UAMS Health and Wellness Center Business Plan NEW

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UAMS Northwest Health & Wellness Center

Business Plan

Health and Wellness CommitteeLiz Bausinger, Sue Grant, Russell Hill, Cathy Irwin, Missy Raley, Eric Schneider, Calvin Smith, Amy Witherow

Committee Chair: Calvin SmithCenter Director: Russell Hill

University of Arkansas for Medical Sciences Northwest1125 North College Ave.Fayetteville, AR 72703

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(479) 713-8000 main(479) 582-1056 [email protected], [email protected]

mailto:[email protected]

mailto:[email protected]

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I. Table of Contents

I. Table of Contents.........................................................................3

II. Executive Summary......................................................................5

III. General Description......................................................................7

IV. The Industry.................................................................................8

V. Products and Services................................................................10

VI. Marketing Plan...........................................................................13

VII. Operational Plan.........................................................................21

VIII. Management and Organization..................................................23

IX. Startup Expenses and Capitalization..........................................25

X. Financial Plan.............................................................................27

XI. Appendices.................................................................................33

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II. Executive Summary

“The UAMS Health and Wellness Center will provide UAMS’ students, employees, and the local Northwest Arkansas community with the facility, equipment, knowledge, and opportunity to live a healthier, safer, and more educated lifestyle.”

MARKET: By sharing the focus of servicing UAMS stakeholders, the local community and other corporate entities, there is an initial target market of over 7,000 that will increase with the awareness of the Center in the local community.

1ST YEAR INVESTMENT: $158,000VIABLE WITHIN 18 MONTHSPayoff of the initial investment and a profit will be generated during the 4th year.

LOCATION:

1100 North Woolsey AvenueFayetteville, AR 72703

18,000 Sqft. Split-floor facility that was last used as a Center for Exercise in 2007. Includes weight area, aerobics rooms, yoga room, locker rooms and hot tubs.

Facility Renovation Costs: $32,000

SERVICES: A variety of fitness and conditioning classes. Health and education outreach programs, classes, and information. First aid, self-defense, and other safety classes. Fitness assessments with follow-up information to improve diets and

unhealthy habits.

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A full range and variety of fitness equipment from which people of all ages and experience can utilize and benefit.

A variety of nutritional drinks and supplements. An experienced and knowledgeable staff that can teach members to

utilize equipment, set and maintain fitness goals, improve their diet, and enjoy living a healthier lifestyle.

Initial Equipment and Supplies: $8,000

STAFF: All staff will be under the hierarchy of the UAMS Northwest Vice Chancellor’s Office1 Director Shared

$15,0001 Activities Coordinator Full-time

$25,0001 Membership Coordinator Full-time

$25,0004 to 6 Support Staff Part-time $8-10 hourly4 to 6 Class/Group Instructors As Needed $10–20 per session

Annual Staff and Benefits Costs: $115,000 (can be reduced as needed)

OPERATIONAL:Operations of the facility will be handled by Center Staff, and existing UAMS Northwest and UAMS Fitness Center staff.

Startup Operational and Contingencies Cost: $27,000

Total Startup/Renovations Costs: $67,000

YEAR ONE SALES FORECAST:1ST Year Memberships: 830 Monthly Non-Members: 50 1ST Year Revenue: $132,000

1 st Year Total Expenses: $223,000

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Additional Money Needed 1st Year: $ 91,000

TOTAL AMOUNT NEEDED 1st YEAR: $158,000

YEARS TWO & THREE FORECAST:

Year Two: Profit: $27,000Money Owed: $131,000

Year Three:Profit: $95,000Money Owed: $ 36,000

INITIAL INVESTMENT PAID BACK IN 42 MONTHS

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III. General Description

Mission Statement:

The UAMS Health and Wellness Center will provide UAMS’ students, employees, and the local community with the facility, equipment, knowledge, and opportunity to live a healthier, safer, and more educated lifestyle.

Goals and Objectives:

The aim of the UAMS Health and Wellness Center is to be the main entity for fitness education and opportunity for UAMS Northwest students, employees, and the surrounding area. The Health and Wellness Center will also be a main location for expanding the UAMS Health Outreach and Education programs, resulting in a healthier and better educated community.

The UAMS Health and Wellness Center will work diligently to maintain the UAMS reputation for:

Maintaining top quality facilities and equipment Having highly educated and friendly staff Offering low costs to the customer Servicing the needs of the community first

The UAMS Health and Wellness Center will be financially self-sufficient by offering highly competitive membership dues, product sales, and low cost class offerings to fund all expenses and to generate enough profit to assist in the expansion of the UAMS Northwest Campus.

The UAMS Health and Wellness Center will operate under the direction of the UAMS Northwest Vice Chancellor’s Office and the UAMS Fitness Center in Little Rock.

The UAMS Advantage

UAMS is a known leader in health care, research and education in Arkansas and across the country. Excellence in patient care, research and education result in

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high expectations throughout the community.

The UAMS Fitness Center on the main campus in Little Rock has been in operation more than five years. Through trial and error, various programs and procedures have been implemented and adjusted to meet the needs of UAMS employees and students. The center’s director, Russell Hill, has worked in, owned and or operated fitness and therapy centers for 28 years and is very much in touch with the industry.

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IV. The Industry

The fitness and wellness industry has enjoyed steady growth for the past 20 years. Each year more and more studies show that exercise is vitally important to both the longevity and quality of life. Exercise and a healthy lifestyle are becoming more and more mainstream.

CensusThere is approximately 4,500 tax exempt Wellness and Fitness Centers in the U.S. with an annual revenue of over $5.3 billion. That is an average annual revenue of $1.2 million per establishment.

Short-termShort term the fitness industry has felt little effect from the economic downturn. Dollar for dollar fitness center dues are a great bargain and although memberships did not grow at the same rate in 2009 as in previous years they still increased.

Long-termRegarding long term expectations, when you combine an aging population with the economic changes that have taken place the last few years, analysts believe more and more Americans will delay retirement. This will result in the need for middle-aged Americans to maintain and improve their overall level of fitness to keep them productive and more competitive in their careers as well as reduce the likelihood of increased medical and health care expenses.

Programming, staff and services will already be in place to address upcoming industry trends. Our focus will be on the working professional and not the student or “hard core” exercise enthusiasts.

Competition

Within the Fayetteville city limits, there are more than 20 individual fitness centers which offer a various services. Some offer low cost memberships with 24/7 access, but fall short on customer service and class offerings. Others offer the full amenities you would expect from a health club, but are either over priced, overcrowded, or have limited access and availability. There are also many

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organizations offering health outreach and education services, but either have a single focus (diabetes, smoking cessation, CPR, etc.), or already partner with UAMS on their programs.

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Of the various organizations in the area, the following four could present the biggest competition:

Organization Strengths Weakness Comparison

World’s Gym2035 North College Ave.Fayetteville, AR 72703(479) 521-0585

Full service weight room, cardio classes, trainers, showers, lockers, day care, racquet ball, gym

“Franchised” service, metal weights, reputation for servicing only the hard-core enthusiasts.

UAMS has lower cost, higher quality facilities, and more education.

