Start up expenses:

To start the gym, the initial total investment required is $162,544.55EC. This figure includes all operational costs for the first month, including equipment costs, legal fees for drafting partnership contracts, business registration fees, renovation costs for painting the space and installing fixtures, mirrors, front desk etc. This figure also includes all operational costs for the next six months which is comprised mostly of rent and salaries. Between January and June 2022, the gym is expected to generate a loss since it is a new entity and therefore the partners have found it necessary to have enough capital on to cover the expenses for these months. To attain a loan from the National Bank of Dominica Ltd, at least 10% equity and 20% collateral is required. Therefore, all five partners have come to the agreement to each invest $18,000 EC. Cumulatively, equity in the business would be $90,000. This equity will fully cover the cost of equipment ($58,544.28c) which will then be used to secure an $80,000 loan from the bank. An excess of $7,455.45 would be available if the loan is approved for the full amount. These excess funds will be used to cover unforeseen expenses.

Notes:

- Gym membership is $270EC a month

- Gym operates 5am 9pm - Monday to Saturday

- Bottle of water is $2.68c each

- Case of water = $50ec

- Employees:

Part time

o Yoga instructor teaches 3 classes a week (beginners, intermediate, advance yoga) = Salary per class = Paid $60 per class = $720 a month

o Pilates instructor = teaches 2 classes a week @ same rate as yoga instructor = $480 a month

o 2 Spin class instructors(morning and evening instructors) = teaches morning= 3 days a week @ above rate = $1440 a month (cumulatively)

o Bootcamp instructor = 3 days a week = 720

o 4 front desk operators/ weight room operators/Sauna operators = 2 shifts, 6 days a week 5am -1pm and 1pm-9pm Paid $400 a week

- Corporate tax rate for Dominica is 25%

- Each class will have 15 students

- Equipment:

o 16 yoga mats

o 16 exercise balls

o 4 treadmills

o 3 elliptical machines

o 16 spin bikes

o 20 dumbells (per type)

o 2 total gyms

o 2 stair climbers

Assumptions

Income Statement

Prepare the Balance sheet for three years in advance for the new venture.

Item Revenue Cost of Revenue EXPENSES Rent Advertising & Promotion Depreciation & Amortization Interest expenses Maintenance Office Supplies Salaries, Benefits & Wages Taxes Miscellaneous Utilities Software Expense Assumption Revenue will grow at a rate of 15% a month for the first year then increase at a rate of 25% a year for the next two years. Increases at the same rate as revenue The first and last month's rent must be paid upfront Advertising cost remains fixed. Depreciation and amortization of the gym equipment and the computer/other electronic devices will be done on a straight-line basis. The lifespan of the equipment will be estimated at 12 years with no salvage value while the lifespan of the computers was 10 years with no salvage value Interest rate is 4% and the loan period is 5 years Fixed amount Office supplies are purchased every 6 months Wages and salaries are expected to remain unchanged. Based on the corporate tax rate in Dominica at 25% Fixed amount Utilities are expected to increase in line with revenue Software payment is a one-time payment Revenue Gym Membership Sales Sauna Rental Monthly fitness in nature cla Bottle water sales Total Revenue Cost of Goods Sold Materials Gross Profit Operating Expenses Wages Rent Utilities expense Registration Expense Advertising Expense Equipment Insurance Expens Liability Insurance Rennovtion Expense Software Expense Depreciation expense Equipment Expense Supplies Expense Interest Expense (4%) Other operating expenses Total operating expenses Earnings before taxes Income tax (25%) Net Income Qegal Expenses JAN 6750 3:00 450 25.8 7525.8 50 7476.8 9760 5360 1000 2413.61 70 3:00 200 100 6700 67 532.94 58554.28 134 33.22 200 85425.04 -77948.24 0 -77948.24 Feb 7762.5 345 517.5 32.16 8557.15 60 8597.16 9760 2680 1150 0 0 March April May June July Aug 8926.88 396.75 595.13 38.59 9957.34 10265.91 11805.79 13576.66 15613.16 456.26 524.7 603.41 693.92 684.39 787.05 905.11 1040.88 46.31 55.57 66.69 80.02 11452.87 13173.12 15151.87 17427.98 72 86.4 9885.34 11356.47 103.58 13069.44 124.42 149.3 15027.45 17278.68 9760 9760 9750 2680 2680 2680 1322.5 1520.88 1749.01 0 0 9760 2680 2011.36 0 0 0 0 0 0 300 300 200 200 100 100 0 0 67 532.94 0 0 33.22 200 15622.15 -2552.72 0 -2552.72 300 300 200 200 100 100 0 0 67 532.94 67 532.94 0 0 0 0 33.22 200 15023.15 33.22 200 15195.55 -6425.99 -5310.31 0 0 -6425.99 -5310.31 300 200 100 0 67 532.94 0 0 33.22 200 15394.03 -4027.56 0 -4027.56 Sep 17955.13 798.01 1197.01 96.03 20046.18 179.15 19867.02 9760 9760 2680 2680 2313.06 2660.02 0 0 0 300 300 200 200 100 100 0 67 532.94 0 0 67 67 532.94 532.94 0 0 134 0 33.22 33.22 33.22 200 200 200 15884.51 16320.21 165.33.17 0 -857.06 0 -857.06 958.47 0 958.47 3333.85 0 3333.85 Oct Nov Dec FY 2022 Year (FY 2023 Year (FY 2024 Year 20648.4 917.71 1376.55 115.24 23057.91 23745.66 27307.51 31403.64 195761.25 244701.57 305875.95 1055.35 1213.67 1395.72 8700.5 10875.63 13594.53 1583.04 1820.5 2093.58 13050.75 16313.44 20391.8 138.28 165.94 199.13 1060.76 1325.95 1657.43 26522.35 30507.52 35092.06 218573.25 273216.58 341520.72 214.99 22842.92 257.99 309.59 26264.37 30198.03 371.5 34720.56 1979.03 215594.24 2473.78 270742.8 3092.23 338428.5 117120 32160 45315.11 C 0 3600 300 300 300 3600 300 200 200 200 200 2160 1944 100 100 100 1200 9760 9760 9760 9760 117120 117120 2680 2680 2680 2680 34840 32160 3059.02 3517.88 4045.56 4652.39 29001.67 36252.08 0 0 0 0 2413.61 0 0 0 0 70 0 3600 2400 100 1200 1200 0 6700 0 67 804 804 532.94 6395.23 6395.23 0 58554.28 0 268 268 268 33.22 398.61 398.61 398.61 200 2400 2400 2400 18525.54 266165.4 202757.92 211604.94 0 67 532.94 0 67 532.94 0 0 0 67 532.94 0 804 6395.23 0 0 33.22 200 0 0 33.22 33.22 200 200 17918.71 16932.18 17391.03 5910.74 8873.34 1477.58 2218.33 4433.05 6655 12279.32 3069.83 9209.49 16195.01 -49571.16 67984.87 126823.55 4048.75 10814.5 16996.22 31705.89 12145.26 -60385.76 50988.65 95117.66