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1.0 Executive Summary
The purpose of this business plan is to raise and examine the allocation of $5,000,000 for the development of a tennis club based in Los Angeles, California. Tennis Club, LLC (“the Company”) was founded by Michael Yoder who will serve as the Managing Director. In addition to having numerous tennis courts, the business will feature a full restaurant and spa. This will be a membership-based club.
1.1 The Services
The location will feature twenty tennis courts for member use. In regards to membership, the business will charge a base fee of $300 per month for access to the facility. All members will be provided with a locker. The club will frequently host tournaments and events.
The business will also feature an onsite restaurant and bar. At this time, the Founder is seeking an executive chef that will create the Company’s standard menu as well as seasonal specialties. The business will have a full liquor license.
The operations of Tennis Club, LLC will be further discussed in chapter three of this document.
1.2 Financing
At this time, the Company is seeking an aggregate of $5,000,000 ($4,000,000 of debt and $1,000,000 of equity). The terms of the equity investment are to be determined during negotiation. This document assumes that the business will receive a 20-year loan carrying a 7% interest rate on the debt capital. The funds will be primarily used for the following:
• Courts and location development in Los Angeles
• Professional fees and licenses (including the liquor license)
• Working capital
• Furniture, fixtures, and equipment
On an as needed basis, the Company could easily acquire a working capital line of credit in order to further manage the business’ operational expenditures. This document assumes that the Company will finance any growth with the retained earnings of the business.
1.3 Mission Statement
Tennis Club, LLC’s mission is to provide an outstanding membership-based tennis club experience to the general public of Los Angeles.
1.4 Management Team
As stated above, Tennis Club, LLC was founded by Michael Yoder. He has twenty years of experience managing country clubs and sporting facilities.
1.5 Sales Forecasts
1.6 Expansion Plan
By the third year of operation, Management expects that the Tennis Club will operate at 100% capacity. At this time, the Founder may seek to develop additional locations (at least 20 miles from the Company’s initial facilities).
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Tennis Club, LLC. The business is registered as a limited liability company in the State of California.
2.2 Required Funds
An aggregate of $5,000,000 will be needed to acquire the land and develop Tennis Club’ s facilities. The breakdown of how this capital is to be used is as follows:
2.3 Investor and Management Equity
Management is currently developing a private placement memorandum that addresses these matters.
2.4 Exit Strategies
Tennis Club, LLC will generate highly recurring streams of income from its membership operations as well as food and beverage sales. Based on the anticipated profitability of the business, the Company could receive a sales premium of 10 times the previous year’s earnings. This transaction would include real estate. The sale of the club is not expected to occur for a substantial period of time.
3.0 Tennis Club Operations
The Tennis Club facilities will feature numerous amenities that will drive an immense membership base from the onset of operations. The twenty courts will be available for member use. There will be no fees for using the courts outside of the standard monthly membership fee. The business will use reservation software in order to ensure that all members have proper access to the courts. In addition to courts, the business will have a pro shop where athletic apparel and products specific for tennis can be purchased.
The Company will have two pros on staff that will render instruction services. This will be a high margin revenue stream for the business. Moving forward, these tennis professionals will also host clinics and introductory programs for younger players.
As it relates to the restaurant and bar, the business will offer a casual dining experience. The menu will change frequently in order to keep members coming back. The business will hire a qualified executive chef in order to handle all matters related to the kitchen and bar. The business will maintain a full liquor license. The bar will feature an expansive wine list coupled with numerous beers sourced from microbreweries from around the country. All food and beverage sales will incur additional costs.
The Company will also host large events including weddings, personal events, and corporate events. These operations will be available to members of the general public. Tennis Club, LLC will partner with numerous event planners throughout the greater Los Angeles market in regards to these operations.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
At this time, the economy is doing well. Despite higher interest rates and inflation, unemployment rates have remained low. As a result of the monetary policies implemented by the Federal Reserve and other central banks, the rates of inflation are declining as are interest rates.