Fayetteville Athletic Club2920 E. Zion Fayetteville, AR 72703(479) 587.0500

Full service weight room, track, tennis, pool, cardio classes, trainers, showers, gym, towel service, day care

Overpriced, edge of town location, focused only towards servicing “executives or professionals”

UAMS has much lower dues, better location, broader customer focus, education

WRMC Center for Exercise12 East Appleby RoadFayetteville, AR 72703Phone (479) 463-3488

Full service weight room, pool, cardio classes, trainers, showers, locker, towel service

Limited weight room, limited parking, focused on servicing “seniors”

UAMS has better parking and equipment space, broader customer focus, education

U of A HPER BldgSouth Gregg AvenueFayetteville, AR 72701(479) 575-4950

Full service weight room, track, tennis, pool, variety of classes, trainers, showers, gym, towel service, day care

Extremely limited parking, overcrowded, services mostly college students

UAMS has extremely better parking, similar location, broader customer focus, education

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V. Products and Services

The goal of the UAMS Health and Wellness Center is to provide everyone who enters the facility an opportunity to live a healthier, safer, and more health educated lifestyle. To meet this goal, the center will offer:

A variety of fitness and conditioning classes. Health and education outreach programs, classes, and information. First aid, self-defense, and other safety classes. Fitness assessments with follow-up information to improve diets and

unhealthy habits. A full range and variety of fitness equipment from which people of all ages

and experience can utilize and benefit. A variety of nutritional drinks and supplements. An experienced and knowledgeable staff that can teach members to utilize

equipment, set and maintain fitness goals, improve their diet, and enjoy living a healthier lifestyle.

The UAMS Health and Wellness Center will have the ability to offer a higher quality of service at a lower cost due to the location, availability and space of the facility, the partnership with the UAMS Fitness Center in Little Rock, and the outstanding knowledge and reputation of the UAMS organization.

Specifically, the center will offer:

Fitness and Conditioning Availability and access to fitness equipment for individual use. Staff will

offer instruction on how to properly use all equipment. A video library including various instructional programs and training

regiments including: P90x, Cycle Strong, TriCycle, Hand-2-Hand Kettle Circuit, Sculpting

Coach, Core Power, Strength Toolbox, Reactive Strength and Power, Cardio Fusion, Strength and Athletic Conditioning, Total Sports Conditioning, Equilibrium, Ballast Ball Introduction and the Complete Zumba Collection.

Group Fitness Classes including:

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Yoga Jazzercise Zumba A variety of high and low intensity conditioning classes

Programs including: Summer Slim down (Employees) Battle of the Colleges (Students) Promotional Events (5k’s, walk-a-thons, health and fitness fairs)

Personal Training Massage Therapy

Assessments

Full service individual fitness assessments that measure: BMI, heart rate, blood pressure, body fat, RMR, VO2 strength and endurance, flexibility and lipid profile. (Example in Appendices)

Fitness assessments for outside organizations to demonstrate the need(s) for health/fitness improvement on a large scale.

Equipment

Top quality, accessible, easy to use, and up-to-date fitness equipment* including:

Cardio (treadmills, elliptical, recumbent bikes, rowing machines) Selectorized (presses, compact cable systems, back and abdominal

machines) Free weights/plate loaded (Max rack, benches, dumbbells, curl bars) Group exercise (steps, stability balls, ropes, mats, bands)

* (Equipment Specifications and Photographs in Appendices)

Health and Education Outreach Classes, programs, and information on improving the awareness, health, and

education of the service area including: Diabetes education

o Utilize Merck Diabetes Conversation Maps to help patients and family members of those diagnosed with diabetes what they need to know about managing the disease to live their life to the fullest.

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Smoking Cessationo Program designed to help adults stop smoking by promoting

healthy lifestyles and preserving patient health Nutrition information

o Implement realistic, long-lasting lifestyle changes to improve your overall health and well-being with the five basic tips introduced and explored in this class

Weight-loss programs A center for assisting other AHEC-NW Outreach and Education programs

such as the CHAMPS and MASH programs.

Safety Education Programs and classes open to the community on improving safety that

include: Basic and in-depth martial arts instruction Women’s self-defense Child safety programs

o Equip family members/friends of children the proper way to restrain a child in a motor vehicle.

Medication safety CPR

o American Heart Association CPR courses and basic First Aid taught by certified instructors. May be geared to specific requirements.

First Aid Babysitting courses for teens & preteens

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VI. Marketing Plan

Customer BaseLocal Community

The UAMS Health and Wellness Center is a standalone building located on the UAMS Northwest Campus in Fayetteville, Arkansas. Fayetteville has a population of over 70,000 and the UAMS Northwest Campus is located in the heart of the city. In addition to offering services to the general public, the Health and Wellness Center will focus a portion of the pre-marketing towards:

20+ apartment complexes in the area Wilson Park Community Homes surrounding UAMS Northwest Campus Local Small Businesses

Corporate FocusIn today’s recessive economy, some individuals are being forced to cut back on preventive healthcare, while some employers are being forced to look for alternative benefits to offer employees instead of salary raises. These factors have resulted in a significant increase in the need for “company sponsored” wellness programs. With this in mind, the UAMS Health and Wellness Center will initially focus on offering memberships to nearby organizations at a reduced rate.

Located at the UAMS Northwest Campus are:

UAMS Northwest Regional Medical School Within year: 48 students and residents, 15 employees Within 5 years: 250 students and residents, 30 employees

UAMS AHEC-NW 70 students and residents, 110 employees 20,000+ patients annually (potential patient referral program)

Washington Regional Medical Center’s Generations Unit and Sleep Lab 40 employees

Regency Hospital 115 employees

State Veteran’s Administration Office

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93 employees

Adjoining the UAMS Health and Wellness Center is the Veterans’ Administration of the Ozarks campus which has 1168 employees.

Other entity’s that have expressed interest and will be market targets are the City of Fayetteville (700 employees), Washington County (1300 employees), and the University of Arkansas- Fayetteville faculty and staff.

The above organizations present a 7,000+ main market base for monthly memberships (3,500 students and employees plus potential sponsored family members).

Only 12% of this market base would be needed to cover all expenses solely with membership dues.

The size, location, and parking of The UAMS Health and Wellness Center provide the ability to maintain a membership base of 3,000+. By expanding the services of the center as revenue increases and with the expansion of the UAMS Northwest Campus, the center could reach this membership total within 5 – 7 years.

All group fitness classes and education programs will continue to be open to, and serve the needs of, the local community. With the UAMS Health and Wellness Center as the recognizable base for these services, the awareness of the classes and programs will increase.

The UAMS Advantage

The following are a few key factors that will help the UAMS Health and Wellness Center stand out among the competition:

Lower costs than any full service center in the area. Central Location. Top quality and up-to-date equipment. Quality open space facility with showers, lockers, and towel service. Variety of training programs including fitness, safety, health and wellness.

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Knowledgeable, friendly and hands-on service staff available at all open hours.

Support and expertise of UAMS faculty and staff. The UAMS reputation.

Strategy

Pre-Marketing

The Health and Wellness Committee will pre-market the UAMS Health and Wellness Center to the market base prior to becoming a full service center. This will create a membership base that will help fund start-up costs and will decrease the amount of marketing necessary in later phases. Key components to the Pre-Marketing phase will be:

Completing the update of the facility. Fine tuning the business plan and cash-flow projections. Implementing electronic advertising tools. Developing a presentation routine to present to interested organizations. Establishing and capitalizing on relationships with the target market base. Purchasing equipment for initial services.

A pre-marketing campaign should be extremely successful by taking advantage of the established relationships with the target entities, and the expertise of the Wellness Committee.

Initial Services

Once the facility is fully functional, the UAMS Health and Wellness Center, will offer a variety of instructional programs and services to establish an awareness of the center. Below are a few of the services to be offered during the initial phase after the facility update.

Group fitness classes for UAMS employees and students. Fitness assessments for UAMS employees and students. Group fitness classes open to other tenants of the Northwest Campus and

the Federal VA. Potential Revenue Fitness assessments for individuals offered to the targeted entities as a

whole. Potential Revenue

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Promotion

After the pre-marketing phase, there will be three key components to the promotion of the UAMS Health and Wellness Center

1. Promotional Events and Programs (Health fairs, 5k’s, health assessments, free classes)2. Advertising (Websites, E-mail marketing, WHEN network, traditional advertising)3. Customer promotion (word-of-mouth)

The center will utilize the marketing templates and resources already established by the UAMS Fitness Center in Little Rock and UAMS Creative Services.

