http://articles.economictimes.indiatimes.com/2012-02-21/news/31083032_1_
projection-auto-sector-salary
6. http://www.franchiseindia.com/magazine/2008/october/Fitness-industry-shapingup_44-2-1/