It should be noted that any issues with the economy will not impact the Company’s ability to remain profitable. Tennis Club, LLC is targeting upper-middle to upper income people as its primary membership base. These individuals are less swayed by negative changes in the economy.
4.2 Industry Analysis
There are 3,400 companies that operate one or more tennis club facilities. Each year, these businesses aggregately generate $4 billion of revenue while employing 22,000 people. Approximately 50% of these entities operate in a not-for-profit capacity.
The growth of this industry is expected to remain similar to that of the economy as a whole.
4.3 Customer Profile
The following profile of prospective members will be used during the course of marketing operations:
• Annual household income exceeding $100,000
• Will spend $5,000 to $6,000 per annum at Tennis Club (including both membership and food and beverage sales)
• Lives within 10 miles of the location
Here you can discuss the reasons why your specific market would allow your tennis club to remain economically viable at all times. You can discuss the median/average household incomes of your market, median home value (as an indicator of wealth), percentage of people that hold professional degrees, as well as other attributes that are specific to your target market.
4.4 Competition
As with most wealthier market areas, there are usually a number of other tennis clubs and country clubs that offer tennis courts. Here, you will need to list the ways in which your tennis club will be able to effectively differentiate itself from other competitors in the market. In this document, the integration of a restaurant and unique bar serves as the primary differentiating factor. You can further discuss the attributes of your specific business and how it will thrive in your respective market.
5.0 Marketing Plan
The Company will use many marketing strategies in order to ensure that the business has a substantial membership base. It should be noted that Tennis Club, LLC will enact a substantial portion of its marketing plan prior to the launch of the facility in order to ensure that people are enrolled as members prior to the grand opening.
5.1 Marketing Objectives
• Effectively brand Tennis Club, LLC as one of the preeminent places in the Los Angeles market.
• Launch an expansive online presence that includes heavy use of social media to promote enrollment.
• Maintain referral relationships with real estate brokerages and agents.
5.2 Marketing Strategies
Given the level of competition that Tennis Club, LLC will face as it establishes its operations, the Company will work with a qualified marketing firm in order to effective establish the brand in this market. This firm will workplace advertisements in regional lifestyle magazines while concurrently engaging in public relations campaigns. As stated above, these operations will commence prior to the launch of the club in order to have members pre-enrolled.
The Company’s website will feature a content rich experience including video walkthroughs of the facilities as well as interviews with Management and the club’s tennis pros. This website will be search engine optimized specifically for the Los Angeles market. On a regular basis, the platform will be updated to include new information about the club, upcoming events, and other gatherings. For members, reservation functionality will be integrated into the website so that they can properly reserve courts.
The business, for event operations, will also work with regional event planners that will have their clients host events at the facilities. As this will be a major secondary profit center for the business – Management sees a substantial opportunity to foster these referral relationships In furtherance of the Company’s referral operations, the Company will distribute advertisements to real estate brokerages that will recommend the club to people that have recently moved to Los Angeles and have an interest in tennis.
The Company will frequently host open house events during the course of the first three years of operation in order to create interest among prospective members. These events will be hosted once every quarter. It will also provide an opportunity for existing members to introduce their friends to the club, who may become members in turn.
6.0 Organizational Plan and Personnel Summary
6.1 Corporate Organization
6.2 Payroll
7.0 Financial Plan
7.1 Underlying Assumptions
• Tennis Club, LLC will acquire $4,000,000 of debt and $1,000,000 of equity.
• The Company will generate highly recurring streams of revenue from its membership operations.
7.2 Sensitivity Analysis
Tennis Club’s revenues are only moderately sensitive to negative changes in the economy. The demand for these types of facilities within this market is substantial given the high incomes and significant population density. The Company will have highly controllable fixed operating costs that will further ensure that the business is able to remain profitable while servicing its debt obligations.
7.3 Source of Funds
7.4 Profit and Loss Statement
7.5 Cash Flow Analysis
7.6 Balance Sheet
7.7 Breakeven Analysis
7.8 Business Ratios