Pricing

The UAMS Health and Wellness Center will follow the pricing guidelines of the UAMS Fitness Center in Little Rock to establish a single-network of members.

Membership Dues

Membership dues will include Access to the entire facility during operating hours. Free attendance to all group fitness classes. An initial and annual fitness assessment. Availability to Personal Trainers (Personal Trainers responsible for their own

fees). The ability to sponsor additional members.

Membership Pricing for ALL entities is as follows: Annual Salary under $30,000: $15 monthly Annual Salary over $30,001: $30 monthly Students $15 monthly Sponsored (Family): $15 for 1st additional member, $10 for 2nd , $5 for all

additional members

For UAMS employees, membership dues will be payroll deducted and established with an annual contract. For UAMS students, membership dues will be on a semester contract and payment will be the responsibility of the students.

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Payment methods for the other entities will be established through negations with each individual organization.

Group Fitness

Group Fitness classes will be free to all members. For non-members, single class attendance will start at $5 and increase depending on the length and type of class.

Wellness and Education

While many Wellness and Education programs will be free to the community, some classes will have costs associated and prices will be set on a course-by-course basis.

Point of Sale Items:

Nutritional supplements, t-shirts, headphones (for Cardio Theater), lifting straps, Biofreeze and more will be available for purchase to both members and non-members.

Location Leasing/Renting

The facility will be available to outside organizations and individuals for leasing and renting of space. This will primarily be the case during the Initial Services phase to raise revenue. Pricing and availability on space will be determined by the amount of space to be utilized and the service being offered by the potential occupant.

Sales Forecast*

Memberships:

A facility this size could service and should have a goal of approximately 3500 members.

Depending on the time of year the facility opens, the required membership to operate in the black should be in place within the first year.

Membership should be at approximately 1,150 by the end of the third year of operation.

Group Fitness Classes:

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Group exercise classes will be adjusted on a quarterly basis. In the proposed setting, if participation averages fewer than eight

participants / class schedule(s) and class offerings should be evaluated and adjusted as necessary.

Health and Education Classes:

Class frequency and pricing will be determined by the Education Coordinators and the needs of the community.

Point of Sale Items

The Health and Wellness Center will potentially become a consumer favorite for Nutritional Supplements due to:

Facility location Ease of access Discounted prices

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UAMS Health and Wellness Center 13-Sep-10

Projected Sales Forecast

Products and Services Assumptions % Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Totals

Traditional MembershipPrice Per Unit 30.00$ 100.00%Variable Cost Per Unit 2.00$ 6.67%Gross Margin Per Unit 28.00$ 93.33%Projected Unit Sales

Seasonality Factor 3.14% 4.09% 5.03% 5.97% 6.92% 7.86% 8.81% 9.75% 10.69% 11.64% 12.58% 13.52% 100.00%Year One 100 130 160 190 220 250 280 310 340 370 400 430 3,180 Year Two Growth 54.00% 460 480 500 520 540 560 580 600 620 640 660 680 6,840 Year Three Growth 24.00% 700 710 720 730 740 750 760 770 780 790 800 810 9,060

Fixed Expense Allocation 75.00%

Projected Revenue 95,400$ Variable Costs 6,360 Gross Margin 89,040 Fixed Expenses 66,172 Profit 22,868 23.97%

Breakeven Sales Revenue 70,899.08$ Breakeven Sales Units 2,363

Discounted MembershipPrice Per Unit 15.00$ 100.00%Variable Cost Per Unit 2.00$ 13.33%Gross Margin Per Unit 13.00$ 86.67%Projected Unit Sales



Projected Revenue 23,850$ Variable Costs 3,180 Gross Margin 20,670 Fixed Expenses 8,823 Profit 11,847 49.67%

Breakeven Sales Revenue 10,180.38$ Breakeven Sales Units 679

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UAMS Health and Wellness Center 13-Sep-10

Projected Sales Forecast - Page 2

Products and Services Assumptions % Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Totals

Non-Member Class AttendeesPrice Per Unit 5.00$ 100.00%Variable Cost Per Unit 1.00$ 20.00%Gross Margin Per Unit 4.00$ 80.00%Projected Unit Sales



Projected Revenue 5,150$ Variable Costs 1,030 Gross Margin 4,120 Fixed Expenses 6,617 Profit (2,497) -48.49%

Breakeven Sales Revenue 8,271.56$ Breakeven Sales Units 1,654

Point of Sale Items (Averaged)Price Per Unit 15.00$ 100.00%Variable Cost Per Unit 6.00$ 40.00%Gross Margin Per Unit 9.00$ 60.00%Projected Unit Sales

Seasonality Factor 3.77% 4.72% 7.55% 8.49% 9.43% 9.43% 9.43% 9.43% 9.43% 9.43% 9.43% 9.43% 100.00%Year One 20 25 40 45 50 50 50 50 50 50 50 50 530 Year Two Growth 20.00% 55 55 55 55 55 55 55 55 55 55 55 55 660 Year Three Growth 8.00% 60 60 60 60 60 60 60 60 60 60 60 60 720


Projected Revenue 7,950$ Variable Costs 3,180 Gross Margin 4,770 Fixed Expenses 6,617 Profit (1,847) -23.24%

Breakeven Sales Revenue 11,028.75$ Breakeven Sales Units 735

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VII. Operational Plan

Hours of Operation

Normal OperationMonday – Friday 5:30am – 9:30pmSaturday 8:30am – 4:30pmSunday 10:30am – 4:30pm

Group FitnessSession scheduling will utilize the following guidelines:

Monday – FridayMornings: 5:30am – 6:30am ; 6:30am – 7:30am ; 7:30am – 8:30am ; Lunch: 12:00pm – 1:00pm Evenings: 4:30pm – 5:30pm ; 5:30pm – 6:30 pm

Saturday – Sunday

If any are offered, weekend classes should be kept to a minimum. Participation is typically very low.

Additional sessions will be scheduled as needed.

Health and Wellness

Times established on an individual basis.

Staffing*

1 Director: Shared between Fayetteville and Little Rock2 Coordinators: 1 on duty during operational hours4 Part-time staff: During peak hours and other designated times4-6 Instructors: As needed for class sessions

*Detailed Job Descriptions and Duties are included in the Appendices.

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Location

Address1100 North Woolsey AvenueFayetteville, AR 72703

The location chosen for the UAMS Health and Wellness Center is ideal for the services to be provided. The upstairs will be devoted to member fitness and includes an open floor plan for equipment layout, locker rooms, and designated group fitness areas. There is also a welcome counter and small office near the main entrance. The downstairs will be devoted to health and wellness education and includes a vast storage area, a large classroom, 3 offices, and a group fitness room. There are ground level entrances on both floors and ample parking spaces in the front and back.

Specifics Northwest corner of UAMS Northwest Campus Approximately 18,000 square feet Previously WRMC Center for Exercise Split floor plan:

Upstairs = Main equipment area, 1 aerobics room, 1 yoga room, main counter, large locker rooms, showers, sauna/hot tubs, break out areas, small office Downstairs = Large Classroom area, storage, 3 offices, 1 aerobics room, small locker rooms.

