BizBoomers

Livewell Inc.

Contents:
Executive Summary
1

3
4

General Company Description

1.1 Company Overview
1.2 Mission & Vision
1.3 Strength & core Competency
1.4 Challenges
Marketing Plan
2.1 Marketing Description
2.2 Market Fact
2.3 Market Growth
2.4 Market opportunities
2.5 Market Analysis
2.6 SWOT Analysis
2.7 Marketing Mix
2.8 Branding
2.9 Marketing Objective
2.10
Marketing Strategy
2.11
Marketing Budget
Operational Plan
Financial Plan
4.1 Start-up Expenses
4.2 Revenue Forecast
4.3 Profit & loss Projection
4.4 Cash Flows
4.5 Projected balance Sheet
4.6 Loan Amortisation
4.7 Breakeven Analysis
References

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

*All values are in `

Expected revenue:

Revenue Forecast
30000000
20000000
10000000
0
Year 1

Year 2

Year 3

Year 4

Year 5

*All values are in `

Expected Profit:

Net Profit
15000000
10000000
5000000
0
-5000000
*All values are in `

Year 1

Year 2

Year 3

Year 4

Year 5

1.1 Company overview:

LiveWell Inc. is a fitness center combined with the health bar which is the uniqueness of
the facility. It also provides inhouse doctors and physiotherapists on need basis. The
company also make available unique membership card which allows the member to use
the gym facility in all of its outlets, this is to tap the business men market.
1.2 Mission and Vision
Healthy today for a better tomorrow is the company motto and the company is bound
to provide quality health and fitness services to its customers.
1.3 Strengths and core competence
a) Unique membership card.
b) Health bar with expert advice.
c) Has the ability to tap wider consumer base.
1.4 Challenges
a) To maintain the quality of services uniform in all the outlets
b) To control the costs so to ensure wider coverage of the consumer base.
c) Competition from local and established names such as Talwalkars, Mickey
Mehtas 360, Golds Gym etc.

2.1 MARKET DESCRIPTION:

The Healthcare sector, in India, is at an inflection point and is poised for rapid growth in
the medium term. However, Indian healthcare expenditure is still amongst the lowest
globally and there are significant challenges to be addressed both in terms of
accessibility of healthcare service and quality of patient care. While this represents
significant opportunity for the private sector.

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

often an important consideration. They have various problems ranging from

spondilyosis, to posture and stress-related issues
Pune and Bangalore are also fast emerging as Indias fitness capitals and can probably
boast of the largest number of premium gyms and fitness centres in the country. The
large numbers of IT companies in these cities with their fitness-conscious employees
are obvious targets of the gyms. They have high pressure jobs and travel a lot.
Corporates, on their part, are today very conscious about employees health and fitness
issues.
2.2 MARKET FACT:
Health wellness and Fitness market is still a fragmented industry with diverse players
such as health clubs, gyms and trainers. But the average urban Indian professional is
increasingly becoming health conscious and feeling the need to get into a fitness regime
and often not finding the right place to go to and the right people to teach them.

Following are some facts on Health club members,

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 income of the health club members is anywhere between Rs 75,000 to

Rs 1.4 lakh and they spend Rs 1,500 to Rs 3,000 monthly.

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

Up-Market Club in this category has a penetration of a mere 0.1%.

2.3 MARKET GROWTH:

Various demographic factors are expected to bring about increased healthcare and
wellness awareness coverage in India which are expected to drive the growth of the
Healthcare and wellness market. These demographic factors are,

2.4 MARKET OPPORTUNITIES:

Health care club industry offers a huge lot of opportunities for existing and
potential investors. Marketing is growing for many reasons, some of them are following:

More than 30 million Indians are affected by Obesity (75% of Indian women and
58% of Indian Men are Obese)

45 million of Indians are projected to be affected by cancer at the end of 2015.

65 million of Indians are projected to be affected by cardiovascular disease by

2015.

20% of Indian children are obese of overweight.

17% of children in the basket of 14 17 age groups are obese or overweight.

With increasing urbanization and the problems associated with modern-day living
in urban settings, the disease profiles are shifting from infectious to lifestylerelated

2.5 MARKET ANALYSIS:

2.6 SWOT ANALYSIS:

2.7 MARKETING MIX:

Fitness Plus health clubs marketing mix is based on the following factors of
product, cost, distribution, advertising and publicity.

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

Total Investment required

Start up expenses
Health club development

`1,75,00,000

Personnel

`60,00,000

Capital Expenditures

`1,50,00,000

Consulting Services

`20,00,000

Promotion

`1,00,000

Total Start-up Expenses

`4,06,00,000

Start-Up Expenses
18000000
16000000
14000000
12000000
10000000
8000000
6000000
4000000
2000000
0
Health club
development

*All values are in `

Personnel

Capital
Expenditures

Consulting
Services

Promotion

4.2 Revenue Forecast:

Sales Forecast
Year 2
Year 3

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

*All values are in `

Revenue Forecast
30000000
25000000
20000000
15000000
10000000
5000000
0
Year 1

Year 2

Year 3

Year 4

Year 5

Profit & Loss Projection

Year 1
Year 2
Year 3

Year 4

*All values are in `

4.3: Profit & Loss Projection

Revenue
Health Club Membership

11250000

14062500

Year 5

17578125 21972656.3 27465820.3

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

*All values are in `

Operating Expenses
16000000
14000000
12000000
10000000
8000000
6000000
4000000
2000000
0
Year 1

*All values are in `

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

*All values are in `

4.4: Cash Flow:

Cash Flows
Cash Received
Cash from operations
Sales
Account receivables
Total cash from
operations
Cash from Financing
Long Term Liabilities
Expenditures
Personnel
Consulting Services
Promotion
Operation Expenses
Additional Cash Spent
Taxes
Principal repayment

16250000
0

20312500
0

25390625 31738281.3 39672851.6

0
0
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

2430421.875 4243611.09 6869110.99

9800000
9200000
8600000

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

*All values are in `

4.5 Projected Balance Sheet:

Projected Balance Sheet
EOY 1
EOY 2
EOY 3

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

*All values are in `

4.6: Loan Amortization

Loan amount pay back in 10 years with 12% interest rate
year

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

*All values are in `

4.7: Break-even Analysis

We have breakeven with CAGR of 25% after 6 years. Refer the following table.

Year 1

Profit & Loss Projection

Year 2
Year 3
Year 4

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

Profit Before taxes

-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

Profit After Tax

-300000

Total Retained income

-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/