Networked for cable broadcasting and computer connectivity Parking Space for 100+ vehicles Main Entrance upstairs, with back and side entrances available as needed. Large, ceiling height windows to provide open feel and natural lighting Elevator

Maintenance Needed – Estimated $30,000 - $38,000 Fire Alarm - Certification and Update (JE Systems) Furnaces - Assess and update (Elite Building Solutions) Electrical – Assessment (Hill Electric)

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Elevator – Update to code (Tyson Crump) Security – replace locks (Maintenance) and integrate with security system

(IT) Janitorial – thorough clean-up, clean carpets (SG360) General Maintenance – Replace lights and ceiling tiles, plumbing, lockers,

walls, paint (Michael Paul) Signage – Remove WRMC signs and replace with temporary UAMS Health

and Wellness Center bannersUtilities – Estimated $1500 per month.

Landscaping – Included in new bid. Cable/Internet/Phone – Wired for connectivity, need activation from

Cox/AT&T.o Will be separate from UAMS Northwest Network, but will be able to

access network when needed (E-mail, software support). Janitorial – Facility cleaning done as an addition to contract with (SG360) . Maintenance – Support provided by UAMS Northwest personnel.

Inventory

The UAMS Health and Wellness Center will offer POS items similar to what is offered at the UAMS Fitness Center.

The items in the UAMS Fitness Center are more of an amenity to employees and students than a profit center.

However, at the NWA campus (depending on our market) POS items may be able to generate a modest profit.

POS inventory value will be approximately $2,000. No seasonal buildups will be required. Allow approximately 3-5 days for nutritional supplements, 4-6 weeks for

specialty t-shirts, 2-3 weeks for all other items.

Accounts Payable/ReceivableAccounts Payable will be handled by designated staff utilizing an assigned UAMS Northwest Cost Center.

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- On accounts payable items shared by the Little Rock and Northwest facilities, the Cost Center utilized will be determined.

Accounts Receivable will be handled by designated staff. Funds from Account Receivable items will be placed in an assigned UAMS Northwest fund center.

- Funds received from outreach and education programs that are funded by the AHEC-NW Education Department will be distributed between the AHEC-NW Education Department fund center and assigned UAMS Northwest fund center.

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VIII. Manageme

nt and

Organization

Personnel# Position Title Status Compensation

1 Director Shared $15,0001 Activities Coordinator Full-time

$25,0001 Membership Coordinator Full-time $25,0004 to 6 Support Staff Part-time $8-10 hourly4 to 6 Class/Group Instructors As Needed

$10 – 20 per session

As membership grows additional part-time staff will be required.

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The Activities Coordinator and the Membership Coordinator should be degreed and certified trainers or group exercise instructors. Part-time employees should be familiar with exercise theory and equipment and possess excellent customer service skills. Group exercise instructors should be certified. All employees should be CPR certified.

To find quality employees, the UAMS Health and Wellness Center will post job openings on the UAMS website and advertise in local newspapers. There is typically no shortage of applicants. Being very familiar and experienced in this industry, Russell Hill, Center Director, would prefer to interview candidates for all positions

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IX. Startup Expenses and Capitalization

UAMS Northwest $50,000

Facility Renovation: $30,000 - $32,000 Utilities (1st Month): $1,000 - $1,700 Equipment: $6,000 Contingencies: $5,000

UAMS Fitness Center $3,500

Marketing: $1,500 Travel: $500 Supplies: $1500

AHEC-NW Outreach Programs $1000

Services: $1000

NOTES:

Amy Witherow submitted the Blue Cross $ Blue Shield, Blue and You grant for up to $150,000 which would cover startup expenses.

Not all equipment and renovations are needed for the initial phase. Revenue will be generated through initial services to fund other start-up

expenses. Grants and other outside funding sources will continue to be sought.

SPECIFICS

Facility Renovation: $30,000 - $32,000 UAMS Northwest

o Fire Alarm - $8,300o HVAC - $16,900o Electrical – $500 - $1,000o Elevator – $600-$800o Security – $200 -$250o Janitorial – $1,000 - $1,350

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o General Maintenance – $1,500 -$2,000o Signage - $1,000 - $2,000

Utilities (1st Month): $1,000 - $1,700 UAMS Northwest

o Water, Gas, and Electric (Already paying at minimum usage) - $500 - $700o Janitorial (reduced amount) - $250 - $500 o Cable/Phone/Internet + activation - $300 - $500

Equipment: $6,000UAMS Northwest

o Group Fitness Equipment (purchase): $2,500o Equipment Lease (monthly): $3,500

Marketing: $1,500 UAMS Fitness Center

o Utilize UAMS Creative Services for marketing tools (flyers, presentations, advertisement, website design)

Travel: $500 UAMS Fitness Center

o To raise center promotion and awareness.o Russell Hill’s travel to/from Little Rock

Services: $1000 AHEC-NW Outreach Programs

o Assessments (1 free for UAMS students and employees) - $1000

Supplies: $1500 UAMS Fitness Center

o Gym supplies - $500o Office Supplies - $500

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o Towels - $500 (optional)

Contingencies: $5,000UAMS Northwest

1st year Operational Expenses: $91,000*UAMS Northwest

o Salaries and Benefits - $100,000o Equipment/Asset Expenses - $10,000 o Utilities/Other operating Expenses - $10,000

*Additional amount needed

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X. Financial Plan

With considerable market research, the expertise of Russell Hill, and review by the Wellness Committee, it has been determined that the UAMS Health and Wellness Center can be viable within 2 years with minimal start-up costs. To accomplish this, the Center will follow the financial model of the UAMS Fitness Center in Little Rock and will take advantage of the existing practices and relationships of UAMS Northwest.

Below is a simplified break-down of the financial plan over the next three years. As you can see by these numbers and by the more detailed statements on the following pages, the UAMS Health and Wellness Center will begin generating a profit within two years and will have repaid all initial investments and be contributing a revenue to the UAMS Northwest Campus within four years.

Year One: Startup Funds: $ 67,000Expenses:

$223,000Income:

$132,000

End of Year One: $158,000

Year Two: Expenses:

$243,000

Income: $270,000 Profit: $ 27,000

End of Year Two: $ 131,000

Year Three: Expenses:

$254,000Income: $349,000 Profit: $ 95,000

End of Year Three: $36,000

*Yearly Income Statements, Balance Sheets, and Cash Flow statements can be found in the Appendices.

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Breakeven Analysis Dollars PercentAnnual Sales Revenue 132,350$ 100.00%Cost of Sales 13,750 10.39%Gross Margin 118,600 89.61%

Salaries and Wages 114,982 Fixed Operating Expenses 88,230 Total Fixed Business Expenses 203,212

Breakeven Sales Calculation 203,212 89.61%

Breakeven Sales in Dollars 226,772$

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UAMS Health and Wellness CenterYear End Summary

Year One % Year Two % Year Three %

IncomeTraditional Membership 95,400 205,200 271,800 Discounted Membership 23,850 45,450 56,250 Non-Member Class Attendees 5,150 8,490 10,260 Point of Sale Items (Averaged) 7,950 9,900 10,800

Total Income 132,350 100.00% 269,040 100.00% 349,110 100.00%

Cost of SalesTraditional Membership 6,360 13,680 18,120 Discounted Membership 3,180 6,060 7,500 Non-Member Class Attendees 1,030 1,698 2,052 Point of Sale Items (Averaged) 3,180 3,960 4,320

Total Cost of Sales 13,750 10.39% 25,398 9.44% 31,992 9.16%

Gross Margin 118,600 89.61% 243,642 90.56% 317,118 90.84%

Total Salary and Wages 114,982 86.88% 118,226 43.94% 121,566 34.82%

Fixed Business ExpensesAdvertising 2,400 2,472 2,546 Car and Truck Expenses - - - Commissions and Fees 600 618 637 Contract Labor 14,400 14,832 15,277 Equipment Leasing 42,000 43,260 44,558 Customer Discounts and Refunds 1,200 1,236 1,273 Dues and Subscriptions 600 618 637 Entertainment 1,320 1,360 1,400 Insurance (Liability and Property) 1,200 1,236 1,273 Internet 1,440 1,483 1,528 Legal and Professional Fees - - - Office Expenses 1,200 1,236 1,273 Postage and Delivery 600 618 637 Rent (on business property) - - - Rent of Vehicles and Equipment - - - Repairs and Maintenance 1,920 1,978 2,037 Supplies 4,800 4,944 5,092 Telephone and Communications 960 989 1,018 Travel 2,400 2,472 2,546 Utilities 6,000 6,180 6,365

Total Fixed Business Expenses 83,040 62.74% 85,531 31.79% 88,097 25.23%

Total Other Expenses 11,357 8.58% 12,464 4.63% 12,465 3.57%

Net Income (90,779) -68.59% 27,421 10.19% 94,989 27.21%

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UAMS Health and Wellness CenterRequired Start-Up Funds

Required Start-Up Funds Amount Totals Depreciation NotesFixed Assets

Real Estate -$ Buildings 30,000 20.00 yearsLeasehold Improvements 2,000 7.00 yearsEquipment 6,000 7.00 yearsFurniture and Fixtures 4,000 5.00 yearsVehicles - 5.00 yearsOther Fixed Assets - 5.00 years

Total Fixed Assets 42,000

Operating CapitalPre-Opening Salaries and Wages 15,000 Prepaid Insurance Premiums - Beginning Inventory 1,500 Legal and Accounting Fees - Rent Deposits - Utility Deposits 500 Supplies 500 Advertising and Promotions 1,500 Licenses 500 Other Initial Start-Up Costs 500 Working Capital (Cash On Hand) 5,000

Total Operating Capital 25,000

Total Required Funds 67,000$

Sources of Funding Amount Totals Loan Rate Term in Months Monthly PaymentsOwner's Cash Injection 100.00% 67,000 Outside Investors 0.00%Additional Loans or Debt

Commercial Loan 0.00% - 0.00% 60.00 $0.00Commercial Mortgage 0.00% - 0.00% 60.00 $0.00

Total Sources of Funding 100.00% 67,000$ $0.00

A line of credit is also required in the amount of 81,169$

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UAMS Health and Wellness CenterSalaries and Wages

Salaries and Related Expenses # Assumptions Wage Base Monthly Year One Year Two Year Three

Percent Change 3.00% 3.00%

Salaries and WagesOwner's Compensation 1 -$ - - - Salaries 1 1,250 15,000 15,450 15,914 Wages

Full-Time Employees 2 4,160 49,920 51,418 52,960 Estimated Hours Per Week 40.00 Estimated Rate Per Hour 12.00$

Part-Time Employees 4 2,773 33,280 34,278 35,307 Estimated Hours Per Week 20.00 Estimated Rate Per Hour 8.00$

Independent Contractors - - - - Total Salaries and Wages 8 8,183 98,200 101,146 104,180

Payroll Taxes and BenefitsSocial Security 6.20% 102,000$ 507 6,088 6,271 6,459 Medicare 1.45% 119 1,424 1,467 1,511 Federal Unemployment Tax (FUTA) 0.80% 7,000$ 37 448 448 448 State Unemployment Tax (SUTA) 2.70% 7,000$ 126 1,512 1,512 1,512 Employee Pension Programs 5.00% 409 4,910 4,910 4,910 Worker's Compensation 0.00% - - - - Employee Health Insurance 0.00% 200 2,400 2,472 2,546 Other Employee Benefit Programs 0.00% - - - -

Total Payroll Taxes and Benefits 1,399 16,782 17,080 17,386

Total Salaries and Related Expenses 9,582 114,982 118,226 121,566

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UAMS Health and Wellness CenterFixed Operating Expenses

Fixed Operating Expenses Monthly Year One Year Two Year Three

Percent Change 3.00% 3.00%

ExpensesAdvertising 200$ 2,400 2,472 2,546 Car and Truck Expenses - - - - Commissions and Fees 50 600 618 637 Contract Labor 1,200 14,400 14,832 15,277 Equipment Leasing 3,500 42,000 43,260 44,558 Customer Discounts and Refunds 100 1,200 1,236 1,273 Dues and Subscriptions 50 600 618 637 Entertainment 110 1,320 1,360 1,400 Insurance (Liability and Property) 100 1,200 1,236 1,273 Internet 120 1,440 1,483 1,528 Legal and Professional Fees - - - - Office Expenses 100 1,200 1,236 1,273 Postage and Delivery 50 600 618 637 Rent (on business property) - - - - Rent of Vehicles and Equipment - - - - Repairs and Maintenance 160 1,920 1,978 2,037 Supplies 400 4,800 4,944 5,092 Telephone and Communications 80 960 989 1,018 Travel 200 2,400 2,472 2,546 Utilities 500 6,000 6,180 6,365

Total Expenses 6,920 83,040 85,531 88,097

Other ExpensesDepreciation 287 3,443 3,443 3,443 Interest

Commercial Loan - - - - Commercial Mortgage - - - - Line of Credit 146 1,747 - -

Total Other Expenses 432 5,190 3,443 3,443

Total Fixed Operating Expenses 7,352 88,230 88,974 91,540

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XI. Appendices

A. Detailed Equipment List3

B. Example Equipment Pictures

C. Facility Pictures

D. UAMS Fitness Center

E. Job Descriptions

F. Year 1 – Year 3 Financial Statements

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A.Equipment List

ITEM MFR MODEL QTY

CARDIO MFR MODEL QTY GROUP EXERCISE MFR MODEL QTYCommercial Treadmill Precor C954i 8 Step Bench w / risers 24Commercial Elliptical Precor C576i 3 Stability Balast Ball 24Adaptive Motion Trainer Precor AMT 100i 3 Jumprope 12Commercial Upright Bike Precor 846i-U 2 Exercise Mat 24Commercial Recumbent Bike Precor 846i-R 2 Yoga Mat 24Rowing Machine Concept II 1 Resistance Band (light) 8

Resistance Band (med) 12SELECTORIZED MFR MODEL QTY Resistance Band (hvy) 12

Lat Pull Precor 304-Icarian 1 Bosu 12Seated Row Precor C-Line 1Pec Fly / Rear Delt Precor S-Line 1Chest Press Precor C-Line 1Shoulder Press Precor C-Line 1Leg Extension Precor C-Line 1 ADDITIONAL EQUIPMENT QTY EST. COST TOTALLeg Curl (seated) Precor C-Line 1 AEDRotary Torso Precor C-Line 1 ComputerAb Crunch Precor C-Line 1 Cleaning / maint. SuppliesLow Back Precor C-Line 1 Printed materialGlute Extension Precor C-Line 1 Office suppliesInner / Outer Thigh Precor S-Line 1 Towel ServiceCompact Cable System Precor FTS Glide 1 Sound System (group exer.)Dip / Chin Assist Precor 320 1 Gym Wipes

TVFREE WT / PLATE LOAD MFR MODEL QTY Video security

Smith Machine Precor 802 1Max Rack Star Trac 1Adjustable Bench Precor 119 3Multi Purpose Bench Precor 116 1Adjustable Ab Bench Precor 113 1Back Extension Bench Precor 312 1Dumbbells (5 - 100) 5lb. Inc. TKO SDS 1Dumbbell Rack Precor 812 2AB-X Precor AB-X 1Preloaded Curl Bar (20-110) TKO 808RR-BG-G10 1Preloaded Curl Bar Rack Precor 808 1Oly. Rubber Grip Plate (45) TKO TKO 10Oly. Rubber Grip Plate (35) TKO TKO 4Oly. Rubber Grip Plate (25) TKO TKO 8Oly. Rubber Grip Plate (10) TKO TKO 12Oly. Rubber Grip Plate (5) TKO TKO 8Oly. Rubber Grip Plate (2.5) TKO TKO 6Oly. Tri-Grip Curl Bar TKO 47" 1

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B.Equipment Pictures

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C.Facility Pictures

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D.UAMS Fitness Center

The UAMS Fitness Center is located on the eighth floor of the Fay W. Boozeman College of Public Health building on the Little Rock campus. The fitness center is a 3500 square-foot, 24-hour facility available to UAMS employees and students and offers all the services and amenities of public fitness centers and health clubs. Member-only services include:

personal training (available at the discounted rate of $25 per session), group exercise classes (no charge), s shower and locker facilities, towel service (no charge), special incentive programs and contests such as the Battle of the

Colleges, 100-Class Club and Cannonball Run, Bike & Row.

Members have approximately 20 group exercise classes to choose from each week. For those who aren’t interested in instructor-led group exercise we have a video library available for use during times classes are not scheduled.

The UAMS Fitness Center also has products and services available to all employees and students for a minimal fee. These services include: fitness assessments, massage therapy and discounted nutritional supplements. Fitness and wellness lectures, FitNews e-newsletter and specialty sports performance clinics are available to UAMS employees and students at no charge.

The UAMS Fitness Center opened in the fall of 2004 and in 2006 was awarded the Governor’s Leadership and Fitness Award in the Government Agency division. According to industry standards the UAMS Fitness Center has a rate of attrition approximately 5% below the national average and a member usage rate 6 - 8% above the national average depending on the time of year. Keeping a watchful eye on purchasing, staffing expenses and service costs coupled with customer service excellence has allowed the UAMS Fitness Center to operate in the black for the past five years with no funds received from the university. Our recent five-year remodel in which all equipment, flooring, lighting and fixtures were updated as well as additional mirrors, paint and product display area, was able to be paid for with funds accumulated the previous five years of operation.

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The UAMS Fitness Center is one of the most popular places on campus and the encouragement, information, instruction, products and services we make available to UAMS students and employees make us a valuable asset to the university.

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E. Staff and Job Descriptions

Director (Shared with UAMS Fitness Center)

General Description

Assume the overall management of the Fitness Center

Job Responsibilities

Manage the fitness center providing leadership and direction. Program liaison to campus administrators and faculty. Oversee Advisory Council meetings and sub-committees. Implement expense control and savings. Monitor Fitness Center budget. Manage Fitness Center membership database. Manage Fitness Center memberships and financial reports. Develop and implement member retention programs. Develop and manage member incentive programs. Monitor all Fitness Center programs. Provide health-science related content for newsletter, website and member

information. Keep abreast of and monitor current fitness trends to maintain up-to-date

facility and services . Manage Fitness Center staff.

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Coordinator (Full Time)

General Description

Assist in the overall management of the fitness center and budget. Develop and implement educational awareness programs to include marketing, advertising and public relations initiatives. Reports to Fitness Center Director.


Oversee Fitness Center operational budget. Handle income deposits. Prepare quotes. Prepare fiscal budget. Receive items and process invoices. Maintain supply records through SAP. Inventory and order supplies as needed. Maintain website with all changes at Director’s discretion. Assist with fitness center membership database. Generate financial reports. Develop and implement fitness and wellness-related programs. Assist with overall management of Fitness Center. Coordinate Fitness Center communications and marketing efforts as they

relate to the entire market population. Assist with fitness center membership recruitment efforts. Assist with day-to-day operations and other duties as assigned by Director.

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Membership Coordinator (Full Time)

General Description

Oversee enrollment of new fitness center members, member cancellations, manage member database, assist with all aspects of fitness center programs, provide excellent customer service and assist with day-to-day operations. Reports to Fitness Center Director.


Enrollment and cancellation of fitness center members. Manage all aspects of fitness center member database. Maintain point-of-sale inventory and financial records. Maintain membership files. Correspond with members regarding enrollment, cancellations, payments,

membership status, etc. Produce activity reports on both a scheduled and as-needed basis. Reconcile data provided from UAMS Human Resources, Payroll and other

organizations with the fitness center member database. Coordinate fitness center communications and marketing efforts as they

relate to members. Develop member retention programs. Conduct informative presentations and tours of fitness center facilities

highlighting all programs and services. Assist with development and implementation of fitness and wellness

programs including research of topic area, program promotion, surveying programs, securing speakers, program logistics, etc.

Oversee front desk area and duties. Provide excellent customer service to all members, vendors and visitors. Assist with day-to-day operations and other duties as assigned by Director.

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Fitness Specialist (Part-Time)

General Description

Provide hands-on service to members, oversee group exercise and personal trainers.

Job Description

Coordinate group fitness program, including all communications with instructors and members on schedule changes, substitute requirements, etc.

Instruct group exercise classes as needed. Verify and monitor group fitness instructor and personal trainer

certifications and CPR. Keep current group fitness schedule update and distributed appropriately. Oversee equipment and coordinate maintenance as needed with both

internal departments and vendors or service providers. Lead facility tours to potential and existing members, visitors and guests. Assist and monitor members on facility floor. Work with equipment provider to develop preventative maintenance

program. Maintain Fitness Center amenities and cleanliness. Schedule and conduct new member orientations. Maintain AED check-list. Assist with day-to-day operations and other duties as assigned by Director.

Class Instructors (As needed)

Provide professional instruction on assigned area as needed. Class instructors will be paid on a per class basis.

Professional and Advisory Support The UAMS Health and Wellness Center will be under the administrative

hierarchy of the UAMS Northwest Vice Chancellor’s Office. UAMS Northwest personnel will provide support for Accounts Payable,

Accounts Receivable, Human Resources, and other financial matters as needed.

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The AHEC-NW Education Department, primarily the Health Outreach Coordinator, will provide support for Wellness Education and Outreach programs.

The UAMS Northwest Wellness Committee will provide advisory and program support as needed.

The UAMS Fitness Center will provide support as needed.

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F. Financial StatementsUAMS Health and Wellness CenterProjected Income Statement - Year One

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Totals

IncomeTraditional Membership 3,000 3,900 4,800 5,700 6,600 7,500 8,400 9,300 10,200 11,100 12,000 12,900 95,400 Discounted Membership 750 975 1,200 1,425 1,650 1,875 2,100 2,325 2,550 2,775 3,000 3,225 23,850 Non-Member Class Attendees 150 200 325 375 400 425 450 475 550 575 600 625 5,150 Point of Sale Items (Averaged) 300 375 600 675 750 750 750 750 750 750 750 750 7,950

Total Income 4,200 5,450 6,925 8,175 9,400 10,550 11,700 12,850 14,050 15,200 16,350 17,500 132,350

Cost of SalesTraditional Membership 200 260 320 380 440 500 560 620 680 740 800 860 6,360 Discounted Membership 100 130 160 190 220 250 280 310 340 370 400 430 3,180 Non-Member Class Attendees 30 40 65 75 80 85 90 95 110 115 120 125 1,030 Point of Sale Items (Averaged) 120 150 240 270 300 300 300 300 300 300 300 300 3,180

Total Cost of Sales 450 580 785 915 1,040 1,135 1,230 1,325 1,430 1,525 1,620 1,715 13,750

Gross Margin 3,750 4,870 6,140 7,260 8,360 9,415 10,470 11,525 12,620 13,675 14,730 15,785 118,600

Total Salary and Wages 9,582 9,582 9,582 9,582 9,582 9,582 9,582 9,582 9,582 9,582 9,582 9,582 114,982

Fixed Business ExpensesAdvertising 200 200 200 200 200 200 200 200 200 200 200 200 2,400 Car and Truck Expenses - - - - - - - - - - - - - Commissions and Fees 50 50 50 50 50 50 50 50 50 50 50 50 600 Contract Labor 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 14,400 Equipment Leasing 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 42,000 Customer Discounts and Refunds 100 100 100 100 100 100 100 100 100 100 100 100 1,200 Dues and Subscriptions 50 50 50 50 50 50 50 50 50 50 50 50 600 Entertainment 110 110 110 110 110 110 110 110 110 110 110 110 1,320 Insurance (Liability and Property) 100 100 100 100 100 100 100 100 100 100 100 100 1,200 Internet 120 120 120 120 120 120 120 120 120 120 120 120 1,440 Legal and Professional Fees - - - - - - - - - - - - - Office Expenses 100 100 100 100 100 100 100 100 100 100 100 100 1,200 Postage and Delivery 50 50 50 50 50 50 50 50 50 50 50 50 600 Rent (on business property) - - - - - - - - - - - - - Rent of Vehicles and Equipment - - - - - - - - - - - - - Repairs and Maintenance 160 160 160 160 160 160 160 160 160 160 160 160 1,920 Supplies 400 400 400 400 400 400 400 400 400 400 400 400 4,800 Telephone and Communications 80 80 80 80 80 80 80 80 80 80 80 80 960 Travel 200 200 200 200 200 200 200 200 200 200 200 200 2,400 Utilities 500 500 500 500 500 500 500 500 500 500 500 500 6,000

Total Fixed Business Expenses 6,920 6,920 6,920 6,920 6,920 6,920 6,920 6,920 6,920 6,920 6,920 6,920 83,040

Total Other Expenses 801 838 872 902 930 954 975 993 1,008 1,020 1,029 1,035 11,357

Net Income (13,553) (12,470) (11,234) (10,144) (9,072) (8,041) (7,007) (5,970) (4,890) (3,847) (2,801) (1,752) (90,779)

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UAMS Health and Wellness CenterProjected Cash Flow Statement - Year One


Beginning Cash Balance 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000

Cash InflowsIncome from Sales 4,200 5,450 6,925 8,175 9,400 10,550 11,700 12,850 14,050 15,200 16,350 17,500 132,350 Accounts Receivable - - - - - - - - - - - - -

Total Cash Inflows 4,200 5,450 6,925 8,175 9,400 10,550 11,700 12,850 14,050 15,200 16,350 17,500 132,350

Cash OutflowsInvesting Activities

New Capital Purchases - - - - - - - - - - - - - Inventory Purchases - - - - - - - - - - - - - Cost of Sales 450 580 785 915 1,040 1,135 1,230 1,325 1,430 1,525 1,620 1,715 13,750

Operating ActivitiesSalaries and Wages 9,582 9,582 9,582 9,582 9,582 9,582 9,582 9,582 9,582 9,582 9,582 9,582 114,982 Fixed Business Expenses 6,920 6,920 6,920 6,920 6,920 6,920 6,920 6,920 6,920 6,920 6,920 6,920 83,040 Taxes - - - - - - - - - - - - -

Financing Activities - Loan Payments - - - - - - - - - - - - - Line of Credit Interest - 37 71 102 129 153 174 192 207 219 228 234 1,747 Line of Credit Repayments - - - - - - - - - - - - - Dividends Paid - - - - - - - - - - - - -

Total Cash Outflows 16,952 17,119 17,358 17,519 17,671 17,790 17,906 18,019 18,139 18,246 18,350 18,451 213,519

Cash Flow (12,752) (11,669) (10,433) (9,344) (8,271) (7,240) (6,206) (5,169) (4,089) (3,046) (2,000) (951) (81,169)

Operating Cash Balance (7,752) (6,669) (5,433) (4,344) (3,271) (2,240) (1,206) (169) 911 1,954 3,000 4,049

Line of Credit Drawdowns 12,752 11,669 10,433 9,344 8,271 7,240 6,206 5,169 4,089 3,046 2,000 951 81,169

Ending Cash Balance 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000

Line of Credit Balance 12,752 24,421 34,854 44,198 52,468 59,708 65,914 71,083 75,172 78,219 80,219 81,169

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UAMS Health and Wellness CenterBalance Sheet - Year One

Base Period End of Year One

AssetsCurrent Assets

Cash 5,000 5,000 Accounts Receivable - - Inventory 1,500 1,500 Prepaid Expenses 18,000 12,000 Other Current 500 333

Total Current Assets 25,000 18,833

Fixed AssetsReal Estate - - Buildings 30,000 30,000 Leasehold Improvements 2,000 2,000 Equipment 6,000 6,000 Furniture and Fixtures 4,000 4,000 Vehicles - - Other Fixed Assets - -

Total Fixed Assets 42,000 42,000

Less: Accumulated Depreciation - 3,443

Total Assets 67,000 57,390

Liabilities and Owner's EquityLiabilities

Accounts Payable - - Notes Payable - - Mortgage Payable - - Line of Credit Balance - 81,169

Total Liabilities - 81,169

Owner's EquityCommon Stock 67,000 67,000 Retained Earnings - (90,779) Dividends Dispersed - -

Total Owner's Equity 67,000 (23,779)

Total Liabilities and Owner's Equity 67,000 57,390

Statement Balances Statement Balances

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UAMS Health and Wellness CenterProjected Income Statement - Year Two


IncomeTraditional Membership 13,800 14,400 15,000 15,600 16,200 16,800 17,400 18,000 18,600 19,200 19,800 20,400 205,200 Discounted Membership 3,375 3,450 3,525 3,600 3,675 3,750 3,825 3,900 3,975 4,050 4,125 4,200 45,450 Non-Member Class Attendees 625 640 655 670 685 700 715 730 745 760 775 790 8,490 Point of Sale Items (Averaged) 825 825 825 825 825 825 825 825 825 825 825 825 9,900

Total Income 18,625 19,315 20,005 20,695 21,385 22,075 22,765 23,455 24,145 24,835 25,525 26,215 269,040

Cost of SalesTraditional Membership 920 960 1,000 1,040 1,080 1,120 1,160 1,200 1,240 1,280 1,320 1,360 13,680 Discounted Membership 450 460 470 480 490 500 510 520 530 540 550 560 6,060 Non-Member Class Attendees 125 128 131 134 137 140 143 146 149 152 155 158 1,698 Point of Sale Items (Averaged) 330 330 330 330 330 330 330 330 330 330 330 330 3,960

Total Cost of Sales 1,825 1,878 1,931 1,984 2,037 2,090 2,143 2,196 2,249 2,302 2,355 2,408 25,398

Gross Margin 16,800 17,437 18,074 18,711 19,348 19,985 20,622 21,259 21,896 22,533 23,170 23,807 243,642


Fixed Business ExpensesAdvertising 206 206 206 206 206 206 206 206 206 206 206 206 2,472 Car and Truck Expenses - - - - - - - - - - - - - Commissions and Fees 52 52 52 52 52 52 52 52 52 52 52 52 618 Contract Labor 1,236 1,236 1,236 1,236 1,236 1,236 1,236 1,236 1,236 1,236 1,236 1,236 14,832 Equipment Leasing 3,605 3,605 3,605 3,605 3,605 3,605 3,605 3,605 3,605 3,605 3,605 3,605 43,260 Customer Discounts and Refunds 103 103 103 103 103 103 103 103 103 103 103 103 1,236 Dues and Subscriptions 52 52 52 52 52 52 52 52 52 52 52 52 618 Entertainment 113 113 113 113 113 113 113 113 113 113 113 113 1,360 Insurance (Liability and Property) 103 103 103 103 103 103 103 103 103 103 103 103 1,236 Internet 124 124 124 124 124 124 124 124 124 124 124 124 1,483 Legal and Professional Fees - - - - - - - - - - - - - Office Expenses 103 103 103 103 103 103 103 103 103 103 103 103 1,236 Postage and Delivery 52 52 52 52 52 52 52 52 52 52 52 52 618 Rent (on business property) - - - - - - - - - - - - - Rent of Vehicles and Equipment - - - - - - - - - - - - - Repairs and Maintenance 165 165 165 165 165 165 165 165 165 165 165 165 1,978 Supplies 412 412 412 412 412 412 412 412 412 412 412 412 4,944 Telephone and Communications 82 82 82 82 82 82 82 82 82 82 82 82 989 Travel 206 206 206 206 206 206 206 206 206 206 206 206 2,472 Utilities 515 515 515 515 515 515 515 515 515 515 515 515 6,180


Total Other Expenses 1,038 1,039 1,039 1,039 1,039 1,039 1,039 1,039 1,039 1,039 1,039 1,039 12,464

Net Income (1,217) (581) 56 693 1,330 1,967 2,604 3,241 3,878 4,515 5,152 5,789 27,421

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UAMS Health and Wellness CenterProjected Cash Flow Statement - Year Two






New Capital Purchases - - - - - - - - - - - - - Inventory Purchases - - - - - - - - - - - - - Cost of Sales 1,825 1,878 1,931 1,984 2,037 2,090 2,143 2,196 2,249 2,302 2,355 2,408 25,398


Financing Activities - Loan Payments - - - - - - - - - - - - - Line of Credit Interest 237 238 238 238 238 238 238 238 238 238 238 238 2,854 Line of Credit Repayments - - - - - - - - - - - - - Dividends Paid - - - - - - - - - - - - -


Cash Flow (416) 219 856 1,493 2,130 2,767 3,404 4,041 4,678 5,315 5,952 6,589 37,031

Operating Cash Balance 4,584 5,219 6,076 7,569 9,699 12,467 15,871 19,912 24,590 29,906 35,858 42,447

Line of Credit Drawdowns 416 - - - - - - - - - - - 416



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UAMS Health and Wellness CenterBalance Sheet - Year Two

End of Year One End of Year Two


Cash 5,000 42,447 Accounts Receivable - - Inventory 1,500 1,500 Prepaid Expenses 12,000 6,000 Other Current 333 167




Less: Accumulated Depreciation 3,443 6,886



Accounts Payable - - Notes Payable - - Mortgage Payable - - Line of Credit Balance 81,169 81,586

Total Liabilities 81,169 81,586

Owner's EquityCommon Stock 67,000 67,000 Retained Earnings (90,779) (63,358) Dividends Dispersed - -

Total Owner's Equity (23,779) 3,642



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UAMS Health and Wellness CenterProjected Income Statement - Year Three


IncomeTraditional Membership 21,000 21,300 21,600 21,900 22,200 22,500 22,800 23,100 23,400 23,700 24,000 24,300 271,800 Discounted Membership 4,275 4,350 4,425 4,500 4,575 4,650 4,725 4,800 4,875 4,950 5,025 5,100 56,250 Non-Member Class Attendees 800 810 820 830 840 850 860 870 880 890 900 910 10,260 Point of Sale Items (Averaged) 900 900 900 900 900 900 900 900 900 900 900 900 10,800

Total Income 26,975 27,360 27,745 28,130 28,515 28,900 29,285 29,670 30,055 30,440 30,825 31,210 349,110

Cost of SalesTraditional Membership 1,400 1,420 1,440 1,460 1,480 1,500 1,520 1,540 1,560 1,580 1,600 1,620 18,120 Discounted Membership 570 580 590 600 610 620 630 640 650 660 670 680 7,500 Non-Member Class Attendees 160 162 164 166 168 170 172 174 176 178 180 182 2,052 Point of Sale Items (Averaged) 360 360 360 360 360 360 360 360 360 360 360 360 4,320

Total Cost of Sales 2,490 2,522 2,554 2,586 2,618 2,650 2,682 2,714 2,746 2,778 2,810 2,842 31,992

Gross Margin 24,485 24,838 25,191 25,544 25,897 26,250 26,603 26,956 27,309 27,662 28,015 28,368 317,118


Fixed Business ExpensesAdvertising 212 212 212 212 212 212 212 212 212 212 212 212 2,546 Car and Truck Expenses - - - - - - - - - - - - - Commissions and Fees 53 53 53 53 53 53 53 53 53 53 53 53 637 Contract Labor 1,273 1,273 1,273 1,273 1,273 1,273 1,273 1,273 1,273 1,273 1,273 1,273 15,277 Equipment Leasing 3,713 3,713 3,713 3,713 3,713 3,713 3,713 3,713 3,713 3,713 3,713 3,713 44,558 Customer Discounts and Refunds 106 106 106 106 106 106 106 106 106 106 106 106 1,273 Dues and Subscriptions 53 53 53 53 53 53 53 53 53 53 53 53 637 Entertainment 117 117 117 117 117 117 117 117 117 117 117 117 1,400 Insurance (Liability and Property) 106 106 106 106 106 106 106 106 106 106 106 106 1,273 Internet 127 127 127 127 127 127 127 127 127 127 127 127 1,528 Legal and Professional Fees - - - - - - - - - - - - - Office Expenses 106 106 106 106 106 106 106 106 106 106 106 106 1,273 Postage and Delivery 53 53 53 53 53 53 53 53 53 53 53 53 637 Rent (on business property) - - - - - - - - - - - - - Rent of Vehicles and Equipment - - - - - - - - - - - - - Repairs and Maintenance 170 170 170 170 170 170 170 170 170 170 170 170 2,037 Supplies 424 424 424 424 424 424 424 424 424 424 424 424 5,092 Telephone and Communications 85 85 85 85 85 85 85 85 85 85 85 85 1,018 Travel 212 212 212 212 212 212 212 212 212 212 212 212 2,546 Utilities 530 530 530 530 530 530 530 530 530 530 530 530 6,365


Total Other Expenses 1,039 1,039 1,039 1,039 1,039 1,039 1,039 1,039 1,039 1,039 1,039 1,039 12,465

Net Income 5,974 6,327 6,680 7,033 7,386 7,739 8,092 8,445 8,798 9,151 9,504 9,857 94,989

Page 60 of 61

UAMS Health and Wellness CenterProjected Cash Flow Statement - Year Three






New Capital Purchases - - - - - - - - - - - - - Inventory Purchases - - - - - - - - - - - - - Cost of Sales 2,490 2,522 2,554 2,586 2,618 2,650 2,682 2,714 2,746 2,778 2,810 2,842 31,992


Financing Activities - Loan Payments - - - - - - - - - - - - - Line of Credit Interest 238 238 238 238 238 238 238 238 238 238 238 238 2,856 Line of Credit Repayments - - - - - - - - - - - - - Dividends Paid - - - - - - - - - - - - -


Cash Flow 6,775 7,128 7,481 7,834 8,187 8,540 8,893 9,246 9,599 9,952 10,305 10,658 104,599

Operating Cash Balance 49,222 56,350 63,832 71,666 79,853 88,393 97,286 106,532 116,131 126,083 136,388 147,046

Line of Credit Drawdowns - - - - - - - - - - - - -



Page 61 of 61

UAMS Health and Wellness CenterBalance Sheet - Year Three

End of Year Two End of Year Three


Cash 42,447 147,046 Accounts Receivable - - Inventory 1,500 1,500 Prepaid Expenses 6,000 - Other Current 167 0




Less: Accumulated Depreciation 6,886 10,329



Accounts Payable - - Notes Payable - - Mortgage Payable - - Line of Credit Balance 81,586 81,586

Total Liabilities 81,586 81,586

Owner's EquityCommon Stock 67,000 67,000 Retained Earnings (63,358) 31,632 Dividends Dispersed - -

Total Owner's Equity 3,642 98,632